As doubts grow over China’s vast Belt and Road Initiative, the EU is launching an alternative plan for Asia that it says will not saddle countries with debt they cannot repay.
EU member countries are expected to sign off on the new “Asia connectivity strategy” — which aims to improve transport, digital and energy links, while promoting environmental and labor standards — in time for a major summit of European and Asian leaders next month.
Brussels insists the scheme is not a response to any other player, but its launch comes as the sheen fades on Beijing’s “new Silk Road” initiative, which envisions railways, roads and ports being built across the globe using billions of dollars in Chinese loans.
Talks have been going on for several months with a number of Asian countries that were “interested in looking at the European way,” EU High Representative for Foreign Affairs and Security Policy Federica Mogherini said.
“Our initiative will aim at creating jobs and economic growth and benefits for the local communities,” she said. “I would not say if this is different from other’s proposal, but this is our proposal.”
The new strategy comes after European Commission President Jean-Claude Juncker called for a more muscular EU foreign policy to match the bloc’s economic clout, taking on not just US President Donald Trump’s “America First” approach, but also China’s energetic involvement in Africa and Asia.
The initiative was a “very important step” after criticism of the EU in some quarters that it has been slow to respond to Chinese soft power plays, said Maaike Okano-Heijmans, an EU-Asia relations expert at the Clingendael Institute in the Netherlands.
“We cannot accuse them of not having a vision any more. The challenge is how to turn this into something that’s really an alternative to some countries, because that requires money and more money and more money,” Okano-Heijmans said. “Nobody can rival Chinese money.”
Chinese President Xi Jinping (習近平) earlier this month said that China’s trade with Belt and Road countries had exceeded US$5 trillion, with outward direct investment surpassing US$60 billion.
However, some countries are beginning to question whether the strings attached to the money make it more of a burden than a benefit.
While much of the hard detail of the EU scheme — including the vital question of finance — is yet to be worked out, the proposal stresses the importance of “high environmental and social standards” and of the “fiscal and financial sustainability of infrastructure projects.”
This appears designed to directly address a major criticism of the Belt and Road Initiative, launched in 2013, that the apparent Chinese largesse is effectively creating debt traps.
These fears were highlighted last year when Sri Lanka had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the US$1.4 billion project.
Concerns have grown and last month Malaysia said it was shelving three Beijing-backed projects, including a US$20 billion railway, while Pakistan — until recently an enthusiastic recipient of Chinese money — has vowed more transparency amid fears about the country’s ability to repay loans.
As cybersecurity becomes an increasingly important consideration for governments around the world, the EU’s insistence on transparency might prove more appealing than involvement in China’s “digital Silk Road,” said Philippe le Corre, senior fellow in the Europe and Asia programs at the Carnegie Endowment for International Peace.
“It’s basically allowing Chinese telecoms companies to build infrastructures in these countries, gifting access to portals and e-commerce platforms, anything digital,” Le Corre said. “You’re basically having a Chinese footprint on a very long term and you’re not leaving an alternative.”
Some countries are beginning to realize, Le Corre said, that “it’s not good to put all your eggs in the same basket and that being a dependent of the Chinese empire is a big risk, certainly when it comes to controlling information and controlling technology.”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to post a 25 percent year-on-year increase in sales in the first quarter of this year to US$12.91 billion, up from US$10.31 billion a year earlier, as its production is at full capacity, market advisory firm TrendForce Corp said in a note last week. The increase would help TSMC cement its leadership in the industry by taking a 56 percent market share in the global pure wafer foundry business, TrendForce said. Its forecast was in line with TSMC’s estimate in January, which pointed to a range of US$12.7 billion to US$13 billion for the
MULTI-USE: The arrangement of seats in future vehicles would be different, allowing passengers to do everything they do at home, the CEO of the firm’s EV platform said Electric vehicles (EVs) developed on a Hon Hai Precision Industry Co (鴻海精密) platform would be built like “a smartphone on a different platform,” Jack Cheng (鄭顯聰), chief executive officer of the Hon Hai-initiated MIH Open Platform Alliance, said on Saturday. It would be the ultimate goal to make vehicles built on the platform an extension of the driver’s home, he said during an online presentation. The alliance aims to provide resources to automakers and boost Taiwan’s EV development, with a vision to make an EV its owner’s “second home,” Cheng said. “Whatever they can do in their home, they will be able
RARE POSITION: IHS Markit expects exports to increase by about 13 percent this year, as demand for electronics worldwide has recovered significantly since last year Taiwan’s economy might expand 4.1 percent this year, accelerating from a 3.11 percent pickup last year, as its exports would continue to benefit from surging demand for electronics products amid and after the COVID-19 pandemic, global research body IHS Markit said yesterday. Taiwan has been one of the world’s most resilient economies during the pandemic-triggered recession last year. Economic indicators at the beginning of this year signal improving growth momentum for its economy over the coming months, as the global economy and trade rebounds, the US-British information provider said. According to the latest IHS Markit survey of business confidence in Taiwan, the
Clean energy use and reduction of carbon dioxide emissions are the common consciousness of all countries in the world. Among them, the introduction of renewable energy storage systems and the promotion of electric vehicles are the unanimous implementation of governments and enterprises around the world. The most critical strategic component is the lithium ion battery. Whoever has a higher energy density, lower cost, and higher safety lithium battery will control the development trend of this wave of safer lithium battery technology. All-solid-state batteries are a goal that everyone is striving to pursue. However, the stable and large scale production of solid-state