China and Europe: Buying hearts and minds? by Ian Bond
For a country whose GDP per capita is $16,800 (in purchasing power terms), China has deep pockets. Estimates of how much its ‘Belt and Road Initiative’ (BRI) to improve connections between East Asia and Europe might eventually cost vary between $1 trillion and $8 trillion (most of which will be in the form of long-term loans to pay for Chinesebuilt projects). By contrast, the EU’s GDP per capita is $41,000, but its proposed budget for all its external actions globally from 2021-2027 is only €123 billion – small change in Chinese terms. When China first launched ‘One Belt, One Road’ (as it was initially known) in 2013 its focus seemed to be on the land routes from China to Europe via Central Asia. The EU thought Chinese funding would develop an area badly in need of better transport infrastructure, complementing a more modest European programme known as TRACECA (Transport Corridor Europe Caucasus Asia), which has spent more than €180 million since it began in 1993.
Image: © European Union, 2018
At the same time, the European Commission was concerned that good governance, sustainability and competitive tendering were a lower priority for China than for the EU. In 2015, China and the EU created the ‘Connectivity Platform between the EU and China’, the aim of which was to promote “an open and transparent environment and a level playing field for investment” in AsiaEurope transport connections. Commission officials are reasonably satisfied with cooperation so far on specific projects.
Since then, however, the EU’s concerns about China’s wider ambitions have grown. Much BRI investment has been in port facilities and other critical national infrastructure, particularly along the ‘Maritime Silk Road’. China is increasingly using its soft power (or ‘sharp power’, as Christopher Walker and Jessica Ludwig of the US National Endowment for Democracy term it) for more political ends, including through its Confucius Institutes, teaching Chinese language and culture, of which there are more than 130 in the EU. A Hong Kong-based professor, Willy Lam, has described the institutes as bases for infiltrating host universities. Germany, once keen to attract Chinese investment, now worries that it may entail China acquiring (and German industry losing) valuable intellectual property. Financially, BRI projects have been a mixed blessing. Some of the earliest recipients of Chinese loans to support infrastructure projects, including Sri Lanka, now have unsustainable debt levels, prompting a backlash against BRI. A study by the