What EU leaders think of OBOR

The Belt and Road (also known as One Belt One Road or OBOR) Forum for International Cooperation was held in Beijing on May 14 and 15, with wall-to-wall media coverage and glittering events illustrating the central role of the initiative for China’s trade and
foreign policies.

However, despite the supposed aim of the forum to get the input of other countries on the future shape of OBOR, there is widespread scepticism that it will remain anything but a China-led initiative to boost its trade and exports, win global infrastructure contracts, and project its political influence.

Forum guests included President Vladimir Putin of Russia, President Recep Tayyip Erdogan of Turkey, and the Prime Ministers of Italy, Spain, Poland and Hungary. Also present were Malaysian Prime Minister Najib Razak, Indonesian President Joko Widodo, and Pakistan Prime Minister Muhammad Nawaz Sharif.

There was tremendous media hype in China surrounding the Belt and Road Forum. And given that OBOR is personally associated with President Xi Jinping, the media coverage inevitably spilled over into personal support for President Xi, who is positioning himself to strengthen his authority at the National Congress of the Communist Party of China later this year.

The forum comes a time when OBOR seems to have moved well beyond its original format of an overland Silk Route to Europe, plus maritime lanes down to Southeast Asia across to Europe and the east coast of Africa. Illustrating how OBOR no longer seems to be contained by any geographic borders, Chilean President Michelle Bachelet was present.

The Belt and Road is already causing tensions in Europe, not least because China likes to do business bilaterally, instead of with the European Union (EU) as a single entity via Brussels institutions.

According to Jan Gaspers at Berlin-based Mercator Institute for China Studies (known as MERICS), the Belt and Road Forum gave China a chance to build upon President Xi Jinping’s speech at the World Economic Forum in Davos, in which he presented China as a guardian of the liberal global economic order. Just like the Davos speech, the international forum was yet another chance to brand Beijing as a political and economic antipode to Washington, as the US administration under President Donald Trump focuses inwards and retreats from economic cooperation in Eurasia and worldwide.

Gaspers also notes that the Belt and Road Forum was preceded by a Silk Road security conference (in which Spain among others took part), underlining that OBOR has a strong security dimension in addition to its obvious economic focus.

Germany has supported the work of a new internal working group of the European External Action Service, aimed at developing a European vision on Eurasian connectivity beyond mere infrastructure projects.

Germany is also a strong supporter of the EU-China Connectivity Platform, which seeks to cooperate on project planning, while also ensuring that China adheres to rules including public procurement and environmental standards.

There has recently been controversy in Hungary (an EU member), where China is planning a high-speed railway across the border into Serbia (outside of the EU). In spite of being a mega project, the Belgrade to Budapest railway was not put out to competitive tender, as required under EU rules. Hungarian Prime Minister Viktor Orban currently has a strained relationship with EU institutions, partly because of his hard-line stance on refugees, and is happy to forge closer ties with China.

OBOR projects in general suffer from a lack of transparency, and China is often accused of pursuing economically unviable projects simply in order to increase its political influence.

China is very active with OBOR projects on the periphery of the EU, such as motorways in Serbia and Montenegro. Last year Chinese company COSCO Shipping acquired a controlling stake in Piraeus Port in Greece (an EU member). The OBOR project is linking this port with a network of motorway projects in Southern Europe.

Greek Prime Minister Alexis Tsipras attended the forum in Beijing, and held high-profile talks with Premier Li Keqiang at the Great Hall of the People. The Greek economy is still in deep the trouble, and analysts suggest that any difficult decisions on Greek debt are being delayed until after the German Federal elections on September 24. There is currently strong anti-German sentiment in Greece, which is viewed as being very enthusiastic about trade and investment opportunities associated with OBOR.

British Prime Minister Theresa May was present in Beijing, illustrating the increased importance of the trade relationship with China in the wake of the Brexit vote. The UK needs to seek new opportunities as its companies face the prospect of losing preferential access to the EU internal market.

For German Chancellor Angela Merkel, attendance would have been difficult, since on Sunday an important state election was taking place in North Rhine Westphalia – one which both major parties viewed as a key indicator for the upcoming Federal election. The result was a big boost for Merkel.

Germany was represented by economic affairs minister Brigitte Zypries. Last year the previous economic affairs minister Sigmar Gabriel made a trip to China during which he openly criticized the government for unequal access for German companies in China.

In January, Frank Walter Steinmeier moved from the foreign ministry to take the largely ceremonial post of German President, and Gabriel moved over to be foreign minister. Thus Gabriel was not in Beijing. However, Zypries came with her own tough line on free trade and market access.

In France, Sunday saw the inauguration of Emmanuel Macron after his recent election win versus Marine Le Pen. France was represented in Beijing by Jean-Pierre Raffarin, chairman of the Committee on Foreign Relations, Defence and Armed Forces in the French Senate

The United States decided to send a delegation to Beijing, led by Matt Pottinger, special assistant to the president and the National Security Council's senior direct for East Asia.

But a lot of attention was inevitably focused on a country which did not attend. Instead India took the opportunity to put out a strongly worded statement attacking OBOR, saying that “connectivity projects must be pursued in a manner that respects the sovereignty and territorial integrity of all countries.” There are ongoing border disputes between India and China in the regions of Jammu and Kashmir in India and Xinjiang province in China, and disputed territory in Arunachal Pradesh.

Date

17 May 2017

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