The European Union seeks to confront the Chinese Silk Road project, this was revealed by an official document from Brussels, which announces 70 economic and logistical projects for this purpose. These projects come within the framework of the plan agreed upon during the previous G7 meeting.
On June 26, the leaders of the Group of Seven met in the German castle of Elmau, and after hours of discussions, they concluded a declaration of confrontation against Chinese economic expansion projects in the world, on top of which is the "Belt and Road" initiative, which Europe looks at with caution.
In this regard, and according to a White House statement, the group decided to "raise $600 billion by 2027 for investments in global infrastructure," of which Washington will provide "during the next five years $200 billion through grants and resources from the federal government and private sector investment."
The money, which will be invested in creating sustainable infrastructure that "improves the lives of people around the world, enhances and diversifies our supply chains, creates new opportunities for American workers and companies, and supports our national security," according to the statement. While this partnership will also provide a structure for the G7 countries to unify their resources to finance emerging economies in order to stop Chinese economic expansion within them.
On the part of the European Union, the head of its commissioners, Ursula von der Leyen, said that Europe, in turn, will provide about 300 billion euros over the next five years, to finance infrastructure in developing countries to face the "new Silk Road". This was revealed in the Federation's "Global Gate" programme, at the beginning of the week, which lists 70 projects for this purpose.
"Global Gate"
On the other hand, the first announcement of the "Global Gate" project dates back to late 2021, with goals aimed at increasing investments that promote democratic values, governance, transparency and equal partnerships, as well as green, clean and safe infrastructure that stimulates private sector investments.
In this regard, the High Representative of the European Foreign Ministry, Josep Borrell, explained that this project "will help build communities of common interest and enhance the resilience of our supply chains," and through it, "we reaffirm our vision of strengthening the network of (international) relations, which must be based on to internationally accepted standards, rules and regulations, in order to provide a level playing field (between peoples).”
The document, which was recently published by the federation, reveals the nature of these projects, which number 70. And according to the American " Politico ", quoting a senior official in Brussels, as saying, "Now we have to work," referring to passing from the planning stage to implementation.
These projects include helping a number of African countries achieve the energy transition, including Benin and South Africa , which will receive financing for the construction of solar power plants, the value of which may exceed 367 million euros for Cape Town. The union also plans to partner with Namibia in the field of green hydrogen production.
According to the American site, the European Union has many projects planned in China's backyard, such as a partnership on energy transition with Indonesia, and a digital connectivity project in the Philippines.
The "Global Gate" also includes projects in countries orbiting Russia, most of which were within the former Soviet Union, such as a green hydrogen project in Kazakhstan, a transportation link in Central Asia, two projects in Mongolia and a hydroelectric power station in Tajikistan.
What is the Chinese "Silk Road" project?
In 2013, China unveiled two new foreign trade strategies: the "Silk Road Economic Belt" and the "Maritime Silk Road". Through them, Beijing aims to connect the Chinese market with more than 70 countries around the world, through a land belt of railways and roads through Central Asia and Russia, and a sea line to connect China with Europe and Africa.
According to a previous World Bank study, if the Belt and Road Initiative is fully implemented, transport projects under the initiative could lead to an increase in trade by between 1.7% and 6.2% globally, and an increase in real income globally by 0.7% to 2.9%. . The real income of the economies along the EITI corridors could also increase by two to four times if reforms were implemented to reduce border delays and ease trade restrictions.
With all these benefits identified by the study, many criticisms are being pursued by China's economic policies in Africa, especially with regard to the debt packages it offers to the continent's low-income countries.
According to the statistics of the World Bank on Global Debt, China's debts to low- and middle-income countries amounted to 170 billion dollars at the end of 2020, about 75 billion of which were granted to sub-Saharan African countries. This makes China one of the most creditor countries in the world.
These debts, a large part of which passes secretly, that is, it is not through the Chinese government and its debtor counterpart, burden the poor countries in preparation for the acquisition of their capabilities and political dominance over them. For 40 of the low- and middle-income countries that have borrowed from China, the loan represents 10% of their GDP. For Djibouti and Zambia, the Chinese debt represents 20% of their GDP.
On the other hand, China tends to lend at high interest rates, which may reach four times the interest rates of a loan from the World Bank or a country like Germany. China also requires a maximum repayment period of 10 years, which is short compared to other loans that allow a repayment period of 28 years.