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EU infrastructure initiative to counter China’s BRI

Is “A Globally Connected Europe” the next big rival for China’s Belt and Road Initiative?

After the G7, the European Union (EU) is now also pushing ahead with plans for an alternative to China’s Belt and Road Initiative (BRI). The EU Council approved conclusions on a ‘Globally Connected Europe’, an initiative that builds upon a 2018 Europe-Asia connectivity strategy. The EU initiative aims to set the formal path for the ambitious project from 2022.

While China is not mentioned directly, German Foreign Minister Heiko Maas said, “We see China using economic and financial means to increase its political influence everywhere in the world. It is useless moaning about this; we must offer alternatives.”

At the same time Luxembourg Foreign Minister Jean Asselborn warned that the EU should not make China its enemy. He emphasised that German automobile makers have sold more cars in China annually than locally.

“The conclusions highlight the importance of connectivity for economic growth, security and resilience. Better connectivity would contribute to the diversification of value chains, reduce strategic dependencies and boost competitiveness for the EU and its partners,” the official statement by the Council reads.

Wave of global connectivity initiatives

There has been a recent push of new global infrastructure projects. In June, the G7 initiated Build Back Better World (B3W) aiming to address the infrastructure gap in developing nations – offering countries an alternative to China’s projects which the US government described as “lacking in transparency and having poor environmental and labour standards”.

In April, the US and Japan formed a partnership to promote another alternative to BRI among developing countries. The two countries will focus on the development of high-speed 5G wireless and clean energy infrastructure in the Indo-Pacific region.

The EU previously has partnered with Japan and India and wants to build upon those partnerships. “They can help promote compatibility and complementarity of connectivity actions and initiatives, in full cooperation with beneficiaries.”

Furthermore, the Council encourages discussions with the G7 over B3W.

Criticism over China’s BRI

Chinese President Xi Jinping introduced the Belt and Road Initiative in 2013. The concept of BRI is inspired by the Han Dynasty’s Silk Road 2,000 years ago. It served as China’s network of trade routes to the Mediterranean via Eurasia.

BRI is comprised of a Silk Road Economic Belt that connects the country to Southeast Asia, South Asia, Central Asia, Russia and Europe by land and a Maritime Silk Road that links China with Southeast and South Asia, the South Pacific, the Middle East and Eastern Africa, and Europe.

The US, the EU, and their allies have perceived BRI as China’s bid to accumulate more political influence globally through economic and financial means.

Also other states, including Japan and India, have also expressed concern over the BRI, suggesting that projects are not ideal for developing countries as they risk falling into a debt trap with China.

Recently, NATO member and EU aspirant Montenegro faced the risk of bankruptcy after it was unable to repay an almost $1 billion loan from China in 2014. The loan was used to fund the construction of a 41-kilometer road.