A Disunited Europe? The EU’s Response To China’s One Belt, One Road Initiative

The ancient Silk Road that linked China to the rest of Eurasia and East Africa is being reborn.  For centuries, goods, technology, and ideas spread throughout the Old World, linking together once disparate civilizations.  This was most evidenced by the Venetian explorer Marco Polo’s journey to the court of the Mongol emperor Kublai Khan.  After the collapse of the Mongol Empire, European exploration of the Americas, and the gradual disuse and disintegration of the trade routes (among other factors), the Silk Road was thought to have vanished, as if it had dissolved into the desert sands of Central Asia.

But in 2013, the then newly elected Chinese President and General Secretary Xi Jinping announced the One Belt One Road Initiative in Kazakhstan.  Envisioned as a reconstruction of the old Silk Road, today it represents one of the largest trade and infrastructure projects in history.  Often compared to the post-World War II Marshall Plan, it is estimated to cost $1 trillion USD and encompass more than 60 countries.  If the estimates are to be believed, it will cover 65% of the world’s population, three-quarters of the global energy resources, and 40% of the global GDP.

As one of the key nodes of the revived Silk Road system, Europe is one of the key centers of this emerging trade bloc.  It can be said that Chinese goods pass through Central Asia and the Middle East before they reach their final destination – Europe.  The European Union’s response to this Chinese initiative has been rather mixed and contradictory. For instance, a number of EU nations have joined one of the key components of the Belt and Road Initiative (BRI), the Asian Infrastructure Investment Bank, which is perceived as a rival of the Japan and U.S.-led Asian Development Bank.  The AIIB’s EU members include such countries as Austria, Finland, Denmark, France, Germany, Ireland, Italy, the Netherlands, Poland, Spain, and the United Kingdom—thus including all of the EU’s major economies.

However, the degree to which the EU nations have invested themselves in this Chinese project has widely varied.  Among the key dividing lines between the EU nations have been China’s growing economic relations with the EU’s frontier states of Eastern and Southeastern Europe.  One of the key initiatives has been the cooperation between China and Central and Eastern European Countries, also known as China-CEEC/16 +1.  Including both EU and non-EU nations, it encompasses such countries as Albania, Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia, and the Baltic States.  These countries have met regularly at summits and one of the key projects has been the Budapest-Belgrade Railway.  Despite the wide degree of governmental support for these projects, EU leaders in Brussels and the leaders in France and Germany have displayed caution and wariness.  These leaders have expressed a mild skepticism towards the BRI; fearing, rightly or otherwise, that China is using its economic muscles to make inroads into Europe and potentially divide it.

Another major infrastructure project that may cause consternation among leaders in Brussels, Berlin, and Paris is the railway lines project linking China to Western Europe.  Chief among these are the Yiwu-Madrid and Yiwu-London railway lines, linking China’s eastern coast to key Western European capitals.  More recently, the Chinese president’s visit to Italy in late March was an extraordinary sign of growing divisions among EU nations.  Italy, under its populist, Euroskeptic government, became the first G7 nation to officially join the BRI.  As a member of the world’s leading advanced economies and the third-largest economy in the eurozone, Italy’s move has wide-sweeping ramifications for EU politics.  Just days after President Xi’s visit to Italy, his reception in Paris was less welcoming.  During this visit, President Xi not only met the French President Emmanuel Macron but also the German Chancellor Angela Merkel and the EU Commission President Jean-Claude Juncker.  Although the Chinese and French leaders signed billions of dollars’ worth of trade agreements, relations between the Chinese and Western European counterparts have been amicable.

Because the EU’s opinion has been so divided, organizing a unified voice on the BRI and other Chinese economic activities in the Continent has remained a Herculean task.  Like in other matters, the foreign policy of the European Union and its member states depends on the foreign policy of each individual member state.  While the European Union does have a Common Foreign and Security Policy, it depends on unanimity among the member states in the Council of the European Union (representing the member states’ governments).  Therefore, maintaining any sort of consensus on such major foreign policy issues as trade with the world’s major economies remains difficult.

Much of these divisions have stemmed from internal, domestic situations in EU member states and the power hierarchy that exists between the member states.  A majority of the countries that have been most receptive to Chinese investments and the BRI have been Central, Eastern, and Southern European states.

Domestically, most of these governments have typically been Euroskeptic, fiercely nationalist, and have had to deal with major economic transitions.  For those EU member states that were previously part of the Soviet bloc, there is a tendency to distrust what can be seen as diktats from a central authority, i.e. Brussels.  Having experienced the totalitarian control of the Soviet Union, these countries have been wary of an overarching, dominant authority guiding the direction of the European continent.  Thus, they feel that they can muster up the courage to pursue an independent route in international politics.  This is exemplified in their decision to join China’s investment projects.

Meanwhile, for Southern European countries (Portugal, Italy, Greece, and Spain), after the financial crisis of 2008 and the resulting Euro crisis, any sort of foreign investment has been welcome.  Given the acrimonious relationship that these countries have with European financial institutions and their wealthier Northern neighbors, any economic partnership with other global economic powers is seen to assist in the welfare of these nations.  Overall, there is a stark divide between Northern European EU member states and their Southern and Eastern neighbors.

It is clear that much work needs to be done in order to foster greater cooperation among EU member states and between the EU and China.  As two of the largest global economic powers, whatever exchanges take place between the two will have extraordinary consequences for the world’s economic future.  Thus, it is critical that Brussels and Beijing pursue “win-win” solutions that do not leave either party in a disadvantageous state.  China must be clear and resolute that its investments and acquisitions are not aimed at “buying up Europe.”  During the annual EU-China Summit (April 9th, 2019), China must elucidate what its intentions are and remain committed to transparency.  On the other hand, the EU should highlight the importance of cooperation in research and development, investment, and technology sharing.  Both ends of the BRI would greatly benefit from pooling their intellectual and financial capital, that if combined could advance the welfare of their respective regions, if not the entire world.  Both sides stand to gain from cooperation, rather than confrontation.  For a stable and prosperous Eurasia, EU-China cooperation is essential.