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Clingendael Institute: Silk Road Headlines

Silk Road Headlines

3 April 2019

Chinese  cargo in Port of Rotterdam - Source:Frans Berkelaar /flickr

Luxembourg has joined the Belt and Road Initiative. On 27 March 2019, Prime Minister Bettel of Luxembourg was in Beijing to witness the signing of a Memorandum of Understanding on BRI cooperation [Luxembourg Signs Accord With China on Belt and Road Initiative]. This took place only four days after Italy signed a similar document. The Italian move attracted widespread attention, was called a ‘landmark accord’ by Bloomberg, and was openly criticised by the United States. Many commentators noted that this was the first time a member of the G7 and a founding member of the European Union joined BRI. The New York Times stated that Italy joining BRI was ‘a move that signaled geopolitical shifts from West to East’ [Italy’s Deal With China Signals a Shift as U.S. Influence Recedes].

In contrast, very few international media even mentioned the agreement between Luxemburg and China. Of course Luxembourg is not a large economy, but like Italy it is one of the original six founders of the EU. Moreover, Luxembourg is the first country in Northwest Europe that has signed a formal agreement on BRI cooperation. Its government’s main motive seems to have been to strengthen its financial sector. After the BRI agreement was signed, several further Sino-Luxembourg agreements were signed. These relate to cooperation between the Luxembourg Stock Exchange and its counterparts in Shanghai and Shenzhen, and other financial institutions in China. Luxemburg’s move was not an impulsive action triggered by Italy’s example. While for many months it had been clear that the Italian government was considering joining BRI, during the same time many European governments were aware that for Luxemburg to do so was a matter of when, not if, this would happen.

That Luxembourg attracts so little attention is all the more remarkable given the country’s role during establishment of the Asian Infrastructure Investment Bank (AIIB), a Chinese initiative that has partly the same aims as the Belt and Road Initiative. Four years ago all eyes were on the United Kingdom when it became the first European country to join the AIIB. Similar to Italy’s move now, the UK’s decision was seen as a sign that Europe and the United States are moving in different geopolitical directions. Shortly after the UK had done so, Luxembourg also announced that it would join the AIIB. After that many other European countries did the same. It is believed that the surprise move of the British government was motivated by the expectation that Luxembourg’s joining of the AIIB was imminent. Nevertheless, Luxembourg managed to position itself as a significant actor in relation to the AIIB. This July will be the first time that the AIIB’s annual meeting is held in Europe. That meeting will take place in Luxembourg.

Frans-Paul van der Putten

This week's Silk Road Headlines

When the EU engages Global China, it should be Europe First [Friends of Europe]

Italy joining China’s Belt and Road Initiative highlights different approaches of Europe and the US on Asia policy [SCMP]

Italy’s Deal With China Signals a Shift as U.S. Influence Recedes [New York Times]

New Silk Road critics are 'prejudiced', China's top diplomat says [Reuters]

China’s island-building and ‘Belt and Road Initiative’ are part of same defence strategy, says US Secretary of State Mike Pompeo [SCMP]

Luxembourg Signs Accord With China on Belt and Road Initiative [Bloomberg]

China’s ‘Silk Road urbanism’ is changing cities from London to Kampala – can locals keep control? [The Conversation]

China’s growing presence in the Gulf [East Asia Forum]

EU leaders hold out olive branch to Chinese ‘rival’ by saying they want active role in Belt and Road Initiative [SCMP]

Ethiopia in talks with China to ease ‘serious debt pressure’ tied to New Silk Road rail link, envoy says [SCMP]


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