COSCO Shipping in Greek port
Global China Inc. Tracker.
19 min read

MERICS Global China Inc. Tracker

No. 3, September 2021

EU launches Global Gateway

The EU has settled on a moniker for its new connectivity strategy: “Global Gateway.” The strategy was unveiled by EU President Ursula von der Leyen on September 15 in her “State of the Union” speech.1

Next day, the European Commission published the EU’s Indo-Pacific Strategy, which also gave a central role to connectivity in strategic engagement.2 Neither von der Leyen’s speech nor the Indo-Pacific document provided any details about Global Gateway’s financing or institutional structure. What is clear, however, is that green and digital development are high on the agenda and EU interests in Africa will be important for both initiatives.

Von der Leyen did not shy away from mentioning China in her speech. “It does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese-owned harbor,” she said, arguing the EU should “get smarter” about its investments.

The EU perceives the Belt and Road Initiative (BRI) as an astute attempt to leverage China’s economic heft, and is now attempting to counterbalance the BRI by making better use of its own significant contributions toward global development. It is redesigning its programs to suit what von der Leyen calls a “new era of hyper-competitiveness.”3

She stressed that the EU would build “links and not dependencies,” a thinly veiled criticism of what the US calls China’s “predatory lending.” The “new” connectivity strategy does not involve any qualitative change in the EU’s approach; it doubles down on what it already presented as a characteristically “sustainable”, “comprehensive,” and “rules-based” offering, stressing human rights and social equality.

Whether the EU’s redesign will go beyond a rebranding exercise remains to be seen. However, it may struggle even to launch a successful rebrand. Collectively, the EU does much more for global development than China, but to advertise this fact it will need to coordinate between member states and convince them to brand their activities under the “Team Europe” flag.

In this edition of Global China Inc, the “Key player” section looks at COSCO Shipping Ports Limited, and considers how the EU might need to counter the BRI on home ground. On September 21, it was announced that COSCO will take a 35 percent stake in a terminal within the port of Hamburg. The stake itself might not be a direct threat to EU interests, but it is part of a trend towards Chinese firms gaining increasing control of European shipping that could be leveraged by Beijing.

The “Regional spotlight” section also has a European focus as we explore China’s engagement with EU priority partner Ukraine. Over the summer, Ukraine withdrew its signature from an international statement on China’s human rights abuses in Xinjiang and signed an agreement with Beijing on infrastructure cooperation. Given Ukraine’s ongoing war with Russia, Chinese influence in Ukraine is a second-order consideration. However, if the China policies of Ukraine and the EU diverge it may complicate future discussions, especially on human rights.