It came out as a sort of minor scandal – considering the ’24/7 post-truth news cycle.’ Of the 28 EU ambassadors in Beijing, 27, with the exception of Hungary’s, signed an internal report criticizing the New Silk Roads as a non-transparent threat to free trade, allegedly favoring unfair competition by Chinese conglomerates.
The report was first leaked to respected German business newspaper Handelsblatt. EU diplomats in Brussels confirmed its existence to Asia Times. Then the Chinese Foreign Ministry calmed the turbulence, saying that Brussels had explained what this was all about.
In fact, it’s all about nuances. Anyone familiar with how dysfunctional Eurocrat Brussels is knows there’s no EU common policy towards China – or Russia for that matter.
The internal report does mention how China, via the New Silk Roads, or Belt and Road Initiative (BRI), is “pursuing domestic political goals like the reduction of surplus capacity, the creation of new export markets and safeguarding access to raw materials.”
That’s a self-evident Chinese rationale inbuilt in BRI from the start – and Beijing never denied it. After all, the concept itself was first floated inside the Ministry of Commerce, way before the official announcements by President Xi Jinping in Astana and Jakarta in 2013.
Perceptions of the BRI vary across myriad latitudes. Central and Eastern Europe are mostly enthusiastic – as BRI is synonymous with badly needed infrastructure projects. So are Greece and Italy, as Asia Times reported. Northern ports such as Hamburg and Rotterdam are actually configured as BRI terminals. Spain is very much interested in the days when the Yiwu to Madrid cargo train will move to high-speed rail.
Essentially, it all boils down to companies from specific EU nations deciding their degree of integration with what Raymond Yeung, ANZ’s chief economist for greater China, describes as “the biggest economic experiment in modern history.”
Watch those Chinese engineers
The case of France is emblematic. President Emmanuel Macron – now on a massive geopolitical PR offensive to crown himself the unofficial King of Europe – actually praised the BRI when he visited China earlier this year.
But nuance, once again, applies: “After all, the ancient Silk Roads were never only Chinese,” Macron said in Xian at the Daming Palace, the residence of the Ancient Silk Road stalwart Tang dynasty for more than two centuries. “These roads”, added Macron, “cannot be those of a new hegemony, which would transform those that they cross into vassals.”
So Macron was already prepositioning himself to steer EU-China relations away and beyond the number one EU grievance; how the Chinese play the foreign trade/investment game.
Macron has been very vocal in prodding the European Commission bureaucracy to toughen anti-dumping rules against Chinese steel imports and forcing EU-wide screening of takeovers in strategic sectors, especially from China.
In parallel, virtually every EU nation – not only France – wants more access to the Chinese market. As much as Macron has touted an optimistic mantra – “Europe is back” – in terms of EU competitiveness, that barely masks the primordial European fear; the fact that it’s China that may be getting too competitive.
The BRI, for Beijing, is all about geopolitical but most of all geo-economic projection – including the promotion of new global standards and norms that may not be exactly those practiced by the EU. And that brings us to the heart of the matter, not enounced by the leaked internal report; the intersection between BRI and Made in China: 2025.
Beijing is aiming to become a global high-tech leader in less than seven years. Made in China: 2025 identified 10 sectors – including AI, robotics, aerospace, green cars and shipping and shipbuilding – as priorities.
China-Germany bilateral trade, at 187 billion euros last year, is way bigger than China-France and China-UK, at 70 billion euros each. And yes, Berlin is worried. Made in China: 2025 represents a significant “threat” to top quality German companies producing high-end manufacturing goods.
Those days may be over when China bought astonishing amounts of German machinery – plus the inevitable BMWs and Audis. The new normal points to an army of Chinese companies moving up the value-added chain at breakneck speed.
As Bauer CEO Thomas Bauer told Reuters: “(Rivalry with China) will not be a contest against copiers. It will be one against innovative engineers.”
Navigating the blue economy
The report Blue China; Navigating the Maritime Silk Road to Europe usefully expands the scope of the debate, pointing to how the development of the Maritime Silk Road may be even more crucial than overland connectivity corridors.
The report acknowledges how the Maritime Silk Road already affects the EU in terms of maritime trade and shipbuilding, and asks some questions about the increasing global presence of the PLA Navy. It recommends that the EU “should emulate China’s blue economy as an engine of growth and wealth, and encourage innovation to respond to well-funded Chinese industrial and R&D policies.”
The “blue economy” features heavily in Made in China: 2025 – especially in terms of innovation in port infrastructure and shipping. The rationale, from Beijing’s point of view, is always about maritime trade cost cutting – but that, of course, will always depend on whether oil prices will keep going up, as OPEC and Russia are keen.
As it stands, the EU bureaucracy has to be fearful, sensing the possibility of being squeezed between high-tech China and Trump’s America First. And that does not even factor in the inevitable geo-strategic clash between the BRI and the “free and open Indo-Pacific” to be managed, in theory, by the US, Japan, India and Australia; more of a glamorized South China Sea patrol than a vast project of Eurasian economic integration.
There will be an EU-China summit in July and then a German-China summit later in the year. Non-transparent sparks are bound to fly.
Syed Fazal Abbas For once I agree with you.
Can China take a humane step to save the Myanmar Rohyangas?
Very ignorant way of thinking, just send the two bomber over the South China Sea & assume you have won the war & the Pacific Ocean belongs to you ?
Fernando Martinez You missed the point completely; "White Middle Class European, is FINISHED." – this is the intention, the Coudenhove-Kalergi plan of 1933 and EU are pushing the One World Government, NWO Agenda. This is why they insist on and push Open Borders and Mass Migration. Why did you think we Brits voted ‘Leave’ and the rest of EU population are now waking up? We don’t want to be dictated to by Corporations & Bankers, which is were it’s going.
"Europe is not afraid of free trade"
Yes it is, the EU is a protectorate, a customs union of just 28 nations. Members can only ‘deal’ with these nations and those EU have; 1. FTA’s with, or, 2. allow them to. i.e. EU has no FTA with China, US, Japan, India, but allows members to trade with them under WTO rules. The EU sanctions nations, just as USA do, in order to get them to ‘bend’ to their way of thinking!
America have been doing this for decades, since 1948 to be exact. This is what the present circumstances are in ME and S America. They regime changed Brazil and currently have Venezuela under sanctions because they wont give their oil over to American Corporations. And in ME, where Iraq, Libya and Syria all stopped using their dollar.
Perry Kamath Saving jobs from whom? At present American Corporations have bought up some 80% of world wide jobs, sending American & UK jobs to their companies in slave nations. This is what Globalisation is all about, a One World Government with all jobs being in Corporate hands.
At present Corporations with jobs and Bankers with money supply, control all Central Bank ran Governments, the reason for all the conflicts, are the nations they fight have left or want to leave the dollar system.
The people can change this, fight for ‘Sovereign money’ issued by their Government, not created by Banks from fresh air, as it is at present! All nations to have their own Sovereign money, means Companies aren’t given access to cheap loans to buy their own stock, whils SME are overlooked for loans. Or, as in EU, hounded out of business with expensive red tape.
This is why Trump in USA and Corbyn in UK are being ridiculed, they both want to bring jobs back in house and both want to change banking rules. https://moneyasdebt.wordpress.com/2013/05/17/bring-back-the-bradbury-pound-interest-free-backed-by-public-credit-issued-by-treasury-rather-than-banks/
India must rid itself of 3 alien influences if it must achieve greatness.
1. Iranian Aryan influence that infused it with racist Caste System
2. Umarite Judaic Islam that prevented India’s natural development
3. European Democracy, rule of the Demos (5% moneyed males) that decimated its sustainable culture
China was lucky to have escaped all 3 nefarious influences. India must return to its pre-Aryan roots.
The European will soon be entering the "Endangered Species" category. You think they can go on the way they’ve been proceeding? What you call Europe today will soon be called Eurarabia in the future. There will be token European populations here n there but the White Middle Class European, is FINISHED.
one cannot underestimate the 10,000 year powerhouse that is INDIA,which will have to break from the western pat in the back,soon it will decide that india has to be a world economic power too,and independent of the rest,since it was brutally colonised and divided by the west..oh dear..
Daniel Berg
Happy dreaming,,
Start new wars in ME, its Prozac for "arrogant WEST"
One simple reason for fear – past sins.
Europe remembers its going to Asia in 17-19 century to trade, and then taking over, destroying Indian and Chinese industries with violence, pushing opium on China, famine and de-population in India. Europe fears retribution.
But today China rises not through the barrel of the gun, but sweat of its brow, a far bigger threat. In trade, those with knowledge, technology, and industry win out. Europe’s science has been suicidal – all those Nobel winners and Patents have not helped in the only game in town – Survival, Growth, Evolution. A below-replenishment Europe requiring refugees to run its business does need to worry.
The only thing you should worry is your sins, advised my great great grandfather Ali bin Abu Talib. The good guys win sooner or later, so Europe must fear.
Really is Eurocrat Brussels disfunctional and is there no common foreign policy towards China (or Russia or towards the US)? Does the writer uberhaupt know how the EU really works? Europe will not be squeezed nor by Trump neither by Xi.
Europe has realised that China is buying companies and their IP freely while China has a very restrictive policy towards foreign companies coming in and doing the same. It is just a matter of time before a common policy will protect vital industries. Europe is not afraid of free trade but eventually the "dysfunctional" Bureacrats of Brussels will appear as unstoppable as the semi Communist bureacrats are in developing a restrictive policy towards countries that are not open themselves.
It took the EU 15 years to come up with a policy towards the Gulf carriers it will take them a few years less to tackle China. Bureacrats everywhere work slowly but if they start working they are unstoppable.
Kevin: Buddy, it is a chellenge in the 21st century! Saving jobs and giving everybody a job is important world over , not just in USA. Aren’t you t.ge person who praised Trump and voted for him ? Trump is essentially show man who sells bumper sticker slogans to people like you. So Ben careful . This century problem needs to be analyzed very carefully!
The Western World has finally come out of its deep sleep——–BUT while the West was ignoring and laughing at the poor Communist Chinks———–CHINA was sharping its skills and working very hard———now that the dragon has left the cage———-what will the arrogant WEST do————-make nice are fall by the wayside!!!