The EU’s announced intention to ban Huawei 5G technology is symptomatic of the winds of change blowing through Europe, and its bad news for China. Beijing is no longer welcomed with open arms as it used to be. Indeed, countries like Italy have taken concrete steps to ban the Chinese company from bidding in Rome’s planned 5G roll-out, prompting instant threats of retaliation in trade and upending joint research projects.

But rather than complaining and threatening its international trading partners—the EU is Beijing’s biggest—Chinese policy-makers may want to take a step back and try to understand why it is met with increasing dissatisfaction.

Europe’s pullback follows hot on the heels of Washington’s own moves to curb the influence of the Middle Kingdom and its firms, even urging Europeans to “link arms” against the far eastern threat. But tech is not the only sector where skepticism on both sides of the Atlantic about China has been growing. The country’s heavy industries and its overcapacities in steel and aluminum have been criticized by both Washington and Brussels for years, leading the U.S. to impose sanctions on Chinese steel and aluminum imports in March last year.

For the U.S. and the EU, Beijing’s use of market distorting policies to prop up its domestic industries has been a painful thorn on the side, as has been the lip service of Chinese officials to ending the resultant excessive capacities. For steel, organizations like Greenpeace criticized in 2017 that China’s capacity cuts look impressive on paper, but belie the fact that 36.5 million tons were added in 2016 alone. Beijing stepped up its efforts in late 2017, which resulted in a mild reduction in steel production. However, the same cannot be said for aluminum.

China is the largest aluminum producer in the world and the glut is not likely to end any time soon. In 2016, China’s leaders vowed to curb the massive aluminum overproduction flooding global markets and threatening jobs in the U.S. and Europe. Yet, Chinese producers have instead worked towards expanding their capacities, helped by the billions they receive in the form of subsidies and state aid. This cost advantage has spurned resentment and has resulted in growing anti-Chinese attitudes in many quarters. So egregious is the situation that a coalition of international aluminum trade groups called for a global forum in the run up to the Hamburg G20 Summit in 2017, compelling Beijing to make good on its word to stop the metal surplus.

Two years later, not much has been done on Beijing’s part. Instead, Chinese exports of value added aluminum products (semi-fabricated) surged to new heights in 2018, as did total exports of primary aluminum and alloys, which jumped by 21 percent compared to 2017. The impact on the European and American aluminum industries has been severe. The rising production and exports are keeping global aluminum prices dangerously low—so low in fact, that 30 to 40 percent of smelters worldwide are booking losses. Last year, it was announced that two smelters in Spain will be closed due to their inability to compete with cheaper Chinese products.

The reason behind the continued failure of the Chinese government to get its aluminum sector under control relates to the Communist Party’s fear of domestic instability and the need to provide for economic growth. Unfortunately, in 2018 Chinese domestic demand for the metal faced a slowdown and domestic smelters have sought to offload their excess product overseas. As it happened, the American sanctions on Russian aluminum producer Rusal presented a golden opportunity to do so at a time when European buyers shied away from the company, and Chinese producers gladly rushed in to pick up the slack.

This was good for Beijing, because it provided policy-planners with an excuse to be lenient about production. But it also highlights the inherent contradictions in China’s “supply-side structural reform (SSSR)” drive that supposedly underpins the attempts to curb overcapacities. On one hand, China has earnestly sought to shut down uneconomical and outdated factories, though mostly in the private rather than in the SOE sector, which is at the core of the overcapacity problem. On the other hand, that capacity-scuttling campaign was offset immediately by another large stimulus package to patch up the economic damages wrought by the trade war with the U.S., thereby significantly undermining the campaign’s impact. Hence, the shutdowns were not deep enough to halt the decline in global material prices. Experts now anticipate that China will actually increase its production capacity in 2019 by 3 million tons.

In the past, China was able to get away with not heeding its own promises due to its role as an indispensable trading partner for many countries. However, now that the economy is slowing down and China’s economic policy is leaving tangible negative impacts on the economies of its partners, the tide is slowly turning against Beijing. U.S. President Trump’s anti-China stance is well known. What is remarkable, however, is that European countries are beginning to de-emphasize the Middle Kingdom as a priority as well.

Germany is the most notable country to rethink its approach with China. In an unprecedented move, the country’s largest industry association, the Federation of German Industries (BDI), published a policy paper in January that more explicitly than ever before singled out the Chinese state-controlled economic system as a threat to Germany’s—and Europe’s—global competitiveness. Mentioning state-subsidized overcapacity, forced technology transfers, and lack of reciprocity, the BDI demands that Brussels and Berlin set up a modern, coherent long-term industrial policy to support the continent’s indigenous industrial base, or risk critically diminished competitiveness.  

Between blocking Huawei and changing political focus across the EU—reflected in German Chancellor Merkel’s highly symbolic visit to Japan—it does seem like Europe is about to end its “naivety” regarding China. Such dramatic rethinking does not bode well for Beijing, where President Xi would be well advised to carefully consider the meaning of these changing tides, learn the lessons, and adapt its industrial policies. Otherwise, though China is an undisputable global power, it risks being a highly unpopular one.

But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?

Let’s start with gold.

Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.

In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.

It turns out, common agreement is a philosophy for building shared economy.

And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.

It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.

We’ve already agreed, as a global community, to ensure inclusive and equitable access to quality education. We’ve already agreed to empower all women and girls, to ensure pure and clean water access for all, to promote health at all stages of life, and to end hunger.

We’ve already agreed.

Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.

Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.

In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.

Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.

This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.

But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently.  Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.

Is education more valuable than gold? What about healthcare or nutrition or clean water?

We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.

What if education was a new gold standard?

And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?

Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.

By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?

Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.

Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.

These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.

“Let us raise a standard to which the wise and the honest can repair.”  —George Washington
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.