Luigi Di Maio, Deputy Prime Minister of Italy visiting the Daci Temple during his meeting with Chinese Vice-Premier Hu Chunhua. Photo Credit: AFP
By: Austin Parenteau, Clumnist
As Italian Deputy Prime Minister Luigi Di Maio publicized his desire for Italy to sign on as a full member of China’s Belt Road Initiative (BRI) global infrastructure project, others in the European Union have voiced opposition to what they see as Chinese geostrategic inroads into the continent. France and Britain, in particular, have refused to ink any deals before further negotiations with China, wary of its growing influence.[i] Ascertaining the potential payoffs of BRI and balancing them against the myriad risks has been a persistent challenge facing the EU’s member states. Truly understanding where the best balance might lie, however, will require an analysis of China’s motivation for embarking upon this project in the first place.
China has not tossed aside its ‘hide and bide’ strategy of the 90s merely for prestige. As its economy has slowed, its consumption of raw materials (especially steel) has similarly ebbed.[ii] This poses a tremendous problem for a system that has endowed its ruling party with legitimacy only insofar as it provides effective governance and prosperity for its citizens.[iii] In an effort to stave off the consequences of overcapacity, China has gone to such extremes as the construction of ‘ghost cities’. But even this strategy has reached the limits of its effectiveness (at least beyond serving as a shadow stock market to circumvent capital controls). Faced with the prospect of resolving this overcapacity problem and dealing with questions of legitimacy, unemployment, gender imbalance, and myriad other stumbling blocks, China could lash out militarily to stir up nationalism, rally around the flag sentiments, and use up resources (in a rather Orwellian manner). However, checkmated militarily as China is by the American navy, Russian leviathan, and geographic features like the Himalayas, such aggression would prove an unfruitful and unwise path. Rather, China has invested all its energy and faith into the One Belt, One Road Initiative. In fact, China is so committed to this project that it has, in an unprecedented break with tradition, made it a central tenet of the CCP Constitution itself.[iv] Its success is dependent upon a variety of factors, including security in some of the globe’s geopolitical hotspots and smooth transit across dozens of countries. However, the most important aspect is the ultimate destination of both the Belt and the Road for all of China’s products: the 500 million strong market of Europe. As such, China will find itself ultimately dependent upon the EU for its own internal stability.
Similarly, the EU might find many benefits in cooperating at least in part with China’s geopolitical objectives. The two powers share several key interests, including containing Russia (which BRI’s smooth operation would depend upon) and boosting development in Europe’s oft neglected eastern states. As the conflict between European federalism and nationalism has come to a head in recent years, arguably exacerbated by the vast differences in economic prosperity between Europe’s west and east, Europe has a vested interest in attenuating this disparity. BRI’s investments could serve this purpose if handled properly.
Balancing the imperative of continued economic development with the need to blunt the potentially insidious spread of Chinese influence will not be easy, however. As evidenced by its acquisition of the Greek port of Piraeus and provision of cheap credit to Zambia, China has few scruples about leveraging debt obligations to acquire strategic assets.[v] The potential for this financial extortion forms the foundation of the larger EU states’ concerns about China’s increasing penetration into Europe. Furthermore, there remains a risk that China’s involvement, even if unintentional, might further distance the western and eastern EU states and contribute to a dissolution of the union. China’s suppression of Uighurs in Xinjiang and disappearing of the President of Interpol have likely also given Europe pause regarding any further cooperation.[vi]
Thus, Europe’s best strategy for dealing with BRI is to leverage its own significant negotiating strengths, given China’s reliance on the single market, to achieve concessions that would bring China’s behavior more in line with European norms. This would not only mean ensuring that no individual EU country becomes unduly susceptible to Chinese debt extortion but also that China adheres to the international legal norms that Europe values. If such a deal can be struck, both China and Europe might ultimately prosper from BRI. However, if no such treaty can be agreed upon, both may find themselves beset by issues of internal instability which are unlikely to abate.
[i] “Italy Aims to Be China’s First G7 Partner on Belt and Road,” South China Morning Post, September 22, 2018, https://www.scmp.com/news/china/diplomacy/article/2165292/italy-aims-be-chinas-first-g7-partner-belt-road.
[ii] Philippe Le Corre and Jonathan D. Pollack, “China’s Global Rise: Can the EU and U.S. Pursue a Coordinated Strategy?,” Brookings (blog), October 31, 2016, https://www.brookings.edu/research/chinas-global-rise-can-the-eu-and-u-s-pursue-a-coordinated-strategy/.
[iii] Eric Fish, “Has China Discovered a Better Political System Than Democracy?,” The Atlantic, October 28, 2015, https://www.theatlantic.com/international/archive/2015/10/china-politics-communism-democracy/412663/.
[iv] Jagganath Panda, “What the Inclusion of BRI in the Chinese Constitution Implies | Institute for Defence Studies and Analyses,” accessed December 10, 2017, https://idsa.in/idsacomments/what-the-inclusion-of-bri-in-the-chinese-constitution-implies_jpanda_071117.
[v] “Zambia’s Looming Debt Crisis Is a Warning for the Rest of Africa,” The Economist, September 15, 2018, https://www.economist.com/leaders/2018/09/15/zambias-looming-debt-crisis-is-a-warning-for-the-rest-of-africa.
[vi] “Opinion | China Disappeared Interpol’s Chief. The World Can’t Pretend It’s Business as Usual.,” Washington Post, accessed October 11, 2018, https://www.washingtonpost.com/opinions/china-disappeared-interpols-chief-the-world-cant-pretend-its-business-as-usual/2018/10/09/835bf628-cbf6-11e8-a3e6-44daa3d35ede_story.html.