The European response to the new Chinese silk road is taking shape, the maxi infrastructure plan launched by Beijing to increase its influence especially in poor and middle-income countries. The European Commission, reports the Financial Times (which obtained a draft of the project), wants to mobilize up to 300 billion euros of investments in infrastructure and other programs for a plan called “Global Gateway”. The objective, even if not explicitly stated, is precisely that of competing with the influential Chinese development plan known as the “Belt and Road”. The idea had already been discussed at the G7 held in England this summer, when Biden and other leaders of Western nations spoke of the need to oppose Chinese expansion into the world.
Since 2013, dozens of countries have signed up to China-backed projects such as railways, bridges and ports. Many were satisfied, but there are also several states that have complained of overly burdensome debts and projects with rather poor environmental and construction standards. Europe, the document reads, would like to offer a more sustainable and greener, more efficient and even more “democratic” alternative.
The 300 billion euros will have to be invested by 2027. These are resources that come in part from the EU budget, Member States, European financial institutions and national development banks. But the plan is also to involve companies and investment funds in an extensive way, that is, “to mobilize financing and skills from the private sector and to support access to sustainable finance”. The priorities will be investments in digital, health, climate, energy, transport, as well as education and research.
At this point, a comparison between the two initiatives, European and Chinese, is useful; which one weighs more? At first glance, Beijing’s Belt and Road looks much more substantial. Xi Jinping speaks of 6 trillion dollars. An estimate by Ispi, one of the main Italian think tanks, assumes almost 4 billion dollars. But there is also a calculation by the Economist, released last year, which reduces everything to 400 billion “in loans, grants, but above all loans, which have been spent or are about to be spent in 160 countries with three fifths of the population. world“. To make another comparison, the American Marshall Plan, which relaunched a war-torn Europe, today – according to the Economist again – would be worth 130 billion dollars.
Therefore the European plan, if it really totaled the announced figure, would not be so skimpy. Going a little more into detail, the European Commission explains that 135 billion euros of investments will be mobilized through a new program called “European Fund for Sustainable Development Plus”. Resources will also come from the Luxembourg-based European Investment Bank – also involved in the project. Another 18 billion euros, the Financial Times said, will come from further European Union programs. In all, the draft reads, half of the spending should be guaranteed by European financial and development institutions.
As far as Africa is concerned, Europe has a very strong economic weight, but it is decreasing when compared to Chinese influence. In 2019, before the pandemic, it was still the largest trading partner, with around 30% of trade. But China is now very close. In ten years, its share has increased by 20 times, reaching 200 billion dollars in 2019. Foreign direct investment by Chinese companies, on the other hand, has multiplied by 100. And the West? It has grown less, yet it remains of great weight. Calculations of the International Monetary Fund confirm this: before Covid, the main sources of foreign direct investment in Africa were American, British and French companies.
The Global Gateway, the European alternative to the Silk Road, will also serve this purpose: not to lose any more precious ground.