"Will EU Block China Economic Silk Road?"

From the blog of F. William Engdahl 26 April 2018:

In the clearest sign to date, EU Ambassadors to Beijing have just released a document critical of China’s vast Belt, Road Initiative or New Economic Silk Road infrastructure project. All EU ambassadors excepting Hungary signed off on the paper in a declaration of growing EU opposition to what is arguably the most promising economic project in the past century if not more. The move fits conveniently with the recent Trump Administration targeting of China technology trade as tensions grow .

Twenty-seven of the 28 EU ambassadors to China have just signed a report sharply critical of China’s BRI development. Ironically, as if the EU states or their companies did not do the same, the report attacks China for using the BRI to hamper free trade and put Chinese companies at an advantage. The document claims that the Chinese New Economic Silk Road project, unveiled by Xi Jinping in 2013, “runs counter to the EU agenda for liberalizing trade and pushes the balance of power in favor of subsidized Chinese companies.”

Two Models of Global Development

Chinese President Xi Jinping first proposed what today is the Belt, Road Initiative, today the most ambitious infrastructure project in modern history, at a university in Kazakhstan five years ago in 2013. Despite repeated efforts by Beijing to enlist the European Union as a whole and individual EU member states, the majority to date have remained cool or distant with the exception of Hungary, Greece and several eastern EU countries. When China officially launched the project and held an international conference in Beijing in May 2017, it was largely boycotted by EU heads of state. Germany’s Merkel sent her economics minister who accused the Chinese of lack of commitments to social and environmental sustainability and transparency in procurement.

Now 27 of 28 EU ambassadors in Beijing have signed a statement suspiciously similar to that of the German position. According to the German business daily, Handelsblatt, the EU ambassadors’ declaration states that the China BRI “runs counter to the EU agenda for liberalizing trade and pushes the balance of power in favor of subsidized Chinese companies.” Hungary was the only country refusing to sign.
The latest EU statement, soon to be followed by a long critical report on the new Silk Road from the EU Commission in Brussels, fits very much the agenda of the Trump Administration in its latest trade tariffs against Chinese goods that alleges that Chinese companies force US partners to share technology in return for projects in China.

Moreover, the EU Commission has just released a long report on China in connection with new EU anti-dumping rules. The report declares that the fact that China is a state-directed economy with state-owned enterprises engaging in the construction of the Belt Road Initiative is in effect “the problem.” China answers that her economy is in the “primary stage of socialism”, has a “socialist market economy” and views the state-owned economy as the “leading force” of national development. The targeting of China’s state enterprises and of its state-directed economic model is a direct attack on her very economic model. Beijing is not about to scrap that we can be sure.

The latest stance of EU member states, led by Germany and Macron’s France, is an attempt to pressure China into adhering to the 2013 World Bank document, China 2030. There, as we noted in an earlier analysis, it declared that China must complete radical market reforms, to follow the failed Western “free market” model implemented in the West since the 1970’s with disastrous consequences for employment and stability. China 2030 states, “It is imperative that China … develop a market-based system with sound foundations…while a vigorous private sector plays the more important role of driving growth.” The report, cosigned then by the Chinese Finance Ministry and State Council, further declared that “China’s strategy toward the world will need to be governed by a few key principles: open markets, fairness and equity, mutually beneficial cooperation, global inclusiveness and sustainable development.”... 

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