EU to develop investment initiative to counter Chinese influence
Draft statement seeks a “geostrategic approach” to investments abroad
The western response to China’s Belt and Road Initiative has to date consisted more of buzzwords and lofty ambitions than concrete projects.
This month, EU foreign ministers will attempt to change that narrative as they push for more tangible progress via the union’s “connectivity initiative”, writes Sam Fleming in Brussels.
Draft council conclusions, seen by Europe Express, urge a “geostrategic approach to connectivity” and set the goal of identifying “high impact and visible projects and actions globally”.
They followed a pledge by Joe Biden and his G7 partners in Cornwall last month to create a “Build Back Better” infrastructure partnership that could contribute to the estimated $40tn needed by developing nations by 2035.
Beijing’s BRI has long been viewed with deep suspicion in G7 capitals. The initiative has been deployed as a strategic tool by Beijing since its launch in 2013, as dozens of countries agreed to China-backed projects such as ports, railways and bridges.
Critics have warned that the scheme ends up lumbering recipient countries with onerous debt terms, as well as with projects that sometimes have a questionable business case or boast poor building and environmental standards.
“As more and more of the negative consequences of Belt and Road become visible in countries like Montenegro, Pakistan or Sri Lanka, governments around the world are increasingly looking for a sustainable alternative,” said a senior EU diplomat. “The EU’s connectivity initiative can provide this.”
The ministerial conclusions, which are meant to be endorsed at a foreign affairs council meeting this month, call for a push by EU capitals and their development institutions, together with national multilateral development banks and the European Investment Bank and European Bank for Reconstruction and Development.
New “strategic connectivity” projects should be programmed into the current 2021-27 EU budget, ministers will conclude, to complement private investment. Public finance including loans and guarantees could also “crowd-in” private capital, ministers say, while calling for a “unifying narrative” to frame the EU’s activity in the area.
The question, of course, is how coherent and substantial the EU’s joint efforts will prove to be with powers including the US, Japan and India.
The draft council conclusions, which do not explicitly refer to China, lack specific target figures — as did last month’s G7 statement. Instead, they list the EU budget programmes that ministers want to draw upon as they seek greater action from Brussels.
None of this amounts to a fully formed “rival” to the BRI. The EU and its allies lag far behind China, and it remains open to debate whether such an aspiration is even a realistic idea.
But the draft conclusions indicate that EU member states want to put more political weight and financial muscle behind their global connectivity ambitions. The conclusions are intended to serve as a particular wake-up call to the European Commission and its diplomatic wing, urging them to shift into a much higher gear.