BRI and EU global gateway strategy
FEUDS of international economics have now taken a new shape of engagement in which international power politics will play an important role. It seems that in the new global chessboard everybody has its own Silk Road.
Now nearly a decade after Chinese President Xi Jiping proposed a “New Silk Road”, the EU followed Beijing’s lead with the launch of an ambitious infrastructure investment program. The “Global Gateway Strategy (GGS)”, a €300 billion infrastructure spending plan, aims to boost EU supply chains and trade across the world.
It is a European response to the Belt and Road Initiative (BRI) which grants loans for transportation and digital infrastructure projects across nearly 70 countries, which also extends so-called China’s far reaching economic sphere of influence.
Brussels hopes to make a difference in the nature of funding. EU projects that in BRI structures of funding come mainly from loans, while the European program will rely on both public and private sector investment.
The EU showcases its global gateway strategy as transparent and more favourable, especially to developing countries.
Critics of the BRI say Chinese loans are a way to create an economic dependence on Beijing among recipient countries which is absolutely untrue.
EU propaganda persists with its long media campaign against China, BRI and CPEC and has been termed it anti-development and full of debt trap for the last so many years.
Unfortunately, EU constant weak economic indicators, shrinking financial resources and rise to extreme rightist political parties have transformed the whole continent into vulnerable shores which have now been further divided, polarized and economically marginalized.
Whereas, despite COVID-19 pandemic, Chinese macro-economy has recovered and entered into the zone of economic comfort, having positive, productive and prosperous future prospects.
The new variant of coronavirus Omicron has further weakened economic recovery chances of the EU and the world alike.
On the other hand, according to latest report (December 2021) 142 countries have now been signed MOUs with China to join the BRI which shows its unstoppable economic relevancy and potential of productivity to achieve greater socio-economic prosperity, regional connectivity, eradication of poverty and generation of new jobs in the participating countries.
Despite the economic meltdown Brussels also insists on financing that is “based on values such as transparency, respect for the law and local working conditions.
Its media, researchers and think tanks have been accusing China of containing secret clauses that always give them an advantage over the borrowing country.
But critical analysis of BRI reveals that Chinese loans are always inclusive, open, transparent, streamline and straightforward.
China believes in shared prosperity and thus shuns elements of undue secrecy while dealing with the participating countries.
The EU claims its newly announced GGS as a more modern version of the BRI, with a focus on investments in future-oriented, environmentally responsible projects in the digital, health, renewable energy and other sectors.
The EU projects it’s GGS as much more 21st century than China’s BRI, which has mainly constructed roads and railroads or renovated bridges and ports.
It seems that EU GGS does not have enough financial resources, economic stimulations and even political compatibilities to match with Chinese BRI which has been evolving since its inception.
Now it has become Green BRI. During its befitting economic propositions and engagements Beijing mainly invested in infrastructure in transport products.
But in recent years, the New Silk Road has adapted to Xi Jinping’s new priorities in renewable energy or digital networks and new technologies. Moreover, the EU’s fund allocations are not as wide as China’s, with Beijing set to spend up to $1,000 billion on its BRI. It seems that Europe is coming up with its program GGS grossly late.
Chinese President Xi launched the New Silk Road in 2013 the Chinese initiative has become an ideal platform of economic transformation and greater regional connectivity with full of financial resources. Europe has yet to demonstrate that it can do the same as rapidly.
But the EU presumes that the EU’s late entry is not a serious handicap. The EU constant propaganda against the BRI has created some doubts but has not yet deteriorated its image over time due to its own unending wishful lists, unreal economic interpretations, unrealistic statistical correlations and last but not least, financial presentations mere succeeded to extend of controversies and labeling it the debt trap and other conditions attached to Chinese loans.
However, new countries’ inclusion in BRI across the globe mitigates its fake and fabricated propaganda.
In this connection, 34 BRI countries now belong to Europe & Central Asia including 18 countries of the European Union (EU).
One of the most important tests of the effectiveness of the European program GGS in countering Chinese economic influence will be in Africa, which should be one of the main beneficiaries of these investments. However, the European Commission does not mention the African market as a priority objective.
It is a bitter reality that the arrival of Chinese financing in Africa has most hurt European companies, which have often lost market share.
According to most latest data (December 2021), 42 countries in Sub-Saharan Africa and 17 in Middle East & North Africa have already joined BRI which shows its economic penetration, financial trust and political commitment towards the continent of Africa which has been badly looted, exploited and ignored by the so-called white supremacists of the EU.
Europe is not alone in wanting to overshadow China’s BRI. The US also announced its own initiative, “Build Back Better World” (B3W), at the G7 summit in June 2021.
“With the arrival of Joe Biden in the White House, there has been a new dynamic for better transatlantic cooperation to counter China. Thus real politics has overshadowed real economics in the realms of power politics.
Despite western propaganda the BRI is a new champion of globalization by the Chinese government to reconstitute the ancient Silk Road into a contemporary mode in a vast area by improving the economic integration of China with Asia, Europe and Africa.
The purpose of the BRI is to enhance regional connectivity and expand socio-economic integration particularly in those countries involved in the BRI.
Hence, the inflow of foreign exchange through international activities will lead to a monetary expansion in the regional as well as global economy and consequently will benefit all the participant countries of the BRI.
It hopes that expansion of the BRI will increase the official reserves of central banks, thereby allowing more credit loans in the market. As a consequence, the boom in financial activities will reinforce economic growth.
To conclude announcement of EU sponsored Global Gateway Strategy (GGS) and the US initiative, “Build Back Better World” (B3W) against the Chinese BRI will further divide the world into futile financial ghost race in which economic wonders as promised by the BRI may be replaced by the EU & US political witches in the days to come.
Thus Western China’s containment policy should be discarded for the larger interest of humanity, prosperity, sovereignty and last but not least, economic sustainability.