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#BeltAndRoadInitiative - Time for some European realpolitik

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“The BRI comes closest to a plan to help mitigate existential threats to the developed world,” Sir Douglas Flint said at a recent talk hosted by British think tank Asia House. The UK’s Special Envoy to the BRI emphasized that this includes “climate change, population growth, and economic inequality”, writes Oliver Stelling.

Today, a few weeks later, he might have added another threat: pandemics. With the terms of its future relationship with the European Union (EU) up in the air, Britain will say what it must to attract Chinese investment but the point is well made. The New Silk Roads between China, Asia, Africa and Europe are not just about movement of goods.

They also offer communication lines, stronger people-to-people bonds, academic exchange and closer cooperation in research, including food security, climate change and public health.  For sceptics this just validates their concerns. An initiative that uses a catchall phrase to reassign hundreds of existing and new projects under this scheme is hard to pin down or be held accountable, causing unease about the CCP’s true geopolitical intentions and growing control of transportation and logistics routes.

President Xi acknowledged deficits in openness, fair tendering and commitment to financial and environmental sustainability at the 2nd Belt and Road Forum (BRF) in April 2019. He specifically pledged the pursuit of more highquality development and debt sustainability, abiding by national and international laws and regulations on open, transparent and non-discriminatory public procurement procedures, and more efforts to combat corruption.

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Some commentators called this a ‘rebranding’, suggesting it’s all about optics. But this is not just propaganda. Too much is at stake for an economy that was already slowing before the coronavirus outbreak. As Sir Douglas put it at Asia House: “China, I believe, recognizes that gaining international financial support for BRI is dependent upon confidence around the integrities, sustainability and economic validation of individual projects.”

Public discourse about Belt and Road has evidently turned into a tale of two worldviews, dividing stakeholders along geographic and ideological lines. However, a prolonged impasse is not a foregone conclusion.

In Bridges to Everywhere - Connectivity as Paradigm, Parag Khanna makes the argument for connectivity as a word-historical idea like liberty or capitalism. China is placing Belt and Road in that same realm, portraying the BRI as eponymous with connectivity and in line with its stated vision of building a community with a shared future for mankind.

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That also correlates with thoughts by renowned Chinese scholar Zhang Weiwei (quoted by Parag Khanna): “Historical models of order have been built on spheres of influence, but a stable global society today must be based on co-creation across civilizations. Such a balanced system is what […] Zhang Weiwei describes as asymmetrical rather than hierarchical. It is one in which maintaining stability requires self-restraint and mutual trust among diverse powers.”

Part of this is a call for the West to show respect and accept China’s rise. Chinese intellectuals have long insisted that the past 200 years were an anomaly and that China only reclaims its rightful place on the world stage. While no power is entitled to its status based on historical merits, China’s phenomenal rise over the last forty years certainly deserves respect. China is now a key global actor and no longer a developing country. But it is still lagging behind in global discourse power. Belt and Road was supposed to change that and it still might.

If connectivity is right up there with liberty or capitalism then it sure won’t go away anytime soon. Belt and Road is its proxy and failure not an option. Given the escalating tensions with the US and the fact that most belts and roads end in Europe, the EU has a role to play in the reset of the BRI.

Europe should reassess its stance and seek an active role in shaping Belt and Road 2.0. Unlike Trump’s isolationist ‘America First’ agenda, Prof. Zhang’s idea of co-creation, self restraint and mutual trust looks instantly compatible with deep-rooted European values. Europeans also favor a more measured response to China’s rise and hold greater sway in persuading Beijing to uphold the rules-based international order and continue opening its system.

The question is how committed would China be to those principles if put to the test?

A reality-check:

Co-creation

In the years following Xi’s announcement the BRI was seen as ambitious and visionary but also loosely defined and ever expanding. China addressed that lack of a cohesive policy by creating more than a hundred think tanks dedicated to the study of Belt and Road. Beijing also invited global academics, commentators and policy-makers to fill “the amorphous construct” of the BRI with content. This is where the idea of co-creation takes root.

At national level, the concept is firmly embedded in the daily administration of the BRI, which has no formal institutionalized body but one overseeing authority that operates under the National Development and Reform Commission (NDRC). A number of governmental agencies and ministries are in charge of guiding, coordinating and implementing all work and almost all provinces in China have their own BRI implementation plans.

Belt and Road is not about absolute control but guidance and shared responsibilities. And contrary to popular belief modern China has a highly adaptive and consultative mode of governance that allows for flexibility that could be extended to co-creation “across civilizations”.

The EU already acknowledged that the bloc must adapt to the changing economic realities when dealing with China. Both have entered a strategic partnership called the ‘EU-China 2020 Strategic Agenda for Co-operation’, an open and dynamic framework for dialogue and collaboration in line with the progression of EU-China relations. This provides a platform for the review of all Belt and Road challenges and opportunities.

Co-creation of the BRI would have to be based on clearly defined interests and principles and a commitment to a more inclusive Belt and Road that meets EU standards. Whatever risks remain should be outweighed by the advantages, not least the collaboration on joint initiatives on public health.

Self-restraint

China’s shift to more assertiveness has been a matter of debate for years. Since Beijing managed to contain the virus its self-confidence has surged again, with some official statements raising more than a few eyebrows around the globe. The US is not holding back either. The insults and provocations hurled at China by the President Trump and his Secretary of State Pompeo lack civility and seriously undermine the US’ global standing.

Europe, the US and China must work together to defeat the virus and the EU is best placed to take the lead in bringing all parties together. For China this is of particular importance as the ongoing tit-for-tat could further erode international support for its flagship initiative. Belt and Road cannot afford that. Those who stuck with China so far tend to take a more long term view of the BRI and remain convinced that the fundamentals have not changed, that Belt and Road is the engine of regional integration, people-to-people connectivity and a facilitator of economic opportunity for millions along the New Silk Roads. It might even hold the keys to resolving humanity’s shared challenges.

Such patronage is highly valuable but shall never be taken for granted. It is therefore vital to tackle any perceived or real negative feelings head-on. “Support for the initiative will not come without first addressing negative sentiments”, Sir Douglas said at Asia House. That requires a little humility and self-restraint.

Former president and architect of modern China Deng Xiaoping foresaw the backlash. His advice for China was to lie low as it grows economically. “Hide your strength, bide your time, never take the lead”, Deng famously said. That rule still applies.

Mutual trust

Co-creation and self-restraint are trust-building measures in themselves but it takes more: the assurance of factbased, open and transparent communication. If Belt and Road is ever to get back on track, the first priority must be to remove all uncertainty about the origin of the coronavirus and the reasons behind the delayed initial response – full disclosure to get closure.

Next on the list: a verifiable approach to the pledged greater transparency around Belt and Road. This could also help remove the confirmation bias – a major obstacle to broader advocacy. When perceptions of those who seek out information and data are influenced by everything that confirms their pre-existing notions then China can’t win, even if it does the right thing. Take spending for instance.
The American Enterprise Institute (AEI) and Heritage Chinese Global Investment Tracker put total spending on the BRI at roughly $340 billion during 2014–2017.

According to Bloomberg spending was slightly less, “just $337 billion” or one third of $1 trillion, the most common estimate of total infrastructure investment, in the period until November 2019. The “just $337 billion” may be factually correct but insinuates something else: the BRI is failing. To recap, this is about a staggering $337bn spent to date. Compare that with the US.

More than three years after winning the election on his promise to remake America, the US president’s infrastructure plan is still on halt. Trump’s latest push lacks revenue sources for almost half the assigned $1 trillion amount – roughly $450 billion proposed for roads, bridges, public transit and much more. Even US Republicans are unconvinced it will ever pass Congress. But no one argues the infrastructure plan is a failure per se. Such sentiment is reserved for Belt and Road and its architect China.

In a multipolar world, cooperation on shared challenges is the only sensible path forward. Although not perfect, the BRI might just be mankind’s best chance to get started and improve as relations evolve. Zhang Weiwei provided the academic foundation and Europeans are beginning to chart the political course along similar lines: “We face enormous challenges when dealing with China. That is why we need a China strategy. Ideally a Western, but at least a European one, which treats China as partners, competitors and rivals,”

Norbert Röttgen, chairman of the German Committee on Foreign Affairs, said at a recent speech before the Bundestag.
The resemblance is striking. Co-creation is the product of collaboration in the spirit of true partnership. Self restraint is the favored conduct among competitors who pursue common goals. Both are within instant reach. It’s only mutual trust that remains to be a real challenge between strategic rivals. This demands a commitment to hard work, tolerance, open dialogue and a measure of political pragmatism combined with the aforementioned commitment to fact-based, open and transparent communication.

The EU and China should see the opening in this crisis and re-engage on the greatest connectivity project ever envisioned. The time is now. As the Chinese saying goes: ‘The whole year must be planned for in the spring.’

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Competition: EU and China meet during 22nd Competition Week to discuss competition policy priorities

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Officials and experts from the EU and China will meet online from 29 November to 2 December 2021 to discuss about their co-operation on competition law and enforcement. The discussions will focus on the green transition and how China's Fair Competition Review System and the EU's State Aid framework can contribute to it. Participants will also discuss mechanisms to control potentially anti-competitive acquisitions in the digital sector and the practical challenges of investigating digital markets. In addition, there will be updates on the proposed revisions to China's Anti-Monopoly Law and recent regulatory and competition policy developments in the EU.

The 22nd EU-China Competition Week follows the longstanding tradition of biannual competition dialogue between the EU and the anti-monopoly enforcement agencies in China. It is part of the Competition Co-operation project, a five-year EU funded programme offering technical co-operation to competition authorities in Asia. It also provides a platform for exchanges on competition policy between the European Commission Directorate-General for Competition (DG Competition) and the Chinese State Administration for Market Regulation (SAMR). The objective is to exchange experiences and strengthen convergence in competition policy, to the benefit of citizens and businesses in both the EU and in Asia. More information about the European Commission's bilateral dialogue with China in the field of competition policy is available on the Commission's website.

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US invites Taiwan to its democracy summit - China angered

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The Biden administration has invited Taiwan to its "Summit for Democracy" next month, according to a list of participants published on Tuesday, a move that infuriated China, which views the democratically governed island as its territory, write Ben Blanchard in Taipei and Yew Lun Tian in Beijing and Humeyra Pamuk.

The first-of-its-kind gathering is a test of President Joe Biden's assertion, announced in his first foreign policy address in office in February, that he would return the United States to global leadership to face down authoritarian forces led by China and Russia.

There are 110 participants on the State Department's invitation list for the virtual event on 9 and 10 December, which aims to help stop democratic backsliding and the erosion of rights and freedoms worldwide. The list does not include China or Russia. Read more.

Taiwan's Foreign Ministry said the government would be represented by Digital Minister Audrey Tang and Hsiao Bi-khim, Taiwan's de facto ambassador in Washington.

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"Our country's invitation to participate in the 'Summit for Democracy' is an affirmation of Taiwan's efforts to promote the values of democracy and human rights over the years," the ministry added.

China's Foreign Ministry said it was "firmly opposed" to the invite.

"U.S. actions only go to show democracy is just a cover and a tool for it to advance its geopolitical objectives, oppress other countries, divide the world and serve its own interests," ministry spokesman Zhao Lijian told reporters in Beijing.

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The invite for Taiwan comes as China has stepped up pressure on countries to downgrade or sever relations with the island, which is considered by Beijing to have no right to the trappings of a state. Read more.

Self-governed Taiwan says Beijing has no right to speak for it.

Sharp differences over Taiwan persisted during a virtual meeting earlier this month between Biden and Chinese President Xi Jinping.

While Biden reiterated long-standing US support for the 'One China' policy under which it officially recognizes Beijing rather than Taipei, he also said he "strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait," the White House said.

Xi said that those in Taiwan who seek independence, and their supporters in the United States, were "playing with fire", according to state news agency Xinhua.

Rights groups question if Biden's Summit for Democracy can push those world leaders who are invited, some accused of harboring authoritarian tendencies, to take meaningful action.

The State Department list shows the event will bring together mature democracies such as France and Sweden but also countries such as the Philippines, India and Poland, where activists say democracy is under threat.

In Asia, some US allies such as Japan and South Korea were invited, while others like Thailand and Vietnam were not. Other notable absentees were US allies Egypt and NATO member Turkey. Representation from the Middle East will be slim, with Israel and Iraq the only two countries invited.

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Xi tells south-east Asian leaders China does not seek 'hegemony'

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Chinese President Xi Jinping (pictured) told leaders of the 10-country Association of Southeast Asian Nations (ASEAN) at a summit on Monday (22 November) that Beijing would not "bully" its smaller regional neighbours, amid rising tension over the South China Sea, write Gabriel Crossley, Rozanna Latiff and Martin Petty, Reuters.

Beijing's territorial claims over the sea clash with those of several Southeast Asian nations and have raised alarm from Washington to Tokyo.

But Xi said China would never seek hegemony nor take advantage of its size to coerce smaller countries, and would work with ASEAN to eliminate "interference".

"China was, is, and will always be a good neighbour, good friend, and good partner of ASEAN," Chinse state media quoted Xi as saying.

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China’s assertion of sovereignty over the South China Sea has set it against ASEAN members Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to parts.

The Philippines on Thursday (18 November) condemned the actions of three Chinese coast guard vessels that it said blocked and used water cannon on resupply boats headed towards a Philippine-occupied atoll in the sea.

The United States on Friday called the Chinese actions "dangerous, provocative, and unjustified", and warned that an armed attack on Philippine vessels would invoke U.S. mutual defence commitments.

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Philippine President Rodrigo Duterte told the summit hosted by Xi that he "abhors" the altercation and said the rule of law was the only way out of the dispute. He referred to a 2016 international arbitration ruling which found China's maritime claim to the sea had no legal basis.

"This does not speak well of the relations between our nations," said Duterte, who will leave office next year and has been criticised in the past for failing to condemn China's conduct in the disputed waters.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Xi told the summit that China and ASEAN had "cast off the gloom of the Cold War" - when the region was wracked by superpower competition and conflicts such as the Vietnam War - and had jointly maintained regional stability.

China frequently criticises the United States for "Cold War thinking" when Washington engages its regional allies to push back against Beijing's growing military and economic influence.

U.S. President Joe Biden joined ASEAN leaders for a virtual summit in October and pledged greater engagement with the region.

The summit was held without a representative from Myanmar, Malaysia's Foreign Minister Saifuddin Abdullah said on Monday. The reason for the non-attendance was not immediately clear, and a spokesperson for Myanmar's military government did not answer calls seeking comment.

ASEAN sidelined Myanmar junta leader Min Aung Hlaing, who has led a bloody crackdown on dissent since seizing power on 1 February, from virtual summits last month over his failure to make inroads in implementing an agreed peace plan, in an unprecedented exclusion for the bloc.

Myanmar refused to send junior representation and blamed ASEAN for departing from its non-interference principle and caving to Western pressure.

China lobbied for Min to attend the summit, according to diplomatic sources.

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