Tuesday

4th Oct 2022

EU pitches infrastructure investment plan to rival China

  • EU Comission president Ursula von der Leyen presented the plan as part of a grander Indo-Pacific strategy (Photo: European Commission)
Listen to article

European Commission president Ursula von der Leyen on Wednesday (15 September) launched Europe's "Global Gateway" strategy - an international investment plan for transport and infrastructure.

She presented the plan during her annual State of the Union speech, and as a clear response to China's Belt and Road Initiative (BRI): "We will take a values-based approach, offering transparency and good governance to our partners."

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"We want to create links and not dependencies," she added. She also proposed a ban on products using forced labour, in reference to concerns over abuses in the Chinese region of Xinjiang.

In July, EU foreign ministers called on the commission to develop a strategy to promote European values abroad and to "protect its global interests through sustainable connectivity."

This followed a series of recent infrastructure schemes by Japan and India (Asia-Africa Growth Corridor in 2017) and the US, Japan and Australia (The Blue Dot Network in 2019).

And in June, the G7 nations led by president Joe Biden, agreed on a global infrastructure initiative, dubbed Build Back Better World, which is a loose collaboration that aims to compete with the Chinese BRI.

Although Global Gateway is yet to be finalised, and nothing has been said about the budget, von der Leyen said that investments must be a mix of private and public, and must prioritise collaboration with the business sector.

'Trusted brand'

"We will connect institutions with investment banks and the business community," von der Leyen told MEPs. "We want to turn Global Gateway into a trusted brand around the world."

This business-minded approach was met by approval by Reinhard Hans Butikofer, MEP for the Greens, who has long advocated for such a scheme: "This parliament has pressed this for years, and I strongly welcome that the commission now takes ownership. I think China has stolen a march on us with their BRI, and we have to play catch up."

Echoing von der Leyen, he added that the Global Gateway should be a shared effort between government, civil society, business and international finance.

"Business is fully ready to join forces, and I believe business should help with drafting the strategy," adding that a 'Global Gateway Business Advisory Council' should be a practical next step. At the time of writing the commission could not yet answer if the business community (or civil society) has been consulted in drafting the plan.

Macro-economist Daniela Gabor, in a 2020 paper called 'The Wasington Consensus', has warned against finance becoming too dominant in infrastructure investment strategies.

"We cannot rely on private finance to lead us out of a climate crisis it has systematically contributed to. We have to disempower carbon financiers, and we do that by making the democratic state – not investors – lead the way forward," she wrote in August.

Private investors prioritise infrastructure investments that promise a rate of return - 'roads to nowhere', instead of publicly funded projects that people need.

Global Gateway will be made a priority at the next EU-Africa summit in February, von der Leyen has said. Africa is a region where China has become the dominant investor in recent years.

According to accounting firm EY (formerly Ernst & Young), China was the largest investor in Africa in terms of total capital, investing more than twice the dollar amount of France or the US, the next two biggest investors.

"We will invest with Africa to create a market for green hydrogen that connects the two shores of the Mediterranean," von der Leyen added.

A recent underwater fibre optic cable that connected Brazil with Portugal was also named as an example of the type of investments Global Gateway could engender.

Stakeholder

Renew Europe presents a new EU-China strategy

A year ago China ended democracy in Hong Kong by introducing its National Security Law. China has since ended most opposition to its authoritarian regime - putting pro-democracy politicians behind bars, ending media freedom and installing a blanket surveillance-state.

EU and US join up against China on Taiwan

The EU and its leading powers voiced strident criticism of China at a G7 meeting in London on Wednesday, even as Hungary, once again, tried to gag Europe in Brussels.

EU unveils €300bn reply China's infrastructure programme

The EU proposal does not mention China directly, but it offers to counter Beijing's almost €3 trillion Belt and Road programme - which critics say has pushed some countries to unsustainable level of indebtedness.

Column

'Balancing' China starts in WalMart and Amazon, not Pacific

No wonder, despite the diplomatic and military initiatives, most countries in the region see China as the new leader. Perhaps it is easier to adjust military strategy towards China, than to tackle the addiction of consumers and companies to China.

News in Brief

  1. Czechs warn joint-nationality citizens in Russia on mobilisation
  2. Greece to unveil proposal for capping EU gas prices
  3. Four dead, 29 missing, after dinghy found off Canary Islands
  4. Orbán: German €200bn shield is start of 'cannibalism in EU'
  5. Lithuania expels top Russian diplomat
  6. Poland insists on German WW2 reparations
  7. Russia halts gas supplies to Italy
  8. Bulgaria risks hung parliament after inconclusive vote

Stakeholders' Highlights

  1. The European Association for Storage of EnergyRegister for the Energy Storage Global Conference, held in Brussels on 11-13 Oct.
  2. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos
  3. European Committee of the RegionsThe 20th edition of EURegionsWeek is ready to take off. Save your spot in Brussels.
  4. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  5. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  6. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries

Latest News

  1. Last-minute legal changes to Bosnian election law stir controversy
  2. EU wants probe into alleged Nagorno-Karabakh war crimes
  3. EU officials were warned of risk over issuing financial warning
  4. EU debates national energy plans amid calls for more coordination
  5. What Modi and Putin’s ‘unbreakable friendship’ means for the EU
  6. EU leaders have until Friday for refugee resettlement pledges
  7. Cities and regions stand with citizens and SMEs ahead of difficult winter
  8. Editor's weekly digest: A week of leaks

Join EUobserver

Support quality EU news

Join us