Representing 25 percent of the global population and generating one third of the world’s GDP, China-European Union (EU) relations happen to be next in global significance only to China-US relations.
Bilateral trade has grown to such an extent that the EU is China’s biggest trade partner while China is the EU’s second largest trade partner after the United States as it has invested around $235 billion in the EU countries whilst slowing down its US investment to just $103 billion in 2015-2016.
Having had several opportunities for bilateral co-operation, it has been a viable and productive partnership. For starters, the EU countries had joined up the Asian Infrastructure Bank (AIIB) in 2015 even though the US showed reluctance.
In return, China also joined the European Bank for Reconstruction and Development (EBRD) so working together is not something new in their bilateral relations.
Consequently, it was considered likely that the EU would become part of China’s mega-project, the Belt and Road Initiative (BRI). The absence of any rivalry and a general convergence of strategic interests could have made a sustainable, long-term partnership possible, especially as the EU did not feel geopolitically threatened by China.
However, it seems that the prospect of more Chinese leverage in Europe has made the EU somewhat unsure, particularly keeping in view its growing economic presence in Central and East European countries (CEEC).
The absence of any rivalry and a general convergence of strategic interests could have made a sustainable, long-term partnership possible, especially as the EU did not feel geopolitically threatened by ChinaSabena Siddiqui
Recognizing the need for connectivity with Asia, the European Commission has gone ahead with a strategy of its own instead to create cross-border links, modernize transport and energy and improve digital infrastructure links with the continent.
Releasing the policy document, EU Foreign Affairs representative Federica Mogherini said, “Our approach is the European Union’s way to establish stronger networks and strengthen partnerships for sustainable connectivity.”
Increasing the EU’s external action budget to 123 billion euros for the years 2021-2027, it is proposed to raise further money from the private sector and implement mega-projects in Asia.
Seeking to benefit countries both in the ‘end-point’ and areas of transit, the focus is on speeding up investment and innovation while further strategy will be unveiled and put up for voting in October at the inter-governmental Asia-Europe forum meeting for 51 countries in Brussels.
Pledging to remain engaged with China, the EU made it clear in a press release that it would make sure that systems and networks would be inter-operable and the initiatives of both China and the EU would work with synchronicity. Presenting an opportunity for co-operation in line with the Belt and Road Initiative, construction of ‘the European way’ is not a direct counter to the BRI.
Instead, this new venture seems to symbolize that Europe wants to independently tackle and execute the project on its own terms and conditions. Though it may look like Europe is putting up a contender initiative to the BRI, the reality can still prove quite different.
More infrastructure plans are exactly what Asia has needed to be on par with developed countries since decades. Such new ventures highlight that planning the BRI was timely and beneficial from both the regional and global perspective.
Being the fastest growing economic region in the world today, Asia does require a yearly investment of no less than 1.3 trillion euros ($1.5 trillion) to bridge its infrastructure gap. Providing significant opportunities for European companies, this development venture makes sense as the Trans-European transport network requires 1.5 trillion euros in the years 2021-2030.
Since a while, President of the European Commission, Jean Claude Juncker’s Juncker Commission had been focusing on the field of infrastructure, recommending that a climate of entrepreneurship was the only way to bring back jobs, investment and growth to the EU.
Thus, pitching in and investing on infrastructure and trade connectivity works for both the EU and Asia. Ostensibly, plans were underway since 2016 to engage with Asia according to the EU’s Global Strategy, a ‘connected Asia’ covers political and security matters as well as trade and investment. Being a ‘rising continent’ due to its massive population, it remains the world’s biggest market for showcasing products.
In the meantime, the US is also planning to follow the Chinese example like the EU, by launching its own mega-infrastructure projects around the world. Offering developing countries alternate financing options for much-needed infrastructure, preparations are being made these days to finalize funding arrangements.
Working to resolve any barriers, the US Congress plans to pass a bill through Senate for facilitating “international development.” Having nearly wound up the Overseas Private Investment Corp., which promotes US investment abroad in 2017, this development represents a sharp U-turn in strategy.
Additionally, a new agency mainly based on the popular OPIC pattern would run several international development programs.
Summing it up, it appears that the BRI idea has been a success and various geopolitical and geo-economic factors have prompted more global powers to follow suit, in the long run it is beneficial for all as it helps to reduce the poverty and infrastructure gap in developing nations and works for the betterment of mankind.
Sabena Siddiqui is a foreign affairs journalist and geopolitical analyst with special focus on the Belt and Road Initiative, CPEC and South Asia. She tweets @sabena_siddiqi.