While the EU Frets about Chinese Investment in Infrastructure, the US Quietly Rearms it
Op/Ed by Chris Devonshire-Ellis
Italy’s upcoming intention to sign an a MoU with China concerning the Belt and Road Initiative has certainly got the anti-China factions within the EU and elsewhere wound up; Brussels, Washington and other Senior Diplomats have all warned of dire consequences. Mutterings have been made about “checking the small print”. (We have, and you can too. See a draft MoU here.)
Much of the criticism seems to stem from somewhat unspecified concerns about Chinese ownership and management of assets held in the EU. Nothing is apparently written down in specifics, but vague references allude to the Chinese, should they have control, effectively being able to shut down port and other operations. These fears also spill over into the current problems experienced by Huawei – unspecified concerns that the software could contain back door trojans that could shut down nuclear power plants, rail networks and communications centers. In reality, I suspect its more about who retains the primary advantage in the next generation of operational software – the United States, China, or Russia.
The EU’s position on Chinese investment has seen it impose conditions on investments China has been making in infrastructure elsewhere within the EU; a situation has caused breaches of trust and accusations of breaches of sovereignty from nations, such as Hungary, and Croatia, among others. Indeed, the very fact that China has instigated a “16+1” grouping of Eastern European countries and itself is a reminder that in a sense, frustration with Brussels over infrastructure development has seen such a body arise separate from its influence.
Research into why Chinese contractors are winning so many EU infrastructure projects shows that they are often better prepared, more experienced, and cost effective. I wrote about this in the articles China’s Trade Intelligence Gathering Leaving EU Contractors Disadvantaged and How Chinese Contractors Are Winning EU Infrastructure Projects. In short, much of Brussels dislike of China’s Belt and Road is because Chinese contractors are more efficient than EU ones; yet, they have to explain to their electorate, which includes large contractors, why EU taxpayers money is going out of the EU to the Chinese. That’s an uncomfortable scenario, especially with EU elections due this May.
On the other hand, EU taxpayers money is also being sent to the US, and for rather more serious matters than building roads and bridges and ports. Yet, the media remains quiet about this. The latest development sees Washington (not Warsaw or Brussels) award a US$249 million contract to an American weapons manufacturer to assist with siting missiles in Poland.
There are two issues with this: one being why the contract couldn’t have been awarded to EU firms? And if they don’t possess the capability, why? If sending money to China to build bridges and ports is such an issue, why isn’t EU money being spent on US missile systems also not being questioned? It is not an even match to criticize one and not the other.
Of course, the perceived threat by Russia towards the EU is a different and serious question, and not one to debate in this article, other than to question if the Russian threat is as real as the US says it is. It makes sense to talk it up when as a result, US weapons manufacturers are raking in huge contracts, paid for by the EU.
But the point remains: why is the EU silent about sending millions of dollars to US contractors for weapons systems when at the same time it raises a storm over sending millions of dollars to Chinese contractors to build infrastructure? When phrased in those terms, and stripped out of the background noise over security issues and so on, it does appear the Chinese are being painted with a negative end of the brush. And on a larger question – why aren’t EU weapons systems and infrastructure contractors more competitive? Because on that note, both the Chinese and the Americans are taking advantage, and that doesn’t bode well for future European industrial development. Evolving into a bloc hooked purely upon consumerism, on an industrial scale will not end well.
In spite of the fact that I’m British and we have Brexit looming, I am not anti-European. However, when spending EU taxpayers money it is apparently OK to send to the US for weapons systems without question, while on the other Chinese money for infrastructure investment is held up in red tape. It is time to ask questions as to why one passes through so easily and not the other. It is time for EU politicians to stand up and start asking questions about this disparity and the honesty of an increasing weaponization of Europe’s border with Russia. That’s about not being anti-EU. It’s about being seen to be taking control and not just sending money to the Americans every time they suggest a threat is imminent. Otherwise, the game just keeps on being played for higher and higher stakes as Russia will take reciprocal measures. It was Europe who invaded Russia, not the other way around, and some history reading may be of use to the next generation of MEPs. Meanwhile, does Europe really have to keep on beating up the Chinese Belt and Road, when a new tranch of weaponization is quietly taking place in the EU at the same time?
Silk Road Briefing is produced by Dezan Shira & Associates. Chris Devonshire-Ellis is the practice Chairman. The firm has 26 years of China operations with offices throughout China, Asia and Europe. Please refer to our Belt & Road desk or visit our website at www.dezshira.com for further information.