EU countries are finally getting serious about their response to China’s Belt and Road Initiative, the huge transport and infrastructure project that Beijing is using to connect Asia to European markets as well as to signal its political influence internationally.
According to draft EU Council conclusions seen by POLITICO, European governments want the Commission to spend the next nine months coming up with a list of “high impact and visible projects” to rival Beijing’s scheme. EU foreign ministers are expected to sign off on the idea on Monday.
Among the challenges for the Europeans will be coming up with a name for their plan which is as catchy as Belt and Road. It will also need a logo.
It’s all part of a big game of catch-up for Brussels. Chinese President Xi Jinping launched his answer to the ancient Silk Road some eight years ago and it now accounts for some $2.5 trillion in projects around the world, supporting Beijing’s efforts to expand its maritime and energy networks across the globe.
The Chinese strategy has attracted criticism on a number of fronts. Among other things, China has been accused of setting debt traps for partner countries including Montenegro and Sri Lanka through economically unsustainable joint projects.
Beijing, on the other hand, has insisted that Belt and Road creates “opportunities,” a line the Chinese president repeated to German Chancellor Angela Merkel and French President Emmanuel Macron in a phone call on Monday.
G7 leaders agreed last month to a democratic alternative to the Chinese initiative and the draft conclusions from the EU Council suggested the EU is not wholly convinced by China’s description of its own scheme.
“The Council notes that other key economies have developed their own approaches and tools for connectivity and underlines the need for all such initiatives and actions to apply high international standards,” the conclusions read. “The Council requests the Commission and the High Representative [Josep Borrell] to proceed swiftly with the implementation” of the proposals it is making.
Targeting Africa and Latin America
Crucially, the EU is seeking to move beyond the 2018 EU-Asia connectivity strategy and is vowing to build a “globally connected” EU which would allow the bloc to turn its attention to Africa and Latin America, key destinations for Chinese investments.
There is also a call to deploy the EU’s soft power and this where the name and logo will come in.
The Council is expected to ask the Commission, the executive branch of the EU, to develop what it called a unifying narrative for actions taken by all relevant actors. “The narrative should include a recognizable brand name and logo developed together with the member states and should be supported by a campaign for greater public visibility,” it said.
There’s no price tag for the EU’s new scheme, but the Council will call for a mix of public financing and private investment. It will ask the Commission to “present coherent and streamlined financing schemes to incentivize sustainable connectivity investments,” including EU and member-country-level financial instruments, export credits, loans and guarantees, as well as engaging the European Investment Bank and European Bank for Reconstruction and Development.
The Council’s draft document is relatively weak on ways to encourage EU companies to beef up investment in locations that politicians consider strategic, but businesses deem risky.
“The Council highlights the challenges of financing large-scale sustainable infrastructure and the importance of robust technical assistance,” the conclusions said. “It considers that predictable international norms and standards and sound regulatory frameworks are essential for a level playing field and a conducive environment for incentivising private investment.”