For a city like Brussels, which is used to institutional and diplomatic wrangling, a report leaked to the German daily Handelsblatt some weeks ago that focuses on China’s Belt and Road Initiative (BRI), caught many in Brussels by surprise.

 

According to the newspaper, the European Union’s 27 ambassadors to Beijing (except for Hungary) compiled a report that sharply criticises Belt and Road Initiative, arguing that the initiative “runs counter to the EU agenda for liberalising trade and pushes the balance of power in favour of subsidised Chinese companies”.

As unexpected as the leaked report’s ‘unusually biting content’ might be, this critique is not new nor should it have been surprising. China’s almost world-spanning grand initiative has a natural partner in Europe as China and Europe are located at either end of the ‘Silk Road’, and yet Europe’s reception to the initiative has gradually shifted from heartfelt endorsement to growing reticence, if not downright scepticism. European critics view much of Belt and Road Initiative as a solo Chinese show, rather than ‘a real chorus of all relevant countries’, as Chinese policymakers have repeatedly promised. According to their reasoning, these criticisms point to a number of asymmetrical outcomes in China’s favour, Beijing’s often instrumental and selective commitment to the principle of parity and inclusiveness combined with the absence of a level-playing field for European states and companies in terms of market access, tender selection, trade facilitation and investment relations. China is progressively seen less as an economic partner than a geopolitical player using its economic might to acquire undue political influence and mute diplomatic resistance to its foreign policy conduct.

Beijing is waking up to this widespread scepticism, seeing diminishing returns in promoting BRI as an exclusively ‘win-win’ strategy based on parity and mutual respect. Its official retort is that much of this argumentation is predicated upon misperceptions, yet as the leaked report shows clearly, this is no longer a public diplomacy issue, it is first and foremost a concrete foreign policy one. It is first and foremost a diplomacy one.

China under scrutiny
As the eyes of the world focus more on China, it was always expected that there would also be a greater degree of scrutiny regarding the ways Beijing chooses to implement the project, leading critics to question its motives and intentions. In this sense, China should work systematically not to dispel this criticism for its perceived lack of merit, but to address it directly. As far as Europe is concerned, the reason is simple: much of this argumentation poses real risks to the BRI’s success and longevity. Why? Because while some of its underlying assumptions might be unwarranted (and they are), some reflect real, deep-seated concerns linked to EU’s unity, prosperity and security.

As the wanted or unwanted effect of Beijing’s enlarged footprint on the ground is increasingly felt, China has to try harder to prove that, in reality, BRI is truly a two-way street and not simply a vehicle for Chinese investments abroad. What is more, it should not take lightly warnings about how initiatives attached to BRI such as the 16+1 policy (China’s aim to intensify and expand cooperation with 11 EU Member States and 5 Balkan countries) can accelerate the Union’s fragmentation. Brussels is right to an extent in arguing that such initiatives aggravate the divisions within the Union and hamper the EU’s ability to deal with China collectively, awkwardly pitting member states against each other (and Brussels) in order to secure Chinese investment. If anything, Handesblatt’s report should act as a powerful reminder as to how fine a line there is between being an expansive global actor and being (perceived as) an expansionist one, and therefore as a valuable warning as to how dangerous this increasingly popular criticism is, whether deserved or misplaced. At the very least, this danger lies in creating a climate of mistrust, which can inhibit cooperation even on matters where European and Chinese policy-makers largely agree.

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The stakes are high
Evidently, for a Europe that uses such stark terms to describe its relations to China, it too needs to do its homework. The stakes are so high that neither passive scepticism nor fading patience without any appropriate measures taken will suffice to address the issues at hand. The EU should urgently formulate a holistic policy response vis-à-vis BRI that takes into account both economic and geopolitical considerations. An exclusive focus on geopolitics is not fair to either Beijing or Brussels as it risks disregarding the tremendously beneficial nature of Chinese investment if rules are applied properly. But nor is it fair to merely emphasise the economic opportunity that BRI offers, while overlooking the (potential) geopolitical challenges.

Europe’s response should be fundamentally strategic in its design and not merely reactive in its implementation. A key component in this regard should be establishing a robust European mechanism for screening foreign investments in strategic assets, despite opposition by certain member states. This latter point is key; Europe cannot afford not to form a common strategy vis-à-vis BRI and Beijing, as only a united Union will be able to exert sufficient diplomatic weight to collectively bargain within the framework of BRI.

EU policy recalibration needed
To do this, Europe also needs to overcome much of its relative policy short-sightedness often demonstrated in the past, which has at times led to the very development of some of the divisions amongst some member states. Take Greece for example. Would Athens have sold off a majority stake in the port of Piraeus, one of the country’s (and Europe’s) most critical infrastructure assets, to Chinese state-owned company COSCO had it not been forced to embrace the strict austerity dogma for years, struggling with painful measures in terms of cuts and privatisations imposed by its debtors? Questions like this need to be part of the calculus when Europe conducts its policy recalibration.

With the 20th EU-China Summit fast approaching, it is clear that a lot of work remains to be done by both sides. For BRI, project which is highly ambitious in its goals and Herculean in its proportions, to become a true two-way street, both Europe and China should be in a position to fully leverage each other’s development opportunities. In a world under strain from increasing isolationism, unilateralism and protectionism, this is an immense task. But it is one worth trying for.’

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