Systemic rivals: How China’s Belt and Road challenges the EU

The monumental project isn’t about infrastructure but the creation of a new economic and political order.

By BRUNO MAÇÃES

9/15/20, 12:13 PM CET Updated 9/15/20, 10:26 PM CET

Bruno Maçães, a former Europe minister for Portugal, is a senior adviser at Flint Global in London and the author most recently of “History Has Begun: The Birth of a New America” (Hurst, 2020). The paperback edition of his “Belt and Road: a Chinese World Order” will be published this month.

In Pakistan, the Belt and Road project is everywhere. A dinner at the Islamabad Club quickly turns into a reminiscence of different visits to China. After a lecture in Lahore, a group of young men from Baluchistan want to know if China’s monumental economic initiative will develop their region — or cause it to lose its identity.

The acronym for the corridor linking China and Pakistan can be heard in hotel lobbies and restaurants; it stands out for those who cannot understand Urdu. There are young people who have come of age since the beginning of the initiative and for whom it constitutes the only possible horizon for professional advancement. But there are also a few who hope to reduce its impact and fear for a world where Pakistan has become a Chinese colony.

Earlier this year, I spent three weeks traveling in Pakistan, the crown jewel of the Belt and Road project, the country where the initiative first took root and therefore the most plausible candidate for the place where its future can be surmised and understood.

There are many in the country who worry Pakistan is climbing too deep into China’s lap.

So central is the Belt and Road to Pakistani politics that it should not be thought of as a specific enterprise. Rather, it provides the overarching framework for every economic policy and project. In short, the initiative is something that should feel very familiar to policymakers in Brussels and other European capitals.

In my discussions with economic authorities and think tanks, it quickly became obvious that the main debate in Pakistan today is about the best way to adapt policy decisions and reforms to the Belt and Road framework. The Belt and Road can thus be compared to the European Union and the role it played for countries in Central and Eastern Europe after the 2004 and 2007 enlargements. Which decisions should these countries make in order to better occupy their place within the given political and economic order?

For countries on the periphery of the new Chinese empire — but also in Africa — the Belt and Road project provides a path capable of saving them from painful isolation, but it also threatens to prevent any future links to Western societies. You cannot integrate with two different and opposing models.

That many in the West still think of the Belt and Road purely in terms of infrastructure is something I find deeply perplexing. In the project’s inaugural speech that Chinese President Xi Jinping delivered in Astana in 2013, infrastructure was no more than one of the five pillars of the Belt and Road — and very obviously not more than an ancillary one. The real action was clearly elsewhere.

At the time of Xi was giving his speech in Astana, it was common to hear from different officials and intellectuals in Beijing that the Belt and Road was meant to be completed in 2049, around the time of the first centennial of the new China.

Last year, while living in Beijing, I started hearing that the temporal horizon was even longer. Many spoke openly of a 100-year project. This is not the time-scale of an infrastructure plan. The Marshall Plan was concluded in just a few years.

Interestingly, in Pakistan this idea — that the Belt and Road is a project of economic and technological development, culminating in a new global political and economic order — is clearly understood.

There are many in the country who worry Pakistan is climbing too deep into China’s lap. An officer in one of the state policymaking bodies wanted me to have a trove of documents suggesting staggering levels of corruption in two Belt and Road contracts. He alleged they had been overcharged by something like $3 billion. The documents were public, but no newspaper had shown any interest.

It is revealing too that the infamous Inter-Services Intelligence, the country’s top intelligence agency, has a special unit dedicated to collect critical information about the China-Pakistan Economic Corridor. The political establishment in Pakistan may be enthusiastic about the initiative, but the country’s security apparatus has many doubts. That explains why it is still possible to voice public criticisms of the initiative or why security measures continue to hamper its development.

It also explains why some in Pakistan are eagerly looking for alternatives. When I met with the ruling party in Islamabad, its chief organizer Saifullah Khan Nyazee seemed surprisingly interested in the idea of deepening the relations between Pakistan and the EU.

This would follow a diversification strategy. As the country’s elites are quickly learning, Pakistan cannot rely on China alone. The benefits that can be extracted from Beijing will actually diminish as Pakistan becomes too dependent on China.

There is logic to a strategy of addition, a multivector foreign policy — but there is also a problem. As Pakistan becomes fully integrated with the Belt and Road, it will align itself with China on a wide range of political and economic standards: rules and principles ranging from internet governance to financial supervision, state aid and environmental standards, among many others. Relations with the EU will become increasingly difficult and often impossible.

The question is certainly not limited to Pakistan or even to Asia. It is being raised everywhere. On March 12, 2019, the very same day the EU published a document calling China a “systemic rival” — could it be a coincidence? — European Commissioner Johannes Hahn tweeted his opinion about a recent decision by lawmakers in Bosnia’s Federation, one of the two political entities comprising Bosnia and Herzegovina.

Lawmakers in the country had approved a public guarantee for a large loan from state-funded Export-Import Bank of China. The loan would help Bosnian utility EPBiH build a 450-megawatt unit at the Tuzla coal power plant and replace three aging units. China Gezhouba Group and Guandong Electric Power Design would construct the new unit.

To Hahn, this showed that Bosnian authorities were not committed to a European path for the country. The loan guarantee violated rules on state aid and subsidies, while sharply deviating from European environmental principles and guidance.

One day, in the near or distant future, when it becomes a question of deciding whether Bosnia can join the EU, it may already be too late: The country will have a legal and economic order mirroring that of China and opposed in every way to the fundamental principles governing the EU.

Because of the economic and legal nature of the Belt and Road — its character as a political and economic order — the initiative operates in the very same areas where the EU likes to think of itself as a global giant. China and the United States may be actively competing on geopolitics — but there is a second great game going on and in this one Beijing and Brussels are direct rivals.

Two separate universes are being carved and the only question is where the border will eventually be drawn: Pakistan, the Balkans or somewhere in between.

This article has been updated.

Source: Politico “Systemic rivals: How China’s Belt and Road challenges the EU”

Note: This is Politico’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.