With its “Global Gateway”, the EU tries to compete with the Chinese “Belt and Road” 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 supply chains and trade across the world.

“An alternative to the Chinese currency”

China was not mentioned in the press release from the European Commission which unveiled 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 Initiative (BRI), China’s vast program of loans for transport and digital infrastructure projects in nearly 70 countries, which is also expanding China’s large economic sphere. affecting.

“This opens 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 its aid is better,” said Andrew Small, of the German Marshall Fund, in an interview with FRANCE 24.

Brussels hopes to focus on the differences between the ways of doing business in China and in Europe, starting with the nature of the funding. “On the Chinese side, the funding structures come mainly from loans, while the European program will rely on investments from the public and private sectors,” said Francesca Ghiretti, of the Berlin-based Mercator Institute for Chinese Studies, in a statement. interview with FRANCE. 24.

The EU may be in catching-up mode, but it is presenting itself with transparent and more favorable funding, especially to developing countries. Critics of the BIS say the Chinese loans are a way to create 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 caused the South Asian nation, unable to repay its loan, to cede a controlling stake and a 99-year lease on the port to a Chinese company.

Brussels also insists on funding “based on values ​​such as transparency, respect for the law and local working conditions”, noted Ghiretti. This is again 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, the Global Gateway aims to be a more modern version of the BRI, with an emphasis on investments in forward-looking and environmentally friendly projects in the digital, health and energy sectors. renewable and others. This program is much more like the 21st century than the Chinese BRI, which mainly built roads and railways or renovated bridges and ports.

Too late or just in time?

Is this enough to scare Beijing? Not necessarily. First of all, the European attempt to sell the Global Gateway as some kind of version 2.0 of the BIS ignores the fact that the Chinese program has also evolved considerably.

“At the beginning, it was true that Beijing invested mainly 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 energies or digital networks and new technologies, “said Jean-François Dufour, director of the consulting firm, DCA China -Analysis, in an interview with FRANCE 24.

Second, the EU’s coffers are not as large as China’s, with Beijing poised to spend up to $ 1 trillion on its BRI.

Finally, Europe is presenting its program “very late,” said Jonathan Holslag, an expert in international politics at the Free University of Brussels, in an EUobserver editorial published on Thursday.

Since Xi launched the New Silk Road in 2013, the Chinese initiative has become “a well-oiled machine, capable of raising funds quickly. Europe has yet to demonstrate that it can do the same so quickly.” Ghiretti noted.

But Ghiretti doesn’t think the late entry into the EU is a serious handicap. The image of the BIS has deteriorated over time due to controversies surrounding the debt trap and other conditions attached to Chinese loans.

In other words, the Global Gateway and its plan for more transparent and respectful funding may be coming at the best time for countries seeking to keep Chinese influence at bay.

At the very least, the European program may offer borrowing countries an additional card in their negotiations with China. “They can try to get better terms by threatening to choose European funding,” Small explained.

Africa, the logical target

One of the most important tests of the effectiveness of the European program to counter Chinese economic influence “will be in Africa, which is expected to 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 makes sense, since this is where the arrival of Chinese financing has harmed European companies the most, which have often lost market share”, Dufour noted.

The Global Gateway also has an advantage because, “by more or less copying the Chinese way of doing things, the European Union deprives Beijing of one of its favorite arguments in Africa: to declare that China acts differently from the former European colonial powers”, added Dufour.

Europe is not alone in wanting to overshadow the Chinese BRI. The United States also announced its own initiative, “Build Back Better World” (B3W), at the G7 summit in June. “With the arrival of Joe Biden to the White House, there has been a new momentum for better transatlantic cooperation to counter China, and these programs prove it,” Small said.

The new initiatives are interesting because they are not, as in the days of Donald Trump, “purely hostile and anti-Chinese measures. They are more positive programs which try to offer an alternative to China,” noted Small.

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,” said Dufour. In other words, with the Global Gateway, China may need to change its tone, which seeks to capitalize on anti-American sentiments around the world by suggesting that there were only two alternatives: the American model. or theirs.

This article is a translation of the original in French