Part 2
China’s Lesson: Planning Creates Overcapacity
China’s industrial strategy is the closest thing to centralized economic planning in the modern world.
And yes—it has produced enormous industrial growth.
But it has also produced something else:
chronic overcapacity.
Entire sectors—from steel to solar panels to petrochemicals—are drowning in excess production.
State planners guessed wrong about demand.
They always do.
Markets are chaotic, nonlinear systems. Predicting them from a conference room in Brussels is about as reliable as forecasting next year’s weather.
And yet Europe seems ready to try.
The likely outcome?
Every country will declare its local chemical plant “strategically essential.”
Every region will demand subsidies.
Every lobbyist will claim their molecule is critical.
Soon the EU may find itself protecting an entire industrial ecosystem that no longer makes economic sense.
A zoo.
The Hard Truth: Europe Has Too Much Basic Chemistry
Here is the uncomfortable reality most politicians refuse to say aloud.
Europe doesn’t just have an energy problem.
It has a scale problem.
The continent still hosts too many steam crackers—the gigantic industrial plants that convert hydrocarbons into basic chemicals like ethylene and propylene.
These facilities require:
massive energy inputs
cheap hydrocarbons
large integrated markets
Europe currently has none of those advantages.
The United States enjoys cheap shale gas.
The Middle East has extremely low-cost oil.
China has massive scale and state subsidies.
Europe?
High energy prices and strict environmental rules.
Which means some chemical plants will inevitably close.
Trying to keep them alive through protectionism may backfire spectacularly.
Because Europe’s real competitive advantage is specialty chemicals—high-value molecules used in pharmaceuticals, advanced materials, electronics, and precision manufacturing.
If basic chemicals become artificially expensive due to subsidies or tariffs, those high-tech sectors will suffer.
You’d end up protecting the foundation while weakening the skyscraper built on top of it.
Can Europe Actually Survive Without the World?
Let’s ask the uncomfortable question outright:
Could Europe survive without China, the United States, or global trade?
In theory?
Yes.
History proves it.
But the result would look nothing like modern Europe.
Pre-globalization societies were far less complex.
Before modern trade networks:
industrial specialization was limited
technological diffusion was slow
consumer goods were scarce
economic growth was modest
Europe could absolutely function as a semi-autarkic civilization again.
But living standards would drop dramatically.
You don’t decouple from global supply chains without consequences.
Even something as simple as a smartphone involves materials from dozens of countries:
rare earth elements from China
cobalt from Congo
lithium from South America
semiconductor fabrication equipment from the US, Netherlands, and Japan
Remove any one node and the system fractures.
The Irish Potato Lesson: Monocultures Kill Civilizations
Europe should also remember a biological disaster that reshaped its history.
The Irish Potato Famine (1845–1852).
At the time, much of Ireland depended heavily on a single crop variety.
When the pathogen Phytophthora infestans arrived, the results were catastrophic:
one million dead
another million emigrated
entire rural societies collapsed
The lesson wasn’t just agricultural.
It was systemic.
Monocultures are fragile.
Today’s global supply chains risk creating similar vulnerabilities.
When entire industries depend on a single country—China for rare earths, Taiwan for advanced chips, Russia for gas—the system becomes brittle.
Resilience doesn’t mean isolation.
It means diversification.
The Ally Everyone Forgets: Canada
If Europe truly wants strategic resilience, it should look west—not inward.
Canada remains one of the most resource-rich and politically stable allies in the world.
Energy resources include:
vast hydroelectric capacity
enormous natural gas reserves
major oil production
uranium for nuclear energy
critical minerals for batteries
Unlike many suppliers, Canada is:
politically stable
technologically advanced
culturally aligned with Europe
committed to democratic governance
In a fractured geopolitical future, partnerships with countries like Canada may matter far more than trying to recreate industrial self-sufficiency within EU borders.
Resilience Without Delusion
The real challenge Europe faces is not independence.
It is strategic interdependence.
A resilient economy:
diversifies suppliers
maintains key industrial capabilities
avoids dangerous monopolies
invests in advanced science and manufacturing
What it doesn’t do is pretend globalization can be reversed.
The global economy is a web.
Cut enough strands and the entire structure collapses—including the part you’re standing on.
So yes, Europe should strengthen its chemical industry.
Yes, it should secure strategic materials.
Yes, it should reduce dangerous dependencies.
But turning the European economy into a protected industrial zoo?
That would be the most expensive illusion Brussels has attempted yet.
And Kurt Tucholsky would probably laugh all over again.
yours truly,
Adaptation-Guide
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