Logo of Phnom Penh Post newspaper Phnom Penh Post - EU moves to rival China’s ‘new Silk Road’

EU moves to rival China’s ‘new Silk Road’

Content image - Phnom Penh Post
EU diplomatic chief Federica Mogherini. afp

EU moves to rival China’s ‘new Silk Road’

AS doubts grow over China’s vast “Belt and Road” trade infrastructure project, the EU is launching an alternative plan for Asia that it says will not saddle countries with debt they cannot repay.

EU member countries are expected to sign off on the new “Asia connectivity strategy” – which aims to improve transport, digital and energy links while promoting environmental and labour standards – in time for a major summit of European and Asian leaders next month.

Brussels insists the scheme is not a response to any other player, but its launch comes as the sheen fades on Beijing’s “new Silk Road” initiative, which envisions railways, roads and ports being built across the globe using billions of dollars in Chinese loans.

Federica Mogherini, the EU’s diplomatic chief, said talks have been going on for several months with a number of Asian countries that were “interested in looking at the European way”.

“Our initiative will aim at creating jobs and economic growth and benefits for the local communities,” she told reporters. “I would not say if this is different from other’s proposal but this is our proposal.”

The new strategy comes after European Commission President Jean-Claude Juncker called for a more muscular EU foreign policy to match the bloc’s economic clout, taking on not just US President Donald Trump’s “America First” approach but also China’s energetic involvement in Africa and Asia.

Maaike Okano-Heijmans, an EU-Asia relations expert at the Clingendael Institute in the Netherlands, said the initiative was a “very important step” after criticism of the EU in some quarters that it has been slow to respond to Chinese soft power plays.

“We cannot accuse them of not having a vision any more. The challenge is how to turn this into something that’s really an alternative to some countries. Because that requires money and more money and more money,” Okano-Heijmans told AFP, saying “nobody can rival Chinese money”.

President Xi Jinping said earlier this month that China’s trade with Belt and Road countries had exceeded $5 trillion, with outward direct investment surpassing $60 billion.

But some countries are beginning to question whether the strings attached to the money make it more of a burden than a benefit.

While much of the hard detail of the EU scheme – including the vital question of finance – is yet to be worked out, the proposal stresses the importance of “high environmental and social standards” and of the “fiscal and financial sustainability of infrastructure projects”.

This appears designed to directly address a major criticism of the Belt and Road plan, launched in 2013, that the apparent Chinese largesse is effectively creating debt traps.

These fears were highlighted last year when Sri Lanka had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the $1.4-billion project.

Concerns have grown and, in August, Malaysia said it was shelving three Beijing-backed projects, including a $20 billion railway, while Pakistan – until recently an enthusiastic recipient of Chinese money – has vowed more transparency amid fears about the country’s ability to repay loans.

MOST VIEWED

  • Locations shut, dozens more Covid-19 positive

    The Ministry of Health has closed 23 locations in connection with the February 20 community transmission of Covid-19 and summoned for testing anyone who had direct contact with affected people and places. The number of discovered related infections has risen to 76, including 39 women. In a press release,

  • Kingdom's Covid cluster cases jump to 194

    The Ministry of Health on February 25 confirmed 65 new cases of Covid-19, with 58 linked to the February 20 community transmission. The latest cluster cases include nine Vietnamese nationals, five Cambodians, one each from Korea, Singapore and Japan, with the rest being Chinese. This brings the total number

  • Cambodia's Covid cluster cases rise to 137

    The Ministry of Health on February 24 recorded 40 more cases of Covid-19, with 38 linked to the February 20 community transmission. Of the 40, two are imported cases involving Chinese passengers. The 38 include two Vietnamese nationals and one Cambodian, with the rest being Chinese. This brings the total cases

  • Covid cluster raises alarm, health bodies urge vigilance

    The Ministry of Health and the World Health Organisation (WHO) in Cambodia have expressed great concern over the February 20 cluster transmission of Covid-19 in the community. Both entities appealed for vigilance and cooperation in curbing further spread of the virus. Ministry spokeswoman Or Vandine said

  • PM confirms third Covid-19 community transmission

    Prime Minister Hun Sen on February 20 announced the Kingdom's third outbreak of Covid-19 community transmission after 32 people tested positive in just over 10 hours. Addressing the public from his residence after an emergency meeting, Hun Sen said: "I dub it February 20 Community Event, in which 32 cases

  • Cambodia to make auto-rickshaws

    Locally-assembled electric auto-rickshaws could hit the Cambodian market as soon as early in May after the Council for the Development of Cambodia (CDC) gave the greenlight to an investment project at the weekend. According to a CDC press release, it will issue a final registration