With its ‘Global Gateway’, the EU tries to compete with the China Belt and Road Initiative
The EU unveiled its “Global Gateway” project this week, which is seen as a European alternative to the China Belt and Road Initiative (BRI). But is the EU’s € 300 billion plan a serious threat to Beijing’s influence extension initiative?
Everyone wants their own Silk Road. Almost a decade after Chinese President Xi Jinping proposed a “New Silk Road,” the EU followed Beijing’s lead this week with the launch of an ambitious infrastructure investment program.
The “Global Gateway”, a € 300 billion infrastructure spending plan, aims to boost EU trade and supply chains around the world.
‘An alternative to Chinese money’
China was not mentioned in the European Commission press release that revealed details of the new initiative on Wednesday. But it’s hard not to see the Global Gateway as a European response to the Belt and Road Initiave (BRI), China’s vast loan program for transport and digital infrastructure projects in nearly 70 countries, which also extends the economic sphere of wide reach. from China. influence.
“This marks the beginning of a more competitive era in development aid. Recipient countries will now have an alternative to Chinese money. It is up to the EU to prove that their aid is better,” said Andrew Small of the German Marshall Fund in a interview with FRANCE 24.
Brussels hopes to focus on the differences between the Chinese and European ways of doing business, starting with the nature of financing. “On the Chinese side, the funding structures come mainly from loans, while the European program will depend on investment from the public and private sectors,” Francesca Ghiretti, from the Berlin-based Mercator Institute for China Studies, said in an interview. with FRANCE. 24.
The EU may be in a way to catch up, but it comes to the table with funding that is transparent and more favorable, especially for developing countries. Critics of the BRI say that Chinese loans are a way to create an economic dependence on Beijing among recipient countries.
Sri Lanka’s experience with the port of Hambantota is often cited as an example of China’s controversial “debt trap”, which pushed the South Asian nation, when it was unable to repay its loan, to hand over a stake. majority shareholder and a 99-year lease at the port to a Chinese firm.
Brussels also insists on funding “based on values such as transparency, respect for the law and local working conditions,” Ghiretti said. Again, this is a thinly veiled attack on “Made in China” loans, which are “accused of containing secret clauses that always give them an advantage over the borrowing country,” Small explained.
Finally, Global Gateway aims to be a more modern version of BRI, with a focus on investments in future-oriented and environmentally responsible projects in the digital, healthcare, renewable energy and other sectors. This program looks much more 21st-century than China’s BRI, which has built primarily roads and railways or renovated bridges and ports.
Too late or just in time?
Is this enough to scare Beijing? Not necessarily. First, the European attempt to sell Global Gateway as a kind of version 2.0 of BRI ignores the fact that the Chinese program has also evolved significantly.
“At first, it was true that Beijing mainly invested in infrastructure in transport products or to bring hydrocarbons to China. But in recent years, the New Silk Road has adapted to Xi Jinping’s new priorities in renewable energy or networks. digital and new technologies “. “Jean-François Dufour, director of consulting firm DCA China-Analysis, said in an interview with FRANCE 24.
Second, the EU’s coffers are not as broad as China’s, and Beijing will spend up to $ 1 billion on its BRI.
Finally, Europe is presenting its program “very late,” Jonathan Holslag, an international policy expert at the Free University of Brussels, said in an EUobserver op-ed published on Thursday.
Since Xi launched the New Silk Road in 2013, the Chinese initiative has become “a well-oiled machine, capable of mobilizing funds quickly. Europe has yet to show that it can do the same quickly,” Ghiretti said.
But Ghiretti doesn’t think late EU entry is a serious handicap. BRI’s image has deteriorated over time due to controversies surrounding the debt trap and other conditions associated with Chinese loans.
In other words, Global Gateway and its plan for more transparent and respectful funding may be arriving at the best time for countries looking to keep Chinese influence at bay.
At a minimum, the European program can offer borrowing countries an additional card during their negotiations with China. They can try to get better terms by threatening to choose European funding, ”Small explained.
Africa, the logical goal
One of the most important tests of the effectiveness of the European program to counter Chinese economic influence “will be in Africa, which should be one of the main beneficiaries of these investments,” Ghiretti said.
The European Commission does not mention the African market as a priority objective, “but it is logical, since it is there where the arrival of Chinese financing has harmed European companies the most, which on many occasions have lost market share,” says Dufour .
The Global Gateway also has an advantage because, “by more or less copying the Chinese way of doing things, the European Union is depriving Beijing of one of its favorite arguments in Africa: declaring that China acts differently from the old powers. European colonial “. Dufour added.
Europe is not alone in wanting to overshadow China’s BRI. The United States also announced its own initiative, “Rebuild a Better World” (B3W), at the G7 summit in June. “With the arrival of Joe Biden to the White House, there has been a new dynamic for better transatlantic cooperation to counter China, and these programs show it,” Small said.
The new initiatives are interesting because they are not, as in the Donald Trump era, “purely hostile and anti-China measures. They are more positive programs that try to offer an alternative to China,” Small noted.
Above all, it is important that Europe has its own agenda. “It is essential in terms of communication because this time, Beijing cannot say that the EU is only following Washington,” Dufour said. In other words, with Global Gateway, China runs the risk of having to change its tune, which seeks to capitalize on anti-American sentiments around the world by suggesting that there were only two alternatives: the American model or its own.
This article is a translation of the original in French.