Reasons EU Participation is Critical – Links to General BRI Good/Bad

No BRI without European participation — China needs the EU’s money to expand and complete the project
Horia Curtin, 2017, A PIVOT TO EUROPE: CHINA’S BELT-AND-ROAD BALANCING ACT, https://ier.gov.ro/wp-content/uploads/publicatii/Final_Policy-Brief-5_Horia-Ciurtin-A-Pivot-to-Europe_web.pdf, Mr Horia Ciurtin is a legal adviser in the field of international investment law and international arbitration; Managing Editor of the EFILA Blog which appears under the auspices of the European Federation for Investment Law and Arbitration (Brussels). He is also an Expert for New Strategy Center (Bucharest), a prominent Romanian think-tank in the field of strategy and international relations. In 2017, he co-founded DAVA | Strategic Analysis, a think-tank providing indepth strategic, cultural and geo-economic analyses.
However impressive the sums might appear at a first glance, they fall short of the needed amount. The first stages of developing the Belt-and-Road require no less than $3 trillion (according to some accounts, even more). And this is a task that China – despite its constant growth and increasing economic power – cannot accomplish alone.36 It really needs co-interested parties. And that is where the European Union (with its unbearable economic force) comes into the spotlight: it is not supposed to be just a “passive” destination at the end of the road, but also a co-owner in this joint venture. Without European cash – from public and private sources – it is highly improbable that other actors could feasibly join China in funding the initiative. Russia, Iran, Turkey or Kazakhstan (or even Japan and India37) are in an entirely different economic league than what is needed for such a massive project. For a path to Europe to emerge, Europe itself is needed along the way. In reality, EU-based institutions already are the largest lenders in the region (see Figure 3 below). And Europe is highly interested in developing infrastructure and connectivity with its marginal areas…. However, as shown before, China cannot financially and logistically manage such an ambitious project on its own. And, this time, prominent regional actors such as Russia, Iran and Turkey (who are unable) or India and Japan (who are unwilling) cannot be counted upon to build the Belt and Road. The only possible – and the truly necessary – partner is the European Union. The path to Europe can open up only with Europe’s support and financial participation

France won’t join BRI now

Carolyn Bartholomew, Chairman, U.S. – China Economic and Security Review Commission, June 12, 2019, China’s Belt and Road Initiative https://www.finance.senate.gov/download/06122019-bartholomew-testimony
Interestingly, President Macron of France announced 15 business deals worth about $45 billion including 300 Airbus planes, but carefully noted France was not “joining” the BRI and, in fact, pushed back against it, noting that Silk Road cooperation must work in both directions and meet international norms.

Full funding of the BRI means the BRI reaches 50 more countries

Southerland, August 2, 2019, Dan Southerland is RFA’s founding executive editor, After Complaints, China Moves to Make Belt And Road Plan Greener, https://www.rfa.org/english/commentaries/bri-quality-08022019140044.html
In a positive development, China has pledged at the highest level to make its massive Belt and Road Initiative (BRI) friendlier to the environment. The overseas infrastructure project formerly called the One Belt, One Road program currently spans more than 70 countries. Chinese investments in the project are eventually expected to rise to a total of $1 trillion. If fully funded, the project will also reach more than 120 countries encompassing more than two-thirds of the world’s population. On July 22, The New York Times described it as “a colossal infrastructure program designed to link China with Asia, Africa, and Europe.”

China can’t fund the whole BRI on its own

Bruno Macaes, 2019, Belt and Road: A Chinese World Order, Kindle Edit, page number at the end of the card. Bruno Maçães is a Portuguese politician, political scientist, business strategist, and author. He studied at the University of Lisbon and Harvard University, where he wrote his doctoral dissertation under Harvey Mansfield. He is currently a Nonresident Senior Fellow at Hudson Institute in Washington
As the Belt and Road initiative gains speed, China is increasingly finding that it cannot provide the required financial resources all on its own. To attempt to fill these needs at home—using Chinese banks—at a time when its economy is slowing down and its banks are saddled with bad loans would expose the financial system to unmanageable risks. Therefore, it is essential for China to gain access to global financial markets to complement its domestic resources. World financial hubs such as Dubai, Singapore, Zurich or even London could play a role. Maçães, Bruno. Belt and Road (p. 160). Hurst. Kindle Edition.

China needs outside support for the BRI

Everett Rosenfeld, April 25, 2019, EU official: China needs to be more transparent about the Belt and Road to get more buy-in, https://www.cnbc.com/2019/04/25/eu-official-china-needs-to-reform-belt-and-road-for-many-to-sign-up.html
European companies, he told CNBC, are first and foremost looking for information China is reportedly seeking more outside involvement in its bid to invest in and support that infrastructure development, and Sefcovic is part of a lengthy list of global officials attending this week’s Belt and Road Forum. European companies, he told CNBC, are first and foremost looking for information.

Financial limits to the BRI limit its completion now

He Huifeng, April 15, 2018, CNBC, Is China’s belt and road infrastructure development plan about to run out of money?, https://www.cnbc.com/2018/04/15/is-chinas-belt-and-road-infrastructure-plan-running-out-of-money.html
China’s ambitious plan to recreate the old Silk Road trading routes across Eurasia and is facing a serious financing challenge, according to the country’s senior bankers and government researchers. Speaking on Thursday at a forum in Guangzhou, capital of southern China’s Guangdong province, Li Ruogu, the former president of Export-Import Bank of China, said that most of the countries along the route of the “Belt and Road Initiative”, as the plan is known, did not have the money to pay for the projects with which they were involved. Many were already heavily in debt and needed “sustainable finance” and private investment, he said, adding that the countries’ average liability and debt ratios had reached 35 and 126 per cent, respectively, far above the globally recognized warning lines of 20 and 100 per cent. “It would be a tremendous task to raise funds for the countries’ development,” Li said. More from the South China Morning Post : The five main projects of the Belt and Road Initiative Living in subdivided flats that nobody wants – the grim struggle to find a home for Hong Kong’s poorer ethnic minorities Six Chinese who survived Titanic disaster finally have their story told China’s new central bank chief Yi Gang said on Thursday that Beijing was keen to work with international organisations, commercial lenders, and financial centers like Hong Kong and London to diversify funding sources for the plan. Wang Yiming, deputy head of the Development Research Centre of China’s State Council, said at the forum that although many belt and road projects were funded by major financial institutions — including the Asian Infrastructure Investment Bank, New Development Bank, China Development Bank (CDB), the Export-Import Bank of China and the Silk Road Fund — there was still a huge funding gap of up to US$500 billion a year. The limited participation of private investors, narrow financing channels and low profitability levels were major problems, Wang said. “Countries involved in belt and road projects have low financial capabilities and high liability ratios” he said. “It is important to encourage financial innovation to raise funds to support the development of the belt and road.” He called for the creation of an international fundraising mechanism to attract private investors, and a separate system to measure the credit risks associated with each project. Li said that private investors were also often put off by the complexity of having to deal with the different tax regimes, labor laws, customs clearance procedures and currencies of belt and road host nations. To make the financing propositions more appealing, local governments should consider copying China’s model and offer preferential policies to foreign investors, he said. Liu Yong, chief economist at CDB — the nation’s main policy lender — said the bank always considered the medium to long-term risks faced by Chinese companies involved in belt and road projects. While there were “non-performing asset problems” with some schemes, they were “within our tolerance range”, he said. The credit ratings of all countries and projects “were carefully and jointly evaluated”, he said. On the issue of CEFC

Europe’s participation will determine the success of the BRI, because Europe is China’s largest trading partner and the trading routes are complementary with other countries in the BRI

Enrico Fardella, Tenured Associate Professor and Executive Director, Centre for Mediterranean Area Studies, History Department, Peking University, China. Email: enricofardella@gmail.com; Giorgio Prodi, Associate, Professor. Department of Economics and Management, Ferrara University, Italy, 2017, China and the World Economy, https://en.iwep.org.cn/papers/papers_papers/201711/W020171109393879132046.pdf, The Belt and Road Initiative Impact on Europe: An Italian Perspective
Although Europe and the Mediterranean seem like the terminal point of the BRI, they will certainly be a key factor for the success of the project. Europe is China’s largest trading partner (bilateral trade reached €515bn in 2016 [source: Eurostat EU28 data]) and this makes the investments in infrastructure along the Belt and Road, especially those in the Mediterranean, economically viable and complementary with the investments made in Asia.

EU won’t join as a bloc, but individual countries are free to join. Half of them have

Jorge Valero, April 26, 2019, https://www.euractiv.com/section/eu-china/news/european-bloc-not-considering-joining-chinas-belt-and-road-plans/, European bloc not considering joining China’s Belt and Road plans
EU officials confirmed that the bloc is not considering joining China’s Belt and Road initiative on Friday (26 April), contrary to what German Economic minister Peter Altmaier has previously said. Speaking on the sidelines of the BRI summit hosted by Chinese President Xi Jinping, Altmaier said that the European Economic Area wants to sign a memorandum of understanding with China as a bloc and not as individual states But EU officials told EURACTIV.com that “the EU position has not changed”. The bloc decided not to become a member when the massive plan was presented more than five years ago. Member states are free to join individually, as nearly half of them have already done.

BRI includes 5G to Europe, 5G key to Internet of Things (IoT)

Federico Pieraccini, April 3, 2019, Belt and Road Initiative in Full Swing in Europe, https://www.strategic-culture.org/news/2019/04/03/belt-and-road-initiative-in-full-swing-in-europe/
The Chinese BRI mega project kicked off in 2014 with the ambitious goal of integrating trade between China and Europe by sea and by land, in the process incorporating all the countries in between. The idea, as a natural consolidation of trade, is to shorten the delivery times of goods by rail and integrate sea routes. The project covers not only ports and rail lines but also the construction of technological infrastructure to achieve global interconnectivity using the 5G technology developed by the Chinese tech giant Huawei…. Italy has in recent months approached the BRI as a result of the new government consisting of the Lega Nord and Five Star Movement (M5S). The decision to sign a memorandum of understanding between Beijing and Rome underlines how the new government wants to maintain a balanced position between Washington and Beijing in certain sectors. This is exactly the approach of Germany, which has elected to continue deepening its ties with Moscow vis-a-vis hydrocarbons and Nord Stream 2 in the face of pressure from Washington. Moreover, both Germany and Italy have confirmed that they want to rely on Huawei for the implementation and management of 5G traffic, which is fundamental to a world dominated by the internet of things.

Strong European-Chinese ties undermine US hegemony in Europe

Fedeico Pieraccini, April 3, 2019, Belt and Road Initiative in Full Swing in Europe, https://www.strategic-culture.org/news/2019/04/03/belt-and-road-initiative-in-full-swing-in-europe/
It is no coincidence that for US strategists the two greatest dangers lie in the possibility of Moscow and Beijing, or Moscow and Berlin, cooperating and coordinating their efforts. The Berlin-Moscow-Beijing triangle, with the addition of Rome and Paris, represents a scenario for Washington that is unprecedented in terms of its challenge to US hegemony in Europe.

European integration into the BRI supports multilateralism and undermines US global dominance

Tyler Durden, 4-4-19, Belt-and-Road Initiative in Full-Swing in Europe, https://www.zerohedge.com/news/2019-04-03/belt-and-road-initiative-full-swing-europe
The multipolar transformation that is occurring across the Eurasian continent confirms the industrial and diplomatic cooperation between China and the European continent in spite of strong opposition from the United States. Xi Jinping’s visit to Europe confirms what many of us have been writing about over the past few months and years, namely, the reality of an ongoing global transformation of a world dominated by the United States to a pluralistic one composed of different powers collectively shaping a multipolar world.
Europe therefore finds itself in fortuitous position, balanced as it is between its old world links to the United States on the one side and the fledgling Eurasian one being ushered in by Russia and China on the other. Countries like Germany and France, but even the United Kingdom, have long implemented commercial policies that encourage integration between the countries of the Eurasian supercontinent. In 2015, the United Kingdom was among the first Western countries to join the Chinese Asian Infrastructure Investment Bank (AIIB), which finances projects of the Belt and Road Initiative (BRI). The Chinese BRI mega project kicked off in 2014 with the ambitious goal of integrating trade between China and Europe by sea and by land, in the process incorporating all the countries in between. The idea, as a natural consolidation of trade, is to shorten the delivery times of goods by rail and integrate sea routes. The project covers not only ports and rail lines but also the construction of technological infrastructure to achieve global interconnectivity using the 5G technology developed by the Chinese tech giant Huawei. Germany and France have over the years deepened their partnerships with Beijing. Paris in particular boasts historical ties with China stemming from the nuclear cooperation between China General Nuclear Power Group (CGNPC) and Électricité de France (EDF) stretching back to 1978, as well as the aerospace one between Airbus and the Chinese aviation companies that has been ongoing since 1985. Italy has in recent months approached the BRI as a result of the new government consisting of the Lega Nord and Five Star Movement (M5S). The decision to sign a memorandum of understanding between Beijing and Rome underlines how the new government wants to maintain a balanced position between Washington and Beijing in certain sectors. This is exactly the approach of Germany, which has elected to continue deepening its ties with Moscow vis-a-vis hydrocarbons and Nord Stream 2 in the face of pressure from Washington. Moreover, both Germany and Italy have confirmed that they want to rely on Huawei for the implementation and management of 5G traffic, which is fundamental to a world dominated by the internet of things. The decisions of Germany, France and Italy to continue their cooperation with Moscow and Beijing in various fields flies in the face of the narrative advanced by the American-controlled scaremongering media controlled that attempts to discourage European politicians from acting in the interests of their countries and engaging with Russia and China. What Washington continues to misunderstand is why certain European countries are so determined to embrace the opportunities offered by the East. Italy’s recent example is quite easy to understand. The Italians hope that the BRI will provide much needed stimulus to their production industry, which has been in the doldrums in recent years. The desire for Chinese capital to give a boost to the export of Italian-produced goods is the driving force behind the proposed agreement between Beijing and Rome. In addition to the obvious and natural desire for capital, there is also the idea of ensuring energy supply, as Germany is doing with the construction of the Nord Stream 2 with Russia. Despite strong US opposition, Berlin has favored its own national interest in energy diversification, avoiding giving in to pressure from Washington, which wanted Germany to rely on LNG supplied all the way from the US at an exorbitant price when compared to Russian-supplied gas. There are striking divergences between Europe’s politicians, especially if we look at the relations between Macron and Salvini in Italy, or those between May and her European colleagues. Even between Merkel and Macron there seem to be notable frictions surrounding energy independence. However, in spite of these apparent divergences, the prevailing theme in the final analysis is that of wishing to escape Washington’s suffocating dominance in favor of a greater participation in the concept of a multipolar world. No European capital – whether it be Paris, Rome, Berlin or London – intends to break the Atlantic pact with Washington. This is confirmed at every possible formal occasion. However, as Beijing becomes more and more central to questions concerning technology or the supply of liquid capital for investments or business expansion, the changes to the global order seem unstoppable. The last obstacle remains those countries still closely linked to pro-Atlantic policies, those who find in Beijing, and above all Moscow, an excellent excuse to invite Washington’s greater intrusion into the sovereign affairs of Europe. The Baltic countries and Poland seem to offer the best inroads for US policy makers to try to influence the debate on the old continent regarding ties with the East. The artificial crises created in Ukraine, Syria and Venezuela also serve as tools to divide European leaders into opposing camps, creating the conditions to scupper European cooperation with the East. It is no coincidence that for US strategists the two greatest dangers lie in the possibility of Moscow and Beijing, or Moscow and Berlin, cooperating and coordinating their efforts. The Berlin-Moscow-Beijing triangle, with the addition of Rome and Paris, represents a scenario for Washington that is unprecedented in terms of its challenge to US hegemony in Europe. Wang Yiwei, Senior Research Fellow at the Center for China and Globalization, during Xi Jinping’s historic visit to Rome expressed in concrete terms the changing global order: “With the 16+1 cooperation plan between Central and Eastern European nations and China, several countries signed memoranda of understanding with China to jointly build the BIS. So far, the governments of 16 Central and Eastern European countries have signed memoranda of understanding on BIS cooperation with China. Currently, 171 cooperation agreements have been reached with 123 countries and 29 international organizations under the BIS “

BRI avoids World Bank and IMF

Horia Curtin, 2017, A PIVOT TO EUROPE: CHINA’S BELT-AND-ROAD BALANCING ACT, https://ier.gov.ro/wp-content/uploads/publicatii/Final_Policy-Brief-5_Horia-Ciurtin-A-Pivot-to-Europe_web.pdf, Mr Horia Ciurtin is a legal adviser in the field of international investment law and international arbitration; Managing Editor of the EFILA Blog which appears under the auspices of the European Federation for Investment Law and Arbitration (Brussels). He is also an Expert for New Strategy Center (Bucharest), a prominent Romanian think-tank in the field of strategy and international relations. In 2017, he co-founded DAVA | Strategic Analysis, a think-tank providing indepth strategic, cultural and geo-economic analyses.
For attaining these objectives (and the stated grand finale of reaching Europe), China not only integrated other ancillary projects (such as the proposed China-Pakistan and Bangladesh-ChinaIndia-Myanmar Economic Corridors), but also devised several financing instruments in order to fund all the needed infrastructure. Thus, beside its already existing domestic banks and investment funds, Beijing poured an initial $100 billion in three different institutions that the Chinese state directly controls: the Silk Road Fund, the Asian Infrastructure Investment Bank and the BRICS’ New Development Bank.34 This is another type of – financial – move away from the American-dominated international system, trying to avoid the constraints of World Bank, IMF or other multilateral development instruments.35

BRI solves European trade deficit

Theodore Pelagidis, April 15, 2019, China’s Back Door to Europe, https://www.brookings.edu/blog/up-front/2019/04/15/chinas-backdoor-to-europe/
The China-EU trade balance is the first reason cited by European BRI doubters. They fear a deteriorating trade deficit that could emerge if China keeps its market substantially protected. In 2018, the EU’s trade deficit with China was 185 billion euros. The 28 countries of the EU exported 210 billion euros’ worth of goods and services to the Chinese market while imports from China totaled 395 billion euros (Figure 2).

BRI will produce European trade gains

Jianwei Xu, 9.99Beijing Normal University, 2016, China’s Belt and Road Initiative: Can Europe Expect Trade Gains?

China’s Belt and Road Initiative: Can Europe Expect Trade Gains (2016) The Belt and Road initiative, recently embarked on by China, aims to improve cross-border infrastructure in order to reduce transportation costs across a massive geographical area between China and Europe. We estimate how much trade might be created among Belt and Road countries as a consequence of the reduction in transportation costs (both railway and maritime) and find that European Union countries, especially landlocked countries, should benefit considerably. This is also true for eastern Europe and Central Asia and, to a lesser extent, southeast Asia. In contrast, if China were to seek to establish a free trade area within the Belt and Road region, EU member states would benefit less, while Asia would benefit more. Xi Jinping’s current vision for the Belt and Road, centred on improving transport infrastructure, is very good news for Europe as far as trade creation is concerned.) is a Senior Fellow at Bruegel. Jianwei Xu (jianwei.xu@bruegel.org) is a Visiting Fellow at Bruegel.

EU participating strengthens its global economic power

Horia Curtin, 2017, A PIVOT TO EUROPE: CHINA’S BELT-AND-ROAD BALANCING ACT, https://ier.gov.ro/wp-content/uploads/publicatii/Final_Policy-Brief-5_Horia-Ciurtin-A-Pivot-to-Europe_web.pdf, Mr Horia Ciurtin is a legal adviser in the field of international investment law and international arbitration; Managing Editor of the EFILA Blog which appears under the auspices of the European Federation for Investment Law and Arbitration (Brussels). He is also an Expert for New Strategy Center (Bucharest), a prominent Romanian think-tank in the field of strategy and international relations. In 2017, he co-founded DAVA | Strategic Analysis, a think-tank providing indepth strategic, cultural and geo-economic analyses.
On the other hand, the European Union seeks to refashion itself as a global economic power, but not lacking in traditional foreign affairs influence. For this purpose, it needs other players to recognize it as such and not simply demise it as a larger-than-life “special purpose vehicle” of its (influent) Member States. And the collaboration with China is very well suited in this regard. While the United States and Russia look at Europe from a more traditional – state-to-state – perspective, China is prepared to give full credit to European Union institutions. As the two parties themselves acknowledged in the EU-China 2020 Strategic Agenda for Cooperation, both of them are “important actors in a multipolar world, […] shar[ing] responsibility for promoting peace, prosperity and sustainable development for the benefit of all”.41 Thus, with the advent of the Trump administration and doubts of a renewed American trade protectionism, the European Union reached out even further to the Chinese partner. While TTIP negotiations over the Atlantic reached a stalemate, and were temporarily put on halt, the EU did not stop working with China on a comprehensive Investment Agreeent, reaching a 14th Round this summer.42

China’s westward expansion avoids conflict with the US

Horia Curtin, 2017, A PIVOT TO EUROPE: CHINA’S BELT-AND-ROAD BALANCING ACT, https://ier.gov.ro/wp-content/uploads/publicatii/Final_Policy-Brief-5_Horia-Ciurtin-A-Pivot-to-Europe_web.pdf, Mr Horia Ciurtin is a legal adviser in the field of international investment law and international arbitration; Managing Editor of the EFILA Blog which appears under the auspices of the European Federation for Investment Law and Arbitration (Brussels). He is also an Expert for New Strategy Center (Bucharest), a prominent Romanian think-tank in the field of strategy and international relations. In 2017, he co-founded DAVA | Strategic Analysis, a think-tank providing indepth strategic, cultural and geo-economic analyses.
Therefore, driven by precaution (and fear)10 over a concerted United States intervention in the Pacific and (South) East Asia, Beijing prepares for the worst. But it also hopes for the best. The economic best. Not surprisingly, following a path of minimum tensions, the Chinese “westward” strategy appears to be driven by a dual motivation, as it seeks to simultaneously: (a) lower the possibility of direct collision on its maritime flank and de-escalate frictions with the United States, (b) expand commercially and geopolitically in an area very much hegemon-free. And that is an approach fuelled both by fear and profit. In a certain sense, the path to the West is long, but faces less great-power rivalry and offers a higher financial reward at the end of the route. The European Union is – indeed – an economic giant, but, as a mainly normative power, it lacks offensive capacities and does not engage in Realpolitik. And, thus, China can prepare to deal with it on a more transactional basis, without fear of getting toestepped in a claustrophobic area. Distance is not necessarily an impediment, but also a geopolitical recipe for successful collaboration: less overlapping areas of interest, less chances for conflict

Deal means Europe can’t criticize China on human rights

Theodore Pelagidis, April 15, 2019, China’s Back Door to Europe, https://www.brookings.edu/blog/up-front/2019/04/15/chinas-backdoor-to-europe/
“One country isn’t able to condemn Chinese human rights policy because Chinese investors are involved in one of their ports,” European Commission President Jean-Claude Juncker said on Monday, adding: “It can’t work like this.” (as quoted in an April 3 Bloomberg piece). Juncker was clearly referring to Piraeus.

Joining the BRI won’t cause financial conflicts in Europe

Xinghua Liu, 2018 Liu is an Associate Professor in the Department of International Relations, Zhou Enlai School of Government, at Nankai University in China, 2018, Europe Now, Belt and Road Initiative in Europe: Reaching Beyond Asia, https://www.europenowjournal.org/2018/06/04/belt-and-road-initiative-in-europe/
The financial implications of BRI have also been noticed. Infrastructure projects like ports and railways in Europe under BRI requires investment and financing, which will create close ties between China’s central bank and European counterparts. To lower transaction cost, “offshore RMB hubs” will be established. It is argued that European countries might compete with each other to attract money from China, which will divide Europe and hamper the unification of their common position toward China, and risk inviting China’s economic penetration.[8] This sort of concern exaggerates BRI’s financial impact and underestimates the institutional cohesion and soundness of the European financial system. Besides, closer financial linkage does not necessarily mean penetration or cause division in Europe. It is common among European countries to have different preference regarding a specific outside country or agency, regardless of the tightness of financial ties.

BRI will increase European trade by 7%

Europe and China need each other to trade because of Trump’s protectionism

Joining will hurt EU relations with the US – the US opposes

Ishan Tharoor, March 25, 2019, Washington Post, https://www.washingtonpost.com/world/2019/03/25/china-lays-down-marker-europe/?utm_term=.e00bdc523ff4 China Layws Down a Marker in Europe
The main culprit here, in Beijing’s eyes, is the United States. The Trump administration has been outspoken in its criticism of China’s overseas infrastructure projects and is separately trying to convince its European allies to resist the inroads of major Chinese telecoms firm Huawei, which is on the front lines of a global tussle over the next generation of wireless technology. In a striking rebuke of its NATO ally, the White House National Security Council tweeted its dismay with Rome lending “legitimacy to China’s predatory approach.”
If the EU joins that it will provide the actual capital necessary to complete the BRI. This allows both sides to access all of the general BRI good/bad arguments.
Horia Curtin, 2017, A PIVOT TO EUROPE: CHINA’S BELT-AND-ROAD BALANCING ACT, https://ier.gov.ro/wp-content/uploads/publicatii/Final_Policy-Brief-5_Horia-Ciurtin-A-Pivot-to-Europe_web.pdf, Mr Horia Ciurtin is a legal adviser in the field of international investment law and international arbitration; Managing Editor of the EFILA Blog which appears under the auspices of the European Federation for Investment Law and Arbitration (Brussels). He is also an Expert for New Strategy Center (Bucharest), a prominent Romanian think-tank in the field of strategy and international relations. In 2017, he co-founded DAVA | Strategic Analysis, a think-tank providing indepth strategic, cultural and geo-economic analyses.
However impressive the sums might appear at a first glance, they fall short of the needed amount. The first stages of developing the Belt-and-Road require no less than $3 trillion (according to some accounts, even more). And this is a task that China – despite its constant growth and increasing economic power – cannot accomplish alone.36 It really needs co-interested parties. And that is where the European Union (with its unbearable economic force) comes into the spotlight: it is not supposed to be just a “passive” destination at the end of the road, but also a co-owner in this joint venture. Without European cash – from public and private sources – it is highly improbable that other actors could feasibly join China in funding the initiative. Russia, Iran, Turkey or Kazakhstan (or even Japan and India37) are in an entirely different economic league than what is needed for such a massive project. For a path to Europe to emerge, Europe itself is needed along the way. In reality, EU-based institutions already are the largest lenders in the region (see Figure 3 below). And Europe is highly interested in developing infrastructure and connectivity with its marginal areas…. However, as shown before, China cannot financially and logistically manage such an ambitious project on its own. And, this time, prominent regional actors such as Russia, Iran and Turkey (who are unable) or India and Japan (who are unwilling) cannot be counted upon to build the Belt and Road. The only possible – and the truly necessary – partner is the European Union. The path to Europe can open up only with Europe’s support and financial participation
Multilateral support (countries working together) is important to the success of the project.
Sebatian Goulard, March 7, 2017, France, Italy, and China’s Belt and Road Initiative, https://thediplomat.com/2017/03/france-italy-and-chinas-belt-and-road-initiative/ . Dr. Sebastien Goulard works at Cooperans, a public affairs consultancy specialised in governance and Sino-European relations. Goulard completed a Ph.D. in economic and social development studies from EHESS (Ecole des Hautes Etudes en Sciences Sociales, ‘School for Advanced Studies in the Social Sciences’), Paris.
During their visits, both Mattarella and Cazeneuve showed interest in the “One Belt, One Road” strategy developed by China. However, one can bemoan the lack of coordination between the two European neighbors. Both countries presented their own assets for the completion of the new Silk Road. Thus, Mattarella emphasized the quality and locations of the Italian ports of Genoa and Trieste to reach the core of Europe, and Cazeneuve attended the arrival in Wuhan of a freight train coming from Lyon, France. Although the Italian president and the French premier visited China at the same time, no common meetings or shared events were held. The French and Italian heads of state and government were focused on a bilateral approach of relations with China, but the success of “One Belt, One Road” largely depends on the participants’ ability to manage multilateral projects.
Having the EU join the BRI as an entity also makes it more likely that European trade rules will be followed and that appropriate trade corridors will be designed.
Jan Gaspers is Head of the European China Policy Unit at the Mercator Institute for China Studies (MERICS). Based in Berlin, MERICS is the largest European think tank concerned with analyzing contemporary China and European China policy, December 7, 2016, Jan Gaspers is Head of the European China Policy Unit at the Mercator Institute for China Studies (MERICS). Based in Berlin, MERICS is the largest European think tank concerned with analyzing contemporary China and European China policy, https://thediplomat.com/2016/12/germany-wants-europe-to-help-shape-chinas-belt-and-road-initiative/
Apart from this, BRI has neither yielded infrastructure investments nor has it featured as a visible driver of Chinese M&A and greenfield investment activities in the Federal Republic. This is quite different for countries at Europe’s periphery in the east and the south, who are eager to attract Chinese funding to upgrade their infrastructure. They deal with China directly or have joined sub-regional cooperation formats such as the 16+1 group, which brings together 16 Central and Eastern European countries and China on a regular basis to discuss investment projects and the wider political agenda. What is still lacking is an ambitious, constructive, and forward-looking European agenda on how to engage with BRI – which is why the German government has taken the approach of “multilateralizing” the issue. In Brussels, Germany advocates using the EU-China Connectivity Platform to ensure the conformity of Chinese BRI-related investments in Europe with EU rules and standards. German officials also see this platform as a tool to co-design the new European-Chinese economic corridors. Germany has also supported the work of a new internal working group of the European External Action Service aimed at developing a European vision on Eurasian connectivity beyond mere infrastructure projects. Germany supports the European Investment Bank’s efforts to provide technical support to the Asian Infrastructure Investment Bank (AIIB) and to co-fund AIIB projects related to BRI. Germany’s decision to assume a high profile in the AIIB, which was founded on China’s initiative, constitutes an important indirect attempt to actively shape China’s BRI-related activities in Eurasia.
EU action to join could also reduce the risks of China picking off individual countries and splitting the EU
European Parliament Briefing, 2016, One Belt, One Road (OBOR): China’s Regional Integration Initiative, https://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586608/EPRS_BRI%282016%29586608_EN.pdf
Until recently, China’s infrastructure investment in Europe targeted individual EU countries such as Greece and the 16+1 group rather than the EU as a block. This has led to concerns about China’s investment strategy pursuing ‘divide and rule tactics’ capitalising on the lack of a common EU strategy – as evidenced by the past lack of consultation at EU level as regards the AIIB accession of a total of 14 EU Member States and EU Member States’ propensity to privilege their bilateral ties with China. However, China’s strong interest in investing in EU connectivity initiatives and in seeking synergies between them and OBOR, as voiced at the 2015 EU-China summit, could be a turning point. With the launch of the EU-China Connectivity Platform, the EU has created a common framework for European cooperation with China on OBOR with a view to defining cooperation strategies, plans and policies and to clarifying the rules and principles governing joint projects including governance and rule of law issues. As OBOR is a ‘moving concept’, it provides the EU with an opportunity to take part in shaping the agenda jointly with China and deepen EU-China relations.