European Union Against China

The international initiative of the European Union called Global Gateway, conceived as a global alternative to the Chinese mega-project “Belt and Road”, is gaining clear contours. The EU intends to finally approve about 70 priority infrastructure projects abroad for the next year.

European Union Against China

The first clearly articulated intention to increase the competitiveness of European states and their political weight in the international arena through the development of a global network of projects in third countries was announced in the summer of 2021. It was then that European officials were instructed to work out an initiative for the EU to interact with partners around the world in the field of infrastructure projects, digital technologies, transport and energy (primarily green energy).

At the time, Brussels felt that by helping underdeveloped countries accelerate their transition to green and digital technologies, Europe would help itself by strengthening both trade ties and the bloc’s global influence.

By December 2021, the idea came up with a beautiful name – Global Gateway (“Global Gate”) and determined a budget of €300 billion, which the European Commission decided to raise until 2027 through the European Fund for Sustainable Development, other European financial institutions and development funds, as well as with the help of private business.

At the same time, European officials made no secret from the very beginning: this brainchild of the European Union is conceived not only as a purely economic project, but also as a geopolitical alternative to the Chinese Belt and Road megaproject.

“When Africans were asked in 2020 which partner had the most positive impact on their countries, only 10% mentioned the European Union. 47% said China,” said European Commission President Ursula von der Leyen.

Not without envy of China’s influence, explaining why Europe needs to invest not only in the countries of the Eastern Partnership and the Balkans, from which the Global Gateway began, but and countries in Africa, Asia and Latin America. That is, where Chinese economic influence is especially strong.

The statement of the same von der Leyen was also a clear stone against Beijing: “We want to create ties, not dependencies.” As you know, in the West, China is often blamed for deliberately creating debt traps for poor countries, including Montenegro and Sri Lanka, by connecting them to economically unsustainable joint projects.

Beijing, of course, has invariably denied such accusations, insisting that the Belt and Road only creates opportunities, not risks. This was partly acknowledged by independent analysts: noting that Chinese loans tend to be provided with higher interest rates than Western ones, experts also said that the “debt trap” narrative is largely unfounded.

Finally, another indication that the infrastructure network planned by the Europeans is nothing more than an attempt to challenge the influence of China often called an autocracy in the eyes and behind the eyes, can be considered the ideological background that the EU attached to the Global Gateway.

“This is a value-driven proposition. Our investments reflect European social and environmental standards,” Jutta Urpilainen, EU Commissioner for International Partnerships, recently told Foreign Policy, implying that the Europeans’ new flagship infrastructure project will offer developing countries a viable alternative tied to what the EU thinks are the right values.

However, if politicians considered investments in third countries to be strategically important, then business treated them more as a risky and economically inexpedient undertaking. Obviously, therefore, the EU did not succeed quickly in moving from words to deeds.

Uneven start

At the beginning of this year, the Global Gateway project finally moved from the stage of good wishes to the stage of concrete actions. According to the publication Politico, European officials together with business have already identified about 70 priority projects that the EU will begin to implement this year.

European officials intend to approve the final shortlist in the week starting on February 6. And in the coming months, a dedicated business advisory group will be set up as part of the Global Gateway management in the EU.

At the same time, a number of projects, half of whose resources are intended for Africa, are already known. Among them, in particular, is the construction of a submarine fiber-optic cable to connect the countries of the Mediterranean and North Africa, the construction of a dam and a hydroelectric power station in Cameroon, a partnership to develop infrastructure for the production of clean hydrogen in Namibia with a view to its subsequent export through the port of Walvis Bay.

In addition, as part of the implementation of the Global Gateway, the attention of Europeans fell on one of the most important countries of the entire African continent – South Africa. On January 27, EU chief diplomat Josep Borrell, who was in Pretoria, announced €280 million in grants to South Africa to “support green recovery policy reforms” and decarbonize the coal-dependent economy.

Finally, the EU’s immediate plans for the implementation of the Global Gateway include an energy project partnership with Indonesia, a digital communications project in the Philippines and two projects in Mongolia. As well as several projects in the region, traditionally considered a sphere of interests and influence of Russia.

In particular, the EU “fitted in” with investments in the field of hydrogen in Kazakhstan, plans to improve transport links in Central Asia, and a hydroelectric power plant in Tajikistan worth €5 billion, which, according to the plans of the participants, should reduce the region’s dependence on Russian energy.

Over the past year, a considerable number of analysts have expressed doubts that the EU can be considered a major player in a field dominated by China for the past decade. Since 2005, China has invested almost $2.3 trillion in about 4,000 overseas investment and construction projects. And Chinese private tech giant Huawei has built about 70% of all 4G networks in Africa.

At the same time, it was the Belt and Road projects that accounted for about $370 billion, recently calculated at the American Enterprise Institute. In 2022 alone, as part of this initiative, Beijing signed contracts worth about $100 billion. And this clearly gives China a decent head start compared to the European Union, which was only at the very beginning of its path to expand its economic reach in the world.

However, according to Niall Duggan, an expert from the Faculty of Public Administration and Politics at University College Cork (Ireland), the EU is still the main player in terms of international development assistance for the regions of Latin America, Africa and South Asia.

— In many ways, Global Gateway is not a new funding, but rather a branding of current projects of the EU member states under the EU flag. This is done in order to show the scale of the participation of the union as a group, and not individual actions of member states. And this project does not so much challenge China, but rather reacts to Chinese policies, such as the Belt and Road, which is a challenge to the position of the EU, the expert said in an interview.

At the same time, according to his logic, both megaprojects – Chinese and European – can coexist quite calmly, since there is nothing in any of the concepts that would require the recipient countries to make a choice. Indeed, it is not at all easy for developing and undeveloped countries to take one while refusing the other.

According to a number of estimates, Africa alone needs investments in infrastructure worth $150 billion a year, which means that there is enough space for all interested investors to turn around there.