The benefits for the EU stemming from the decade-long Belt and Road Initiative

Chinese President Xi Jinping proposed the Belt and Road Initiative (BRI, Silk Road) in 2013, and more than one hundred and sixty countries have followed suit. The total population accounts for over 50 per cent of the world and the economic scale exceeds 33 per cent.

Europe, however, has not yet fully realised the importance of building the BRI. The reason for this lies in the fact that, apart from the lack of mutual political trust caused by differences in systems and values between the two sides, the most important thing is that Europe has not yet truly understood the BRI itself.

Needless to say, China-EU cooperation in the BRI is a win-win economic situation for everybody. The BRI consists mainly of two parts.

The first is the major building of infrastructure. There are countries and regions along the BRI route whose infrastructure lags behind that of China and others whose urbanisation rate is lower than China’s, while the Chinese urbanisation rate is only 53%. It is therefore estimated that there are more than one thousand large-scale infrastructure projects and investment exceeds 1 trillion US dollars. China alone will invest a total of four trillion dollars in countries along the BRI route.

Excluding China, according to the relevant indicators and data from the World Bank’s Human Development Report and Global Competitiveness Report, the investment demand of countries and regions along the route will range from 9 to 21 trillion US dollars in the future.

Furthermore, there are countries that lag behind China in education and health. While China’s investment in education and health accounted for about 3 per cent of the total social investment in 2015, many other countries along the BRI route have annual investment needs in health and education in the region ranging from 270 to 600 billion US dollars.

The huge building of infrastructure can provide a market for European technologies and products. Europe has high-end technologies and products in the areas of large-scale equipment manufacturing, infrastructure construction such as hydropower pipeline networks, and financial services, and is also familiar with the African market. China obviously has a large number of mid-range products, production lines and equipment manufacturing capacities, which are cost-effective and meet the needs of countries along the route. The two sides are complementary. Once the infrastructure is improved – such as more airports and movements of people – demand for European airbuses would be stimulated.

The second part concerns the huge trade volume. The BRI will enable China’s annual volume of trade with countries along the route to exceed 2.5 trillion US dollars over the next four years. From January to November 2016 alone, the volume of trade between China and the countries along the BRI route reached 848.9 billion US dollars, accounting for 25.7% of China’s total foreign trade in the same period, thus greatly promoting the economic development of various countries and even Europe.

The BRI is currently in an expansion phase but, according to China Railway Corporation statistics, 308 China-Europe trains were already started in 2014, with an increase of 285 per cent. In 2015, the number of routes increased 2.7 times over the previous year. In the first half of 2016, a total of 619 China-Europe trains were operated, with a year-on-year increase of 150 per cent. A double-digit growth trend continued to be maintained.

The travel time of China Railway Express has been greatly reduced. It can reach Europe in 12 days at most. The number of China Railway Express trains permanently running in 16 Chinese cities has reached more than 12 towns in 8 European countries. Hence, behind such a high growth rate, there is the huge commercial demand from all sides.

If cooperation between China and Europe in the BRI is successful, it will help solve the political and economic challenges facing Europe, particularly the EU. If the EU’s economic problems are mitigated or solved effectively, this will help the cohesion and credibility of the EU – which is still considered a colony of the United States of America – promote EU’s unity and stability, and reduce the difficulties of current political integration.

From China’s perspective, the two sides have become a closer community of destiny and should have a more direct willingness and motivation to support a real unification of the EU with concrete actions.

Furthermore, the implementation and success of the BRI will change the pattern of world civilisation: from today’s US-Atlantic-Western Europe single core to the China-Eurasia-Western Europe dual core. If Europe – or the EU, whatever you want to call it – were to play an important role, it would enhance its status and role in the world, and also its geopolitical weight would increase: it would go from being an arms dealer for allies – see the case of Ukraine – to a major player and decision-maker on the international scene.

On the other hand, the EU could defuse the negative impact and its weakening due to Brexit by standing stronger – and not through third parties – to face the strategic geopolitical challenges caused by Russia’s powerful comeback.

It must be said, in particular, that there is no geopolitical conflict between Europe and China. Even if China soon becomes the world’s largest economy, it will not pose a challenge or threat to Europe. On the contrary, as long as Europe seizes the historic opportunity of China’s rise, its global status will be strengthened instead of declining. Precisely as the UK did when it established a special strategic relationship with the emerging US hegemonic power after World War II, thus maintaining a personal global balance of power, also guaranteed at the UN.

The BRI passes through many poor countries, and the per capita income of these regions is only 60 per cent of the world’s average per capita income. There are many Muslim countries, and the BRI will promote their economic development and improve their standard of living. As we know, any economic development inevitably brings local stability and peace, and reduces the pressure of refugees globally, especially in the West. On the other hand, economic progress also provides a viable development model for further Muslim countries, so as to oppose and dispel the expansion of Islamic fundamentalism. This not only plays a role in eliminating global terrorism, but also directly contributes to improving the security environment in Europe.  

This is the reason why former French Prime Minister Dominique de Villepin commented on the BRI’s approach to the future in a very positive way: “It is a constructive and open map of the future that will bring more security, stability and development to important areas of the world. The BRI is a new step in globalisation”.

At a time when globalisation is facing difficulties, China’s proposal of this strategy is itself a manifestation of responsibility. The success of the BRI designed to pursue multiple victories will create a new engine of economic development around the world. This not only promotes the stability of global economy, effectively resisting frequent economic crises, but also helps globalisation not to stagnate and negatively affect the poorer segments of the population.

The success of the BRI will stimulate and compete with existing multilateral mechanisms, improve their functioning and give new momentum to global development.

For instance, following the establishment of the Asian Infrastructure Investment Bank (AIIB), founded in Beijing in October 2014 – an international financial institution proposed by China, which contrasts with the International Monetary Fund, the World Bank and the Asian Development Bank, which are under the control of the US capital and strategic choices – the aforementioned Asian Development Bank approved a loan of approximately 100 million US dollars for a highway project in Pakistan in June 2016. At the same time, the AIIB also provided a loan corresponding to 100 million US dollars in the same month. Moreover, the UK Department for International Development provided a grant of 34 million US dollars for the project.

The BRI is an important strategy formulated in such a way that it is a win-win mechanism fre everybody. Therefore, based on reality and the near future, the urgency and importance of the BRI may be no less in Europe than in China.

The EU is currently facing multiple negative situations: economic, security, racial and refugee crises and even a possible disintegration crisis because, as a State entity, it is not at all felt as their own by the citizens of its Member States that have their own national shaping processes in the ultra-millenary history as their reference and not the decisions taken in advance by elite politicians.

Although the BRI is not a main cure for Europe’s ethical and economic illnesses, it could create good conditions for Europe to face and solve these crises. From a broader historical perspective, Europe has been a lucky continent. In the aftermath of World War II, the United States brought Europe back to life with the mutually beneficial Marshall Plan, but especially for the USA, which built its anti-Soviet rampart and future hundreds of military bases projected towards Eurasia. In the 21st century, while European integration is facing unprecedented difficulties, China is bringing a win-win BRI.

With specific reference to Italy, which is withdrawing from the BRI, it would even be pointless to say the same things. Servility and sycophancy vis-à-vis the United States, combined with physical fear for any decisions contrary to the White House’s orders, as tragically happened in the past. At the same time, those who will lose out are the Italian entrepreneurs who were benefiting from the BRI, and would have liked to continue this win-win relationship. In practice, it is Italy as a whole that stands to lose. In the meantime, other EU and non-EU European countries are following the BRI, free of our fears: Albania, Austria, Belarus, Bosnia Herzegovina, Bulgaria, Cyprus, Croatia, Denmark, Estonia, Greece, Ireland, Latvia, Lithuania, Luxembourg, North Macedonia, Malta, Moldova, Montenegro, Poland, Portugal, Czech Republic, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, Spain, Ukraine and Hungary. Unlike what is often said, France does not systematically oppose the BRI, but the emphasis is constantly placed on the conditions to be met for cooperation to be fruitful and truly beneficial to all, as it should be.

Giancarlo Elia Valori
Giancarlo Elia Valori
Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is a world-renowned Italian economist and international relations expert, who serves as the President of International Studies and Geopolitics Foundation, International World Group, Global Strategic Business In 1995, the Hebrew University of Jerusalem dedicated the Giancarlo Elia Valori chair of Peace and Regional Cooperation. Prof. Valori also holds chairs for Peace Studies at Yeshiva University in New York and at Peking University in China. Among his many honors from countries and institutions around the world, Prof. Valori is an Honorable of the Academy of Science at the Institute of France, Knight Grand Cross, Knight of Labor of the Italian Republic, Honorary Professor at the Peking University