Summer Reading: The Boring Tech Blind Spot
Issue 205, Monday 14th July 2025
We often hear that the U.S., and to some extent the EU, have “abandoned” their industrial base. But that claim deserves a closer look. The truth is more complicated, and the blame less clear-cut. What we call the boring tech blind spot refers to essential but overlooked technologies, the kind that get sidelined not because they are obsolete, but because they lack flash. Think of legacy chips or static converters. They may not be cutting-edge, but they are indispensable.
It’s the glamorous, high-margin tech that draws attention and investment. Cloud platforms, AI chips, weight-loss drugs breakthroughs , all these are the innovations that make headlines and promise big returns. It’s only natural that, in economies like the U.S. and the EU, there’s a constant push to move capital, talent, and policy focus toward these high-value sectors.
In the process, something quietly gets left behind: the boring stuff. These are foundational technologies that do not make headlines. Legacy chips, electrical appliances, pharma APIs, circuit boards, nitrocellulose-based propellants, you name it. None of them glamorous, all of them essential.
Over time, they slip from view. That is, until a crisis hits. A pandemic, a geopolitical shock, a trade dispute and suddenly a broken supply chain reminds everyone that the boring tech was never boring at all. It is crucial. When that happens, voters get upset and demand to know why no one saw it coming.
But here is the dilemma: in open-market economies, elected leaders do not and cannot tell companies what to produce. Governments can nudge and incentivize, but they do not issue five-year production plans with hopes of infinite capacity as China does. Even if they could, they would be working against strong market forces. The structural pressure to innovate and move up the value chain is not a policy error; it is the logic of free economies.
Mario Draghi isn’t one for alarmism, but his message is clear: the EU needs to wake up. He’s worried the bloc is too exposed, too dependent on other countries, especially China. And it’s not just about trade imbalances; it’s about strategic vulnerability. Draghi also sees the EU being squeezed between two giants. The U.S. is shifting toward one-on-one deals instead of a rules-based trading system, while China is flooding global markets with state-backed exports.
Unlike liberal economies, China sets industrial goals and often aims to manufacture everything, from the glamorous to the mundane, often using practices that dominate the playing field. This adds another layer of complexity for Western economies trying to find the right balance between efficiency and resilience, market logic and strategic security.
So no, the boring tech blind spot isn’t just about neglect. It’s the result of competing forces, economic incentives, political constraints, and global dynamics, all pulling in different directions. Fixing it isn’t as simple as reshoring or reindustrializing on command.
It requires rethinking what we value and how we build resilience in a world where China’s political strategy is a paradox: chasing the top while racing to the bottom. It dominates high-end sectors while flooding global markets with low-margin, heavily subsidized components. This paradox - and the overcapacity it fuels, has left China stuck in a self-made labyrinth, where losses pile up across sectors: from real estate to photovoltaic panels, from electric cars to batteries. Yet the Party leadership refuses to take responsibility, blaming everyone else: other countries, local governments in China, and the Chinese companies themselves.
Handling these complexities takes more than regretting past decisions. It demands a clearer understanding of what strategic capacity means in open societies - and the will to defend it.
China’s Export Machine Lowers the Price per Kilo to Six-Year Low
Top Sources of China’s Trade Deficit
Top Sources of China’s Trade Surplus
BRICS Trade Delivers $10 Billion Surplus to China — Every Month
Malawi: That's just China being China
Under Xi’s leadership, China’s trade surplus with Malawi has made up nearly 90% of their total bilateral trade. To put it in perspective: that surplus alone equals about 20% of Malawi’s GDP.
No doubt, a Chinese spokesperson eager to show goodwill would point out that imports from Malawi are growing at a “healthy” 12% in 2025. What they’ll avoid mentioning is that exports to Malawi are rising by 91%, brutally widening the trade gap. In reality, the only significant thing China sources from Malawi is tobacco. But the same spokesperson will assure you that’s about to change.
Don’t get too excited. It’s about to change, just the way it always does. China being China. Malawi has just clinched $12 billion in mining contracts with China’s state-owned Sunwalk. The minerals? You guessed it, rare earths, graphite, titanium, uranium, and more.
China Pays 24% Less for Russian Oil Than Its Average Crude Import Price
In 2025, China has paid an average of $54 per barrel for Russian crude oil, well below the $71 per barrel average for all its crude imports so far this year.
Russia now supplies more than one-fifth of China’s crude oil imports. Saudi Arabia and Iran each account for 13%, while Iraq supplies 11%. The drop in Iraq’s share reflects a shift toward Iranian crude. In fact, Iran, largely via transshipments through Malaysia, became China’s second-largest oil supplier in 2025, delivering 1.5 million barrels per day, more than either Saudi Arabia or Iraq.
China’s CPI Plunges: -0.1% in H1 2025, Far Below 2% Target
What was once a rare occurrence is becoming the new normal in China: real GDP for the first half of 2025 is expected to exceed nominal GDP.
China’s Coal Output Per Capita Increased Nearly 50% Over a Decade
Chinese Outbound Tourism Levels Off in Spring; Eyes on Summer Season
While Q4 2024 and Q1 2025 saw a strong rebound in Chinese outbound tourism, reaching levels last seen at its 2015 peak, the spring quarter brought only modest growth. All eyes now turn to the summer season.
Tourism to China Back at 10-Year High, Says SAFE Data
SAFE data used as a proxy suggests that inbound tourism to China has merely returned to the levels seen at its peak ten years ago.
Germany’s Trade Slump with China Reflects Broader EU Disengagement
Ahead of a gloomy EU-China summit on July 24th, Germany’s May export data offers a telling gauge of what to expect for the EU as a whole. Exports to China fell by another 9% in May, bringing the total decline for the first five months of 2025 to 14%.
VDL Tells China the EU Is Open But Not Naïve
At the European Parliament, President von der Leyen addressed members during the debate on EU-China relations. She reaffirmed that de-risking should not be mistaken for decoupling and emphasized that Europe’s dissatisfaction is rooted in serious issues. She left no doubt, these China-related concerns are of extreme importance to the EU:
Limited market access in China
Massive trade imbalance
State-subsidised overcapacity
Economic coercion
Cybersecurity threats and influence operations
China’s continued support for Russia
China ignored the EU’s clear warnings before. It’s doubtful it will listen now.
China’s response was harsh, as expected. It accused the EU of duplicity while praising its own good business manners. With the EU and China sticking to their positions, not much is expected from the July 24 summit. The meeting has already been watered down. Xi skipped Brussels and isn’t expected to show up in Beijing either. Unless something changes, things will likely get worse before they get better.
EU Trade Diversion Monitor: May Edition
Since April this year, the EU has been monitoring imports monthly to detect harmful trade diversion into the Single Market. By May, it had identified 85 cases, each traced down to the 8-digit HS code level.
The scope of identified products ranges from simple consumer goods, like edible oils and golf clubs, to technically complex items such as propellant powders and steel rods.
A product is flagged as a “hit” only when all these factors come together at once: there’s a noticeable shift in import patterns in 2025 compared to 2023, import volumes rise by at least 5%, average prices drop by at least 5%, the average weekly import value tops €100,000, and the product is produced within the EU.
As an example, in the first four months of 2025, the EU imported approximately 38 million liters of edible oil from Belarus at a CIF price of €0.85 per liter (roughly $1 per liter). This marked the first time the EU had ever imported this category of product from Belarus.
From Rule-Maker to Deal-Maker
For decades, the U.S. led efforts to build a rules-based trading system: multilateral, predictable, and anchored in a broad understanding of reciprocity. That didn’t always mean symmetry, but it did mean give-and-take within a shared framework. We were fans of that cooperative ethos.
Today, the language remains, but the process looks quite different. Tariffs come first, talks follow under pressure, and the outcome is often a set of managed trade commitments.
These arrangements are still called “deals,” but the underlying logic has shifted. The focus is now less on shaping the system and more on leveraging access. This marks a notable departure from the approach the U.S. once promoted.
To be fair, the shift did not happen in a vacuum. China’s mercantilist and often irresponsible trade practices, combined with its reluctance to support meaningful reform, have played a major role in eroding the multilateral order it claims to defend.
In that sense, the current breakdown is not just a reaction to U.S. policy but also a consequence of long-standing tensions and imbalances, many of them driven by China’s mercantilist behavior that the current system was unable to resolve.
Late Add: Trump Drops Restraint, EU Forced to Put the Gloves On
On July 12, Trump published on his social network the letter sent to the EU announcing 30% tariffs. What struck us most was not the content, but the tone. This is not the voice of a partner seeking cooperation from a longstanding ally. It is the tone of someone dictating terms. Frivolities like this do lasting damage: they erode the trust of EU citizens, a fragile and precious thing that is hard to rebuild once lost.
Well, he and his advisors must think they know what they’re doing, but they certainly lack finesse.
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