EU officials confirmed that the bloc is not considering joining China’s Belt and Road initiative on Friday (26 April), contrary to what German Economic minister Peter Altmaier has previously said.
Speaking on the sidelines of the BRI summit hosted by Chinese President Xi Jinping, Altmaier said that the European Economic Area wants to sign a memorandum of understanding with China as a bloc and not as individual states.
But EU officials told EURACTIV.com that “the EU position has not changed”. The bloc decided not to become a member when the massive plan was presented more than five years ago. Member states are free to join individually, as nearly half of them have already done.
But the same official added that all member states are bound by EU rules and European legislation.
The BRI summit came against the backdrop of cancellations and postponements of various projects by participating countries, and a general unease with China’s handling of its one-trillion-dollar initiative.
President Xi told his guests, including 37 heads of state, that he would improve the transparency and debt analysis of countries receiving financial support.
Open up economy
At the same time, he promised to continue progressing on opening up the economy and abolishing subsidies, as the EU and the US have demanded.
China and the US are close to sealing a deal aimed at resolving a trade dispute that has included damaging tariffs on $360 billion worth of goods.
Next week, US Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin will travel to Beijing on April 30 for a new round of negotiations.
President Donald Trump on Thursday said Xi would soon be coming to the US to seal the trade deal, without providing a date for the long expected visit.
Xi has previously vowed to lower tariffs, increase imports, uphold intellectual property rights and lift barriers for foreign companies to access the Chinese market. But at the summit, he fell short of providing any details for the implementation.
“We will overhaul and abolish unjustified regulations, subsidies and practises that impede fair competition and distort the market,” Xi said.
China’s pledges not only to open up its economy but also to review the terms of its landmark infrastructure building project came against mounting pressure by participating countries, European nations and international organisations.
The IMF managing director, Christine Lagarde, said on Friday that the program to build ports, railroads and other trade-enhancing infrastructure across the world was having a positive impact on growth in certain countries, but needed to be managed carefully.
‘Belt and Road’ 2.0
She called for a revamped “Belt and Road 2.0” to include increased transparency, an open procurement process with competitive bidding and better risk assessment in project selection.
“History has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt,” Lagarde said.
“I have said before that, to be fully successful, the Belt and Road should only go where it is needed. I would add today that it should only go where it is sustainable, in all aspects.”
Lagarde’s comments followed the Chinese authorities’ announcement to improve the assessment of the debt sustainability of the countries.
Since Xi launched Belt and Road in 2013, China has invested $90 billion in projects while banks have provided upwards of $300 billion in loans.
Over the next decade, the new Silk Road, seen as a tool to increase China’s clout overseas, is expected to mobilize around one trillion dollars in infrastructure.
China’s foreign minister said last week that 126 countries and 29 international organisations have signed cooperation agreements with Beijing on the Belt and Road.
Last month, Italy became the first G7 country to sign up, despite US criticism and suspicion about it among some EU countries, wary of China’s attempts to divide the EU.
EU member states participating in the BRI include Hungary, Poland, Bulgaria, Greece, Portugal or Italy.
Some countries had suspended or postponed projects, including Pakistan, Malaysia and Sierra Leona.