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Asia-Pacific

Is China's Belt and Road Initiative an attack on European unity?

media International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at a Belt and Road conference in Beijing, China April 12, 2018. Reuters

China has told the European Union not to turn "beneficial competition" into "rivalry". The remarks, by China's Foreign Minister, are a reaction to a European Commission report criticising the Chinese refusal to fully open its markets to European goods.

Brussels has always been sceptical about China’s trillion-dollar “One Belt – One Road Initiative” (BRI), and the report with the dull-sounding title “EU-China – A Strategic Outlook” carries some harsh criticism of the ways Beijing is trying to do business with Europe.

The report complains about “onerous requirements” as a precondition for EU companies gaining access to the Chinese market. The requirements include handing over the latest technological know-how to prospective Chinese counterparts in joint-venture operations.

The report also says that exports of many EU products are “subject to discriminatory, unpredictable and burdensome procedures,” causing long delays.

Uyghurs

Apart from that, the report complains about China’s general human rights situation, singling out Beijing’s treatment of the Muslim Uyghurs in the Xinjiang Autonomous Region, but also the “treatment of EU and other foreign citizens in China”. The report calls for strict respect for World Trade Organisation regulations.

The EU report comes after Italy’s Undersecretary for Economic Development, Michele Geraci, said that Rome planned to sign a memorandum of understanding to support China’s BRI – this on the eve of a visit by China’s President Xi Jinping to Italy on March 22.

Italy’s endorsement of the BRI is the first by one of the EU’s founding members, and has annoyed many officials in Brussels.

The BRI is already active in hundreds of local projects in countries like Pakistan, the Maldives and Djibouti. But criticism is growing as many countries don’t manage to fulfil debt repayments for the Chinese loans for those projects. Pakistan and Malaysia have started cancelling some of the BRI projects while other nations have been obliged to make their repayments in raw materials.

Great things

“The current Italian government takes a very unusual approach within the EU,” says Stephen Tsang, Director of the China Institute of the London-based School for Oriental and African Studies

“It is not always playing by the EU rules and standards.” Apart from that, the Italian government’s main advisor on China is “a person who worked in China and thinks China has done some great things,” says Tsang, tipping the balance in favour of a decision to support the BRI.

Apart from that, China “is very keen to engage with individual EU countries now that they actually know how the EU works,” he says, while Beijing aims especially at “individual countries within the EU which do not adhere fully to the EU rules and standards.”

In 2012, Beijing launched the 16 + 1 framework that would bring together sixteen countries in Central and Eastern Europe, to work with Beijing on the expansion of the Belt and Road Initiative.

Members include 11 EU states, including Poland, Hungary and Bulgaria, and five Balkan countries.

Authoritarianism

“The Chinese are extending their BRI in Europe,” says Tsang, “offering some of the less wealthy countries in the eastern part of the EU to build infrastructure,” for which these countries have difficulties finding EU funding.

Some critics say the Chinese initiative is designed to split the EU.

Tsang is less pessimistic. “The Chinese government doesn’t really care about what impact its actions may have in terms of consequences for the EU’s own unity and standards,” he says, adding that Beijing tends to “support authoritarianism wherever it happens to exist.”

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