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11th May 2022

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West and allies relaunch push for own version of China’s Belt and Road

A new undersea fibre optic data cable spanning the ocean between southern Europe and Latin America is due to come online this month — and the timing could hardly be more apposite.

The €150m EllaLink project is backed by public lenders including the European Investment Bank. It will go live just as the EU and its allies renew a push for co-operation on international infrastructure projects to counter China’s Belt and Road Initiative, under which Beijing has extended its influence across the globe.

The aim is to boost collaboration between the EU and its partners — including Japan, the US and India — and support high-quality projects in low and middle-income countries. The theme is expected to loom large on the agenda at EU and G7 summits in May and June. The EU and its partners will attempt to give the drive the heft it has so far lacked, with Biden asking for it to be added the agenda at a G7 summit in the UK this summer.

“So far we are trying to counter Belt and Road mostly with buzzwords and lofty policy papers,” said one senior EU diplomat. “But unfortunately there is no real geopolitical strategy or plan which is consistent and coherent. There’s a real need to work together on infrastructure projects and avoid countries becoming over-reliant on China.”

Lindsay Gorman, a fellow at the Alliance for Securing Democracy, an advocacy group, said the effort could succeed as long as it was more focused and imaginative than simply trying to “counter every road China builds”. Instead the EU and its allies should focus on critical sectors such as digital to curb China’s authoritarian reach into regions including Africa, central Asia and Latin America, as well as Europe.

It’s not just about infrastructure but . . . a chance to set standards. [Whoever] writes the rules rules the world

“It’s less the physical roads than digital highways that are fuelling repressive systems,” she said, adding: “It’s really going to be about throwing significant capital behind it — and identifying those strategic areas where we can do the most good.”

The BRI has become a strategic tool for Beijing since its launch in 2013, as dozens of countries signed up to China-backed projects such as railways, bridges and ports. It has been endorsed by more than 150 states and international organisations — including more than half the EU’s 27 nations. Beijing has expanded the idea with initiatives including the Digital Silk Road, Polar Silk Road and Green Silk Road. 

One response from international powers is an infrastructure alliance expected to be agreed between the EU and India this month. There was also “clearly an opening” for Europe to work more closely with the US under the Biden administration, said Jonathan Hillman of the Center for Strategic and International Studies think-tank.

Workers on site at a Colombo mall under construction by China Harbour Engineering Co. Analysts are unclear how the US and EU could dissuade countries from signing up to Chinese-backed projects © Atul Loke/Bloomberg

The latest push for an alternative to the BRI comes after previous efforts yielded few concrete results. While the EU launched a connectivity plan in 2018 and signed a partnership with Japan in 2019, neither has produced flagship projects in third countries. The US has little to show for the Build Act, passed in 2018 to boost private sector investment in poorer countries, and the Blue Dot Network initiative to certify infrastructure standards, launched with Japan and Australia the following year.

Critics say the EU and its partners are too late. Beijing has run the BRI for more than seven years and prioritised international infrastructure long before that, particularly in Africa. 

Supporters of a stronger western drive counter that a growing backlash against Chinese projects offers a second chance as some recipient countries complain that BRI debt terms are onerous and building and environmental standards deficient.

But obstacles remain, including internal divisions among potential partners. While most EU member states, including France and Germany, are broadly in favour of widening the bloc’s partnerships, some officials argue initiatives should not just be about constructing new “hardware” to rival the BRI but creating partnerships based on shared standards and norms.

“We now understand that it’s not just about infrastructure but . . . a chance to set standards,” said one EU diplomat. “[Whoever] writes the rules rules the world.” 

Meanwhile, international powers have differing positions on China, with some wary of jeopardising economic ties or inflaming security tensions in Asia. While the US has been vocal in calling for international co-operation to take on Beijing, others such as the EU and India are reluctant to join an explicit anti-China alliance.

Other potential problems include funding. Public institutions such as the Luxembourg-based European Investment Bank could provide some finance, but much would have to come from the private sector, officials say.

Analysts are also unclear how the US and EU could persuade countries not to sign up to Chinese-backed projects that are unsupported by western nations, Hillman said: “If there is a domestic interest in doing them and a source of finance that China is willing to provide, how do you prevent bad projects from happening? It seems almost impossible.” 

All this means there is unlikely to be a single global infrastructure initiative as an alternative to the BRI. A patchwork of separate but co-ordinated bilateral and multilateral initiatives is more likely, officials say. 

Reinhard Bütikofer, chair of the European parliament’s delegation for relations with China, said the latest push appeared more serious than previous iterations.

“The Chinese made inroads because they had something to offer that we did not,” said Bütikofer, one of a number of EU officials put under sanctions by Beijing in March in retaliation for measures imposed by the bloc on Chinese officials.

“We have learned a lesson from that. There is a great opportunity for us to be better partners to some of these countries than the Chinese are prepared to be”.

2021-05-02 04:00:25

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