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Free market countries align to counter state-sponsored capitalism, particularly its Belt-and-Road initiative
At the Asia-Europe meeting, leaders issued a statement in which they indirectly endorsed policies that went against Chinese investment practices.
Photo:
Pool Frederic Sierakowski / Zuma Press
US efforts to counter China's global economic push were favored Friday by European and Asian countries, who also want to capitalize on Washington's fight with Beijing.
The 28 members of the European Union, Norway, Switzerland and 21 Asian countries, including China, have committed to respect market principles and international standards applicable to infrastructure projects at the time. a summit in Brussels.
"Leaders agreed to promote transparency, a level playing field and an innovative financing mechanism," said the Asia-Europe meeting statement.
The Undeclared Goal of the Agreement is China's Belt and Road Initiative: No less than $ 1 trillion of Asian infrastructure projects in Europe have enriched Chinese companies and boosted the influence Beijing at the expense of its neighbors. China subscribed to the statement, which is not specifically aimed at Beijing's economic policy, in line with its official stance that commitments meet global standards.
EU and Japan-led US allies want to take advantage of the trade fight between China and Washington to expand into Asian markets, which require about $ 26 trillion in infrastructure investment. China's European and Asian competitors said Beijing was excluding them by forcing uncompetitive offers in exchange for China-funded development projects. China says its agreements are in line with international standards.
China Infrastructure Initiative
China is building and financing a global network of commercial and energy links to fill the gaps in existing infrastructure in Asia, Europe and Africa. Here are some of the main projects of its Belt and Road initiative:
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The alignment of free market countries with Chinese-backed capitalism shows that while many people do not appreciate Mr. Trump's combative approach to diplomacy, they fundamentally agree that the influence of China must be controlled.
European and Asian initiatives against Chinese investment practices follow Washington's moves to go beyond tariffs to increase economic pressure in Beijing. The United States recently announced that it would double funding for international infrastructure projects and, in its revised North American trade pact, prohibited Canada and Mexico from entering into free trade agreements with other countries. "non-market" countries, excluding new agreements with Beijing.
EU officials have interpreted China's conclusions on the meeting's conclusions as a sign of their willingness to strengthen partnerships in the context of the intensification of the economic struggle led by Beijing in the United States. United. Silk Road meets global standards.
"All projects are conducted according to the principles of consultation, joint contributions and shared benefits," Chinese Foreign Ministry spokesman Lu Kang said here Friday. Beijing has supported "open, transparent and inclusive" businesses, he said, calling on other developed countries to "understand what is needed and offer help without any political constraint".
European officials say they see discrepancies between Chinese rhetoric and action and push for common definitions and practices for infrastructure investments at the Asia-Europe meeting. The standards promoted at Friday's meeting are consistent with EU laws and rules used by organizations such as the World Bank, which do not always apply in countries where China is active.
The EU effort is being spearheaded by the bloc's executive – the European Commission – and includes the launch this week of an online portal to track the sustainability of projects. He also seeks to exploit nascent Asian disenchantment with massive Chinese companies.
"Calls for bids must be open and transparent to promote good governance and fair playing conditions," Vice President Jyrki Katainen said on the sidelines of the summit on Thursday. "It's an approach that works and is generating demand from Asian countries."
EU officials said they hoped that Asian countries would adopt Western standards when questioning Chinese practices. Japanese Prime Minister, Shinzo Abe, expressed his support for the EU initiative and called for a wider adoption of openness, sustainability and financial feasibility in order to guarantee quality infrastructure projects.
The massive initiative of Chinese President Xi Jinping has faced a further setback. The new Malaysian Prime Minister suspended projects worth $ 22 billion. Sri Lanka has struggled to repay more than a billion dollars of Chinese debt and has granted a company run by the Chinese state a lease of 99 years allowing it to manage a port. Pakistan, another Chinese borrower, recently turned to the International Monetary Fund for financial assistance.
The United States is also increasingly challenging Mr. Xi's initiative. Vice President Mike Pence defended this month "a fair and transparent alternative to the Chinese diplomacy of the debt trap". In August, Congress and the Trump government announced that the United States would raise funds for foreign infrastructure projects worth $ 60 billion.
In the same way, Europe has pledged to release money for Asian countries that have adopted Western practices in terms of tendering and financing. As Chinese investments reach billions, the EU has mobilized more than $ 8 billion in funding in Asia for the period 2014-2020. The commission proposed to increase its external investment budget to 60 billion euros ($ 69 billion) by 2021-2027, which, according to the EU executive, "would make a significant contribution" to investment in Europe-Asia infrastructures.
"Some countries are changing their minds or realizing that China's generous money can sometimes be toxic," said a senior EU official. "Let's hope more and more countries will join and that will force China to change its behavior. It will not happen overnight.
The push against Beijing's practices comes as Asian and European partners also seek to preserve the rule-based international order established by the West after the Second World War. Anxious to worry about Trump's "America First" policy, Asian and European leaders also reiterated their support for the World Trade Organization and expressed their willingness to redouble their efforts to reform global surveillance.
Write to Emre Peker at [email protected] and James T. Areddy at [email protected]
