EU makes multi-billion bid to challenge China
- EU will announce details of Global Gateway initiative, rivalling China’s Belt and Road plan.
- It is based on transparency and value-based approach, to create links, not dependencies.
- It is likely to highlight ideas on transport, energy, digital, and climate schemes.
The European Union (EU) is set to announce its Global Gateway initiative that is expected to rival China’s Belt and Road plan. The European Commission President Ursula von der Leyen will present the details once it is approved by the College of Commissioners on Wednesday, December 1, 2021. Insiders believe it will outline specific ideas on transport, energy, digital, and climate schemes.
Accordingly, the EU is looking to leverage billions of euros from member states, financial institutions, as well as the private sector. In her State of the Union speech in September, von der Leyen highlighted the need for investments in quality infrastructure, and connecting goods, services, and people across the world.
Notably, the 14-page document does not overtly pitch itself as rivalling China’s initiative. It emphasizes a transparent and value-based approach, focused on creating links rather than dependencies. The idea is to reach a scale of financing to help developing countries in need of capital. Though the Commission actively avoided mentioning China up until now, this initiative is widely regarded as the West’s efforts to counter Chinese influence in Africa and other parts of the world.
Andrew Small, a Senior Transatlantic Fellow at the German Marshall Fund, agreed, saying the Global Gateway would not exist without Belt and Road. He continued that this marks the EU’s first serious effort to consolidate packages and strategize on financing mechanisms, so countries considering loans from China have an alternative.
China’s initiative, which is a centrepiece of their foreign policy, seeks to develop trade links by funnelling money into new roads, railways, bridges, and ports. It has reached into Asia, Africa, the Indo-Pacific, as far as the Western Balkans. However, Belt and Road has been criticized for extending predatory loans, in what some have labelled debt-trap diplomacy. There have been counterarguments that borrowing large sums of money is not risk-free, and China met a need that others did not. Either way, China’s geopolitical and economic footprint has grown amid rising tensions with the West.
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While the Global Gateway initiative allows the EU to flex its clout and resources in the geopolitical space, there are questions about whether it will get bogged down due to internal bureaucracy. Moreover, despite shared common interests with the US and the UK, there are some doubts that this might create more competition. Notably, the USA announced its own similar initiative, "Build Back Better World", at the G7 in June. Overall, the EU’s decision to assert influence in these areas has been seen as a positive sign from some quarters. Now, it remains to be seen how successful they are.