EU envoys slam China's Belt and Road initiative, says it will hit free trade

Ambassadors of 27 of the 28 European Union countries in Beijing have compiled a report slamming China’s Belt and Road Initiative (BRI), claiming it would adversely impact free trade and put Chinese companies at an unfair advantage.

The report, which has come out at a time when Prime Minister Narendra Modi is in Europe, promoting India as a growing partner for the continent, says the BRI “runs counter to the EU agenda for liberalising trade and pushes the balance of power in favour of subsidised Chinese companies”. The report is part of the EU’s preparations for an EU-China summit in July.

The European Commission is working on a strategy paper to forge a common EU position on BRI, which will run through 65 countries in six economic corridors. In May last year, at the maiden BRI summit in Beijing, the EU had refused to sign BRI trade document with China. Ambassador of Hungary, whose government is a beneficiary of BRI, was not party to the report.


EU officials said while Europe should not refuse to cooperate with China, it should state its terms. There has been rising concern in Europe over BRI, in line with India’s position on the project.

India recently reiterated its position on BRI and said that the socalled China-Pakistan Economic Corridor violated India’s sovereignty and territorial integrity. “No country can accept a project that ignores its core concerns on sovereignty and territorial integrity,” an external affairs ministry spokesperson said.

“Connectivity initiatives must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality, and must be pursued in a manner that respects sovereignty and territorial integrity.” EU is not in favour of Chinese firms getting preferential treatment. The project, EU officials said, must take into account interests of all participants.

“China’s ‘One Belt, One Road’ will be the new World Trade Organisation – whether we like it or not,” Siemens CEO Joe Kaeser, told World Economic Forum in January.

In their report, the EU ambassadors wrote that China wanted to shape globalisation to suit its own interests.

“At the same time the initiative is pursuing domestic political goals like reduction of surplus capacity, creation of new export markets and safeguarding access to raw materials,” the report said. The report warned that European companies might not get good contracts if China was not compelled to the European principles of transparency in public procurement, as well as environmental and social standards.

EU officials said China was trying to divide Europe, akin to its policy in Southeast Asia.