To successfully answer the challenge of China’s Belt and Road Initiative with its new connectivity strategy, the EU needs to form a clearer picture of where and how the BRI is succeeding, argues Jacob Mardell.
The topic of connectivity, meaning the physical and institutional connective infrastructure of ports, roads, fiber optic cables, customs arrangements, and so on, has picked up steam over the past couple of years, largely as a belated response to China’s Belt and Road Initiative (BRI)—a campaign launched in 2013 to position China as a leading provider of global public goods.
The new Global Gateway initiative was unveiled by European Commission President Ursula von der Leyen during her State of the Union speech on September 15. The speech didn’t provide any details about the financing or institutional structure of the initiative, but von der Leyen did spell out Global Gateway’s raison d’etre.
“We are good at financing roads,” von der Leyen said, “but it does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese owned harbor. We have to get smarter when it comes to these kinds of investments.” In other words, the EU needs to start thinking more strategically about connectivity.
Seeing the BRI as a canny attempt to leverage China’s economic might for strategic ends, the EU is attempting to do something similar, to redesign its connectivity strategy to suit what von der Leyen calls a “new era of hyper-competitiveness.”
Responding to BRI’s successes and failures
Transatlantic discourse on China’s BRI tends to focus on the negatives. Critics claim that BRI projects are commercially unviable, that they’re aimed at creating dependencies, and that they fuel corruption, environmental damage, and human rights abuses.
US and European responses to the BRI employ the concept of “sustainability” in order to differentiate themselves from the Chinese version. They also contain measures to mitigate the BRI’s negative effects. For instance, the US Strategic Competition Act of 2021 authorizes $75 million per year for the task of providing infrastructure assistance and transaction advice in the Indo-Pacific.
But transatlantic and Japanese responses to the BRI are not just about damage control, they are about proactively competing with China in the business of building connective infrastructure. As well as the negative impacts—the failures of the BRI—China’s competitors clearly see something in it worth emulating.
Implicit in their responses to the BRI is an acknowledgement that it is somehow succeeding.
Strategy and branding
Reactive initiatives like Global Gateway are billed in the media as “alternatives” to the BRI, but the truth is that the BRI itself is an alternative to the development and connectivity status quo established mostly by Western countries. The EU is already an economic superpower with the largest multilateral development bank in the world (the European Investment Bank) and, according to the EU’s own data, it handed out almost as much in grants between 2013 and 2018 as China did in loans for BRI projects (€414 billion vs. €434 billion).
The new connectivity strategy is unlikely to translate into significant increases in the sums that the EU spends on connectivity. Neither will the EU qualitatively change its current approach. The “new” strategy is built on three buzzwords - “sustainable, comprehensive, and rules-based.” It is a doubling down on EU values rather than a departure. So, what’s new?
The new connectivity strategy is new in two ways: It is an attempt to internalize the logic of strategic competition when making decisions about connectivity; and it is an attempt to increase EU visibility through better branding. Hence the two intentions set out in von der Leyen’s speech, “to get smarter” about connectivity investments and to “turn Global Gateway into a trusted brand around the world.”
As a reaction to the BRI, these two goals contain a tacit admission that it has been successful in two ways worth emulation. Firstly, Beijing is seen as successfully using the BRI toward strategic ends. Secondly, the BRI brand is seen as a narrative success.
Promoting China Inc.
The assumption that the BRI is a strategic success is just that—an assumption that hasn’t been scientifically tested. Travelling the BRI for a year in 2019, I discovered few projects that were planned in Beijing. The BRI largely consists of local initiatives that were faltering until they found Chinese funding. We hear a lot about economic corridors and the BRI as grand strategy, but BRI is a decentralized campaign to help Chinese companies accrue profit and experience.
It’s a good idea for the EU to better consider the security of supply chains when planning investments, but it’s not a response to the BRI’s key challenge. If there is a strategy behind the BRI, it is first and foremost about promoting Chinese standards and making China Inc. more competitive globally.
The BRI has worked through mercantilist methods like the use of loans tied to contracts with Chinese companies. For the EU to rise to this challenge while staying true to its free-market principles will be a challenge.
However, this contradiction does not seem to hold back member states. In Ukraine for example, Chinese financed projects have come under criticism for undermining the practice of competitive bidding, but France may be a worse offender. Paris has signed a financing agreement with Ukraine that will hand a contract to French company Alstom without tender; the Chinese deals at least offer a choice between Chinese companies. In Serbia, Paris and Beijing are also working together to finance the Belgrade metro, which will be built with French and Chinese companies.
While convergence with Chinese methods may not be desirable, “Team Europe” should at least own the existing mercantilism of member states.
The EU already contributes as much or more than China toward global connectivity. A major roadblock to greater visibility is that it does much of this work through member states, and von der Leyen will need to convince the likes of French company Alstom to work under the branding of “Team Europe” rather than “Team France.” Of course, Brussels is well aware of this problem—it’s not new and it’s not limited to connectivity work.
An issue that Brussels seems less cognizant of is the fact that the BRI’s narrative success is not really attributable to Beijing’s efforts to promote it. The EU cannot simply ape BRI-like branding and expect greater visibility.
Chinese investment is popular precisely because it is an alternative. The BRI capitalizes on anti-Western narratives that find fertile ground throughout Africa and Asia. Its projects also tend to work in the interests of political elites in host countries, meaning they receive positive press in local media. In Serbia for instance, the Chinese do not need to promote the BRI—government media do a better job than Beijing ever could.
This problem has no easy solution (narratives are not easy things to control), but we should be suspicious of lazy attempts to improve visibility through shouting the same message with snappier slogans. Instead, Europeans need to work hard to find a marketable narrative while being aware of the rest of the world sees us.
Overall, though, Global Gateway is a step in the right direction. It is proof that the EU recognizes the geopolitical relevance of investments in global connectivity, and that is a start. To go the extra mile in answering the challenge of the BRI, the EU needs to start with a clear picture of where and how the BRI is succeeding.
This article originally appeared in the fall issue of IP Quarterly.