Connectivity-driven cooperation between China and Europe

By Wang Yiwei, director, Center for EU Studies, Renmin University; Senior researcher, Chongyang Institute for Financial Studies

After attending the 17th China-EU leaders’ meeting in Brussels and ending his visit to Belgium, Chinese Premier Li Keqiang has arrived in France for a state visit and will visit the headquarters of the Organization for Economic Cooperation and Development (OECD). China’s Belt and Road Initiative and the European Juncker Plan are highlighted during his visit.

The Belt and Road Initiative attracts Europeans in two ways. The first is the relationship between the Silk Road and Europe began when German geologist Baron Ferdinand von Richthofen coined the name Silk Road. The Chinese initiative also borrows from the experience of European integration in terms of the free movement of goods, capital, labor and people. The second is the new Silk Road offers another option for Europeans who have lost confidence in the Transatlantic Trade and Investment Partnership and have begun to look east. The 16+1 cooperation mechanism has injected new impetus into bilateral ties and mutually beneficial cooperation.

Those who are friendly with China, welcome the Belt and Road Initiative, while those who are not, doubt it. Those who expect to gain benefits from China’s development, focus more on the gains from it while those who are conservative and fear change doubt the motives behind the initiative and the achievements it can make. 

In short, Europeans hold two expectations towards the initiative: Firstly, it should be in line with their interests by helping European companies enter the Chinese market and economic belt project. Secondly, it should conform to their values of human rights, democracy and the rule of law. 

Luigi Gambardella, president of the ChinaEU, confessed in interview that the 315 billion euro Juncker Plan is much smaller than the USD2.1 trillion Belt and Road Initiative. But China-EU connectivity is stimulating investment negotiations with possible cooperation in EU reindustrialization, railway and harbor redevelopment, the single energy market and a 5G-based single digital market. There are hopes that China-EU innovative cooperation can create a smart Silk Road.

“It’s very encouraging that there is a strong sense of urgency and growing enthusiasm to seize the window of opportunity to cement and upgrade China-EU high technology and information and communication technology cooperation and adapt to the sweeping digitization of the world economy,” Yang Yanyi, head of China’s mission to the EU, spoke at a China-EU seminar in Brussels.

“The two sides have big potential cooperation in high-tech innovation and smart cities like the green energy project of Berlin and the traffic network project in the Azores of Portugal.”

The Belt and Road Initiative aims to realize infrastructure connectivity in energy and communication. Synergy between the Belt and Road Initiative and the Juncker Plan can be extended to the Baltic Sea crossing Central Asia and Russia, to the Mediterranean economic belt crossing middle Asia and the Middle East.

Chinese companies, especially in the banking sector, can participate in the Juncker Plan through technology cooperation and investment by means of government bonds and projects. Just like EU countries joining the Asian Infrastructure Investment Bank, China also has high expectations joining the Juncker Plan.

Europe once led the world in development and was the terminus of the traditional Silk Road. European countries’ involvement in Public Private Partnership and Build, Operate and Transfer projects along the Silk Road Economic Belt ensures high-quality development through their discourse power and standard-making.

Of course cooperation between the Belt and Road Initiative and the Juncker Plan needs multi-layer communication with EU institutions and countries, central and local governments, companies and industries. 

Integration of interests and standards is critical to cooperation. To ensure smooth cooperation and new development of investment and trade, the establishment of a China-EU legal mechanism has been suggested for managing intellectual property rights, labor and environmental standards, state-owned corporate codes and equal treatment.