«There Is No Consensus on China in Europe Right Now»

The EU tries to move from inactivity to a more coordinated stance towards the Belt and Road Initiative 

Europe

Founder and Director of the Centre for Russia Europe Asia Studies, Theresa Fallon, talks about Europe's division when it comes to the Belt and Road Initiative and how China skillfully deepened that divide even further. 

Nico Luchsinger: We are five years into the Belt and Road Initiative. Judging by the goals behind it – do you think it should qualify as a success so far?

Theresa Fallon: I think so, yes. For China, anything that increases trade is a good thing – and in the immediate neighbourhood of China, it has clearly done that. But in recent times, the pushback has been growing: The response from the US is a lot stronger now. And in some countries, BRI projects have become victims of changes in domestic politics – for example in Malaysia, where the new administration under Prime Minister Mahathir has been highly critical of projects agreed upon under his predecessor Najib Razak.

And there is even increasing pushback from within China: I spoke to several Chinese academics at a recent conference and was surprised to hear how critical they were of the initiative, especially about the high levels of debt the BRI creates in some countries.

Meanwhile, the European response has been very mixed – with Eastern and Southeastern Europe much more open to BRI and Chinese investment than the other countries. Why is that?

There is no consensus on China in Europe right now. That division is not China’s fault, but they have certainly helped accentuate it with initiatives like the 16 + 1, a dialogue with a group of Eastern European countries, some of which are EU members. The strange thing is that investment from the EU in some of these countries, for example in Serbia, is much higher than investment from China. But no one is talking about that – the EU is very bad at marketing! So the narrative that these countries take Chinese investments because they do not have any alternatives is plainly wrong – there is lots of funding available from the EU! But countries like Hungary like to use Chinese projects as a way of signalling to Brussels that they are not dependent on EU money.

The EU recently published a «connectivity strategy». Was that a response to the BRI?

Well, the EU of course says it is not a response, and that the EU has been active in all these countries for decades. But it is at least an indirect response. 

For the last years, Europe seemed a bit asleep at the switch; it is only now starting to acknowledge the geopolitical implications of BRI and Chinese investments. Thinking geopolitically also means you will eventually have to choose sides – and the Europeans are reluctant to do that. They rather try to position themselves as «bridge builders».

While the EU may be sceptical about BRI, European businesses still seem very enthusiastic about it though, right?

I think that is starting to change. The Bund der Industrie (German Association of Manufacturing) recently issued a report that was very critical of China. When you consider how important the Chinese market is for the German car industry, that is a remarkable thing to happen. It is a sign for me that China is losing the support of European businesses as well.


©Theresa Fallon

Theresa Fallon is the founder and director of the Centre for Russia Europe Asia Studies in Brussels. She is concurrently a member of the Council for Security Cooperation in the Asia-Pacific and a nonresident senior fellow of the Chicago Council on Global Affairs. Current research is focused on EU-Asia relations, Sino-Russian relations, maritime security, global governance, and China’s Belt & Road Initiative. She has testified to the European Parliament Committee on Foreign Affairs and Subcommittee on Security and Defense. Previously she was a member of the Strategic Advisors Group for the NATO Supreme Allied Commander Europe (SACEUR) and lived and worked in both Russia and China. She was educated at the University of Chicago, Loyola University and The London School of Economics.

Nico Luchsinger is Co-Executive Director of Asia Society Switzerland.

 

This interview is part of Asia Society Switzerland's interview series on China's «Belt and Road Initiative». Find all the interviews and other content about the BRI here.