China's tech self-reliance must be balanced with 'global protection' against shared risks, says expert

Louis Pauly, a leading scholar on global risk governance and author of "Insuring States in an Uncertain World: Towards the Collaborative Government of Complex Risks," argues that China's ambitious drive for technological self-reliance must be reconciled with a vital, underlying layer of international cooperation to ensure global prosperity and stability.

In an exclusive interview with CGTN on Saturday at the Beijing Forum, Pauly addressed the implications of China's proposed 15th Five-Year Plan, which prioritizes tech sovereignty and aims to reduce reliance on foreign technology, particularly in high-end manufacturing and chip production.

Pauly stressed that while competition – whether among firms or nations – is "normal" and a driver of prosperity, the world is now in an era where "competition and cooperation have to be compatible or sustainable." He said that the modern state and modern insurance developed in tandem to provide essential protection, and the global community must now leverage the logic of insurance and reinsurance to manage today's complex, border-spanning risks.

He noted that global insurance and reinsurance markets are fundamentally built on an "insuring instinct" – a speculative impulse for risk management that can be traced back to ancient practices, including in China's maritime trade. Today, this instinct is critical for managing new and disruptive global risks such as climate change, biodiversity loss and emerging technologies like generative artificial intelligence.

To illustrate this necessary balance, Pauly offered a stark historical contrast. He argued that the pursuit of narrow self-reliance in 1931 contributed to the collapse of global capital markets and a worldwide depression. Conversely, the global financial crisis of 2008-2009 saw swift international coordination, which included crucial support from China, successfully helping to avert a total systemic failure. This contrast highlights the political necessity of a shared global safety net.

Pauly concluded by saying that for the risks of modern complexity, "protection now has to be global." He urged policymakers and scholars to look to the history of insurance and reinsurance for "pragmatic activities of the moment" that can foster mutual political collaboration on a functional, non-political basis, thereby ensuring a necessary balance between sovereign self-reliance and collective global security.