EU Commission: ‘The Belt and Road initiative is a Chinese project’
The Belt and Road initiative (BRI) is a Chinese project. The EU does not participate in it, but it is also not a simple spectator of it. The European Commission pays attention to the BRI in particular to ensure that it is not in contradiction with EU’s interests and values. This is in short the stance of the European Commission towards the BRI – the revived Eurasian transport network- explained by Maja Bakran Marcich, Deputy Director-General of the Directorate-General for Mobility and Transport (DG MOVE) at the European Commission.
Marcich will provide the opening speech of the New Silk Road Conference, which takes place on 27 September in Tilburg, the Netherlands. She will explain how the EU looks at the BRI project, which entails railway and maritime connections between the two continents. The New Silk Road -the better known term- is only a part of this network. The following is an interview with the senior official by RailFreight.com.
To which extend does the EU wish to participate in the BRI?
We could work with China to make the BRI better. We are paying attention to its development but without participating in, or being directly associated to the initiative. The EU has its own transport network policy – also known as the TEN-T Policy, where TEN-T stands for Trans-European Transport Networks. Our main goal is to promote its implementation in the EU, but also beyond, in particular in our neighbouring partner countries. It is of key importance, in this context, to exchange views on our respective plans and programmes to ensure that BRI will meet TEN-T.
The EU-China Connectivity Platform, one of the pillars of cooperation with China, provides an opportunity to recall the basic rules to apply in the EU when financing an infrastructure project, such as public procurement, competition law and environment. Furthermore, the Commission has communicated the ‘EU-Asia connectivity strategy’, aimed at promoting a more inclusive approach for the development of long distance connectivity with Asia. This strategy is based on our vision of transport infrastructure development.
How does this influence European projects like the TEN-T corridors? CEF funds?
If we are speaking about financing, I would prefer to reverse the question: how can the EU and China cooperate, obviously through fair and transparent mechanisms, in the financing of TEN-T priority projects? This is clearly what we address in the framework of the EU-China connectivity platform. Project and financing cooperation are at the core of our discussions: it covers TEN-T projects in the EU and in its neighbours, but also projects in China.
Regarding the influence of the BRI on TEN-T corridors, I think that we indeed need to assess the possible impact of increased trade volumes over long-distance railroad connections between Europe and Asia, or through our ports as gateways. It is not excluded that we foresee adjustments to the TEN-T network priorities (the revision is scheduled for 2023) to cope with a potential increase of traffic flow, impacting the capacity of our network or terminals.
What objections (if any) does the EC have towards the Belt and Road initiative?
Focussing on infrastructure alone might not always lead to economic growth, especially in fragile countries, and in particular when the main sources for financing these projects are loan-based. Debt-fuelled investment is not a reasonable option for most countries on the Asian continent, but also for countries closer to the EU. The focus should be on sustainable projects, while for the time being, the BRI approach gives the impression that what matters is the size of the projects, rather than their economic and social utility.
Furthermore, transparent and non-discriminatory procurement is, in this context, the best means to ensure cost effectiveness and reduce the risk of misappropriation of funds. It is amazing to find that 89 per cent of Chinese-funded projects go to Chinese companies, leaving a mere 7 per cent to local contractors. When projects are funded through multilateral banks (World Bank, Asian Development Bank) the share of local contractors is above 40 per cent.
How do these objections influence policy?
I think that we should have a clever and proactive approach towards the BRI, and this is exactly what we try to implement through the EU-China Connectivity platform. The BRI exists: it is a fact. The BRI can be improved: it is evidence. Beyond the question of the overall sustainability of the projects, in accordance with the principles laid down at the Paris’ conference on climate, three years ago, the BRI should not only be promoting infrastructure projects, but also efficient transport.
This means looking at energy efficient solutions along the New Silk Road. This also means looking at the economic model of these long-distance services, in particular the ones overland. Re-balancing the flows and assessing ways to make land transport operations simply viable is therefore a priority in our discussions with China.
How could the cooperation between China and the EU be improved? What must be done and by whom?
As in all cooperation, there are things that can be improved. It is a step-by-step approach. This focuses in particular on sensitising China on the need to be fully in line with our TEN-T policies and priorities when planning or financing projects in Europe and neighbouring countries. In this context, the promotion of the TEN-T policy (and all related policies) must be a priority in our discussions. This is not only an objective for the Commission, it should also be the line followed by our Member States, when negotiating with China in bilateral or multilateral frameworks, such as the 16+1 Initiative.
Finally, enhanced cooperation with China also goes through the practical implementation of its commitments to transparency and a level playing field, free and open trade, market principles and respect of international norms. We are far away from an optimum situation, but we are working hard to convince China that this is a key aspect of our cooperation. This would be beneficial for both parties and for the countries in between.
New Silk Road Conference
Do you want to hear more about the New Silk Road, the EU stance or the Chinese perspective? All these will be discussed at the New Silk Road Conference on 27 September in Tilburg, the Netherlands. More information about this conference can be found here. Here you can register for the event.