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China and Europe: BRI and the 17+1 Initiative

ValdaiClub.com


China’s internal market reform and China-EU cooperation concerning the reform of the open economy and the global governance mechanism will remain important issues with respect to bilateral economic and trade cooperation. The Europeans may worry that the agreement between China and the US will harm their interests. However, both sides have stated that China hasn’t promised the US any exclusive advantages and everything was done according to WTO rules.

China-EU cooperation in the framework of the Belt and Road initiative (BRI) should not be understood in geopolitical terms. China has never labelled the BRI a geopolitical strategy. Chinese does not see the world from a geopolitical perspective. Our thinking patterns emphasise harmony and cooperation. Moreover, the concept of “interconnection” is also opposed to geopolitics. The BRI has helped us stop seeing things in geopolitical terms. This is because the BRI is based on the comprehensive connectivity of countries around the world and basically entails economic cooperation.

Although the BRI cannot be compared with the EU with respect to integration, significant changes have been made during the past seven years. Coordinated regulatory efforts are on the rise, and the concept of “lean, clean and green” and the golden principles of “consultation, contribution and shared benefits” have become widely accepted throughout the world and helped promote a new concept of global governance. This process has also helped spread the ideas of Europe and made them practical. The high standards of the EU do not work in some developing areas, where China helps to create conditions for their implementation so the EU can better play its role as a normative power.

First, the BRI will enhance the development of all its participants, and Europe stands to benefit most from it. Europe is the terminal of the ancient Silk Road and now a crucial partner for the BRI. In space, most of the six economic corridors of BRI converge in Europe. Projects such as a China-Europe railway will improve the mobility and interconnectedness of Eurasia, which will help Europe exert more influence in the Pacific region. As when digging a tunnel, joint efforts from both sides can ensure that construction is done sooner.

Second, it helps to promote a better regionalisation and integration of the EU. The traditional mode of globalisation is led by a triangle where America provides the drive, China is at the application end by offering a market, and Europe creates norms. However, the structure is damaged now.

Europe is in a prominent position in the industry chain, value chain and supply chain. The BRI creates new possibilities for globalisation and hence Europe will obtain new chances. 23 EU countries, including thirteen countries among the 17+1 summit members, have signed various memoranda with China to enhance cooperation, such as the Siemens-CRRC cooperation and the financial investment memorandum between the Netherlands and China. It means most EU countries have participated in the BRI, which will bring about more cooperation in different areas between them.

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The flow of capital and technology in Europe and China’s experience can be combined for work on new projects such as the Pelješac Bridge in Croatia. The funds are from EU, the technology is German, the labour force is from Croatia and construction is Chinese. We know that although China is exceptionally capable at building infrastructure, its ability to provide supervision and consultant services is relatively weak, and many rules have been set by Europe. So such cooperation is an ideal model. This is also the reason why China has signed memoranda with many financial and multilateral organisations to perfect the BRI.

On the other hand, it also helps interconnect European countries and narrow its 'inner development' gaps. For example, currently many EU products are transported east from Rotterdam and Antwerp. Now with the BRI harbour project in Greece and Italy in the south, the flow of trade can be more balanced. Projects such as the railway from Luxembourg to Zhengzhou have expanded Europe’s scope of influence.

“Four levels in one” (land, air, ocean, internet) interconnection is essentially different from what exists now. It upgrades regional integration to yield global interconnection. This systematic connection will bring about leveraging effects.
In addition, most countries involved in the BRI were the colonies of the European countries. Some of them still follow the standards of the EU and their foreign aid mostly comes from Europe. That is also the reason why China wants to work with the EU to explore third-party markets. Also, the BRI is a medium for putting the norms of Europe and the UN’s 21st century sustainable goals (SDG) into practice. It creates more opportunities for corporations to make money. With the help of the BRI, many European companies such as Siemens AG of Germany have raised funds and gone on to make profits in the developing countries.

To sum up, it is advised that Europe see the world from a dialectical perspective. The BRI doesn’t simply add to European growth, it compounds it. No party’s shares will be stolen because the whole cake is bigger. Think about the future; you will know it is wiser to embrace BRI.


Cooperation between China and the Countries of Central and Eastern Europe. The 17+1 Initiative

China, EU and the CEE countries could cooperate to facilitate balanced development in Europe. The bilateral cooperation between China and the CEECs over the past 70 years laid a solid foundation for 17+1 cooperation. Now we have entered a new age of multilateral cooperation. It means that the cooperation is not only focused on one sub-region of Europe, but also reflects trans-regional features. So, we should think beyond the regional level, to a trans-regional or even global level. The 17+1 initiative is a trans-regional cooperation, as defined by Premier Li Keqiang in the Budapest summit in 2017, because China puts an emphasis on its connectivity with Europe and regards railways, ports and FDI as the foundation for achieving balanced development and social cohesion in Europe. For example, the Hungary-Serbia railway carried more meaning than short-term economic benefit for the two countries. It is part of the land-sea express line from Piraeus, Greece across the Balkan Peninsula to the core corridor in Europe. In the future, the express line may be extended to reach more areas, approaching the three seas surrounding the CEECs.

The economic relation between China and CEECs is still underdeveloped but has a bright future.

China is one of the most important investors in Europe. Before the onset of 17+1 cooperation, Chinese investment and trade were spatially unbalanced, and concentrated in north-western Europe. Because of the weak condition of transport infrastructure, the trade between China and CEECs heavily relied on the port and railway networks of Germany, the Netherlands and France.

More importantly, China has begun to promote cooperation with Central and Eastern European countries in the field of innovation. This is an important future direction for China’s cooperation with these nations. At the 2019 Dubrovnik Summit, China and the CEECs, including the Eastern European countries, proposed building a bridge through stronger partnership, which is consistent with the direction of China-EU relations and reflects the great opportunities presented by China and CEE countries as partners with similar levels of development.

Moreover, the projects China can provide have been mapped comprehensively and can be implemented efficiently with the help of a state-owned corporation.

In a word, the 17 + 1 Initiative helps transform the area from a marginal region in Europe to a vital link in the connection between Europe and China.

We saw the 17+1 summit and China-EU summit held during Croatia’s presidency of 17+1 last year. We expect that Croatia can also play such a positive role in the negotiations. The 17+1 cooperation is sub-regional, but the BRI has helped it become more trans-regional by promoting its interconnection in land, air, ocean and Internet. Now even North Africa and the Middle East can be linked via such connections. The fruits of such interconnectedness are systematic and provide for exponential growth advantages.

The 17+1 initiative is an integral part of China-EU cooperation. China is strengthening reforms in its internal markets to free up its market power on a level playing field. China’s cooperation with Central and Eastern European countries is driven by a desire to not simply continue to use Central and Eastern European countries as a trade route, but to combine the demands of the Central and Eastern European countries for their own industrial development with China’s rich production capacity, as the high-quality capacity of CEE countries is also needed in the Chinese market. While Chinese products are close to the Central European market, the developed products of the Central and Eastern European countries can also be close to the Chinese market.

China-CEECs cooperation needs to grasp the future trend of the development of the times. Connectivity includes not only traditional transportation, energy, people, and capital, but also digital infrastructure and data flow using new technologies. There is a huge frontier for cooperation with China when it comes to the digital service industry and 5G implementation. Premier Li Keqiang believes that China and Central and Eastern European countries should build an open road, a road of innovation and a path of partnership, where innovation is the key. Croatia’s shipbuilding industry is very developed; there is a great potential for cooperation between China and Croatia in this field. Together they can determine how to combine new technologies with the existing advantages of both sides, and decide upon the direction of their future efforts.

China wants to combine this cooperation with the revitalisation of the Balkans. The cooperation will help the area develop its internet and smart city projects. The small countries there are suitable as nodes to connect China and Europe.

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