If you see the geopolitical struggle for influence as a game of seduction, these are the flirting techniques that Europe wants to use: beckoning with democratic values, human rights, transparency and environmental protection. And don’t forget: billions in investments.
On Wednesday, President of the European Commission Ursula von der Leyen presented the long-awaited Global Gateway initiative, through which the European Union aims to support infrastructure projects around the world. And although the country is not mentioned anywhere, everything is clear: this must become the European answer to China’s so-called Belt and Road Initiative (BRI).
Under that heading, Beijing has financed numerous infrastructure projects outside of China over the past decade. In dozens of countries, including European ones, railways, highways, bridges, ports or airports were built with Chinese money. The official aim is to better connect China with the rest of the world, but with its ‘new silk road’ Beijing is mainly increasing its geopolitical sphere of influence. The financing is subject to conditions that make participating, often poor, countries highly dependent.
Also read: Suspicion everywhere, but how great is the Chinese power really?
This has been a problem for quite some time, not only in Brussels but also in Washington. This summer, at the urging of US President Joe Biden, the seven major industrialized nations (G7) agreed to pull out the wallet in response to the BRI itself to help countries in developing regions with infrastructure and climate projects.
The European strategy followed this week, including clarity about how much money Brussels wants to allocate for it: a maximum of 300 billion euros until 2027. The EU wants to use this to finance projects worldwide over the next six years, such as the construction of fiber optic networks, solar parks or high-voltage lines. Everything, according to von der Leyen, ‘with respect for the highest social and environmental standards, in line with the democratic values of the EU’. And all under ‘fair and favorable terms’. After all, the aim is ‘to forge connections, not dependencies’.
With that, the EU is now cautiously intervening in the geopolitical battle for influence through strategic investments, years after China took the lead. It is a clear sign of the rapidly deteriorating relationship between Brussels and Beijing, less than a year after they agreed an ambitious investment deal. The arrival of Biden, concerns about human rights violations and a different political wind in Germany, among others, cooled relations.
But there are already doubts about how effective the new investment offensive will be. The 300 billion does not come close to the more than a trillion euros that China is putting into the BRI until 2027, according to financial analysts. And then the Commission makes creative use of the calculator: the bulk of the money must be raised by private investors, made possible by guarantees from European funds. Ultimately, only about EUR 20 billion flows from the EU budget to the Global Gateway.
Critical view of Brussels
The question is also whether countries are waiting for European investments to which all kinds of requirements regarding climate and human rights are linked. Why would they trade advantageous Chinese megaloans for the critical eye of Brussels? Von der Leyen defended Europe on Wednesday as a “reliable brand”. “Many countries now have experience with Chinese investments and want a different offer,” she said. “They know that we are transparent, stand for good governance and that they are not left with an unsustainable debt.”
Is it sufficient? In an opinion piece, China expert Jonathan Holslag (Free University of Brussels) criticized the strategy Wednesday as too late and not goal-oriented. He calls the image that the EU paints of the BRI as a ‘bad deal’ outdated: “China has long ceased to be the reckless investor who can trump Europe by coming up with something smarter.”
In Brussels, there is optimism about the geopolitical step the EU is taking. “Instead of making countries an offer they cannot refuse, the EU is now going to make them an offer they do not want to refuse,” said German MEP Bernd Lange (SPD).