LP Brussels
Chinese Belt & Road Initiative must be a two-way street

Chinese Belt & Road Initiative must be a two-way street

By Mark Watts

No exact figures exist on how much China is spending, or indeed has spent, on the Belt & Road Initiative (BRI), of which the Maritime Silk Road forms a major part, but it’s estimated to be over a $1 trillion. It is certainly one of the most ambitious infrastructure projects ever conceived.

Of course it’s not a charitable act, and goes beyond what has been described by some as simply China building reputation and improving the conditions of their neighbours. Let’s not be naive. This is undoubtedly about China trying to assert its economic and political and maybe even military interests, and to some extent to counter the much-touted U.S. “pivot to Asia” that occurred under President Obama.

But put another way, isn’t it simply a way for China to develop new investment opportunities, cultivate export markets, and boost Chinese incomes and domestic consumption? Isn’t what any other rapidly growing economy and world power would want or should do? Isn’t it better than protectionism, imposing tariffs and other obstacles to trade, or worse still, pursuing isolationism?

A big debate has begun over how Europe should respond. How should Europe’s port and maritime industries respond.

Europe’s future economic success lies in protecting and building our share of global trade. To achieve that we need to remain economically competitive and innovative, protect and promote the rules-based order for global trade, and invest in connectivity, in particular
our ports and maritime industries, the motorways of world trade.

We should therefore enthusiastically welcome the Maritime Silk Road, which has the potential to vastly improve world trade flows, in all directions. But welcome it with an ‘eyes wide open’ approach. It must not just be mutually advantageous; it must be seen to be so. If it isn’t, it simply won’t work.

As we have seen, there is growing backlash to Chinese investment in recent elections around Asia. Some of the states that were supposed to have benefited from the initiative have now turned their backs on it or accuse China of using debt to leverage ownership and control of national strategic assets. There are many criticisms, not least from economic,geo-political and military rivals in the region and beyond.

To rebuild and strengthen confidence in the initiative, and to ensure European countries fully engage, the BRI needs greater transparency, more robust financial sustainability and stronger systems of governance in place, and at a global level we need to continue to strengthen the rules-based system of trade.

Europe’s crying out for investment, and our increasingly congested and environmentally unsustainable transport systems are seriously prejudicing our international competitiveness. If we can strengthen the Maritime Silk Road in a way that modernises our infrastructure, reduces our carbon footprint, and promotes global trade, it’s a win-win.

Of course, Europe should step up to the plate. The Maritime Silk Road does not have to be a one-way street. There is considerable investment now underway from the European private sector, and schemes such as the EU’s €24 billion Connecting Europe Facility (CEF) for transport is helping us rise to the challenge. But it isn’t enough.

So let’s continue to make the case that a competitive Europe needs not just a rules-based order for global trade, but also significantly improved maritime connections to facilitate two-way trade.

We should therefore enthusiastically welcome and indeed encourage investment from the EU, US, China, or indeed anywhere else. With our ‘eyes wide open’.

For Mark’s recent Port News interview in Italian see here: https://www.portnews.it/via-della-seta-nei-due-sensi/

Mark Mark’s vlog on the BRI see here: https://www.youtube.com/watch?time_continue=5&v=9mf7LNt2uXo

Mark Watts, is Director of LP Brussels, co-ordinator of the trade body UK Transport in Europe, a former two-term Member of the European Parliament, who specialised in ports and the maritime industries. He was Rapporteur on the EU-China Maritime Agreement. He writes in a personal capacity.

LP Brussels