The EU’s Global Gateway Strategy and Its Impact on the Belt and Road Initiative
In December 2021, the EU announced the Global Gateway, its strategic document for international infrastructure development and investment. The Global Gateway Strategy (GGS) integrates a vast collection of resources for development aid, and stands for the EUs systematic solution to global connectivity. The GGS will mobilize up to 300 billion euros by 2027 for investment in key infrastructure projects in Eastern Europe, Africa, the Middle East and ASEAN countries, as well as other so-called alike-minded，, partners of the EU? It aims to reshape the EUs unfavorable position in economic and geopolitical areas by strengthening external connectivity amid complex changes in the international and regional situation. Despite all constraints in its implementation, the strategy still has potential impacts on Chinas Belt and Road Initiative (BRI) and deserves further study.
Key Elements of the Global Gateway
In the GGS document, the EU proposes six principles including democratic values and high standards, good governance and transparency, equal partnerships, green and clean, a focus on security, and catalyzing private sector investment, as well as five key areas of partnerships including digital sector, climate and energy, transport, health, and education and research. With a focus on international economic cooperation, the GGS has a more detailed cooperation plan than previous European connectivity proposals.
Accelerating transport infrastructure connectivity
The GGS will promote worldwide infrastructure investments that create sustainable, smart, resilient, inclusive and safe networks in all modes of transport, including rail, road, ports, airport, as well as logistics and border-crossing points, in a multimodal system to build on Europes position as the worlds transportation hub. Based on the eastern expansion of the Trans-European Transport Networks (TEN-T), an additional 4.6 billion euros will be invested in the Trans-Mediterranean Network of Transport (TMN-T) to connect the two strategic corridors of Sub-Saharan Africa and Central Asia, and promote European infrastructure standards along these routes. These infrastructure investments will shape an efficient and interconnected transport network, and facilitate the flow and diversification of supply chains between the EU and partner countries.
Promoting green transition in partner countries
Against the backdrop of global green development, countries are eager to plan and propose their carbon neutral targets and green development plans. The EU started earlier in green development and has first-mover advantages in green standards, rules, industry, technology and market? It sees infrastructure investment as an approach to turn sustainable development goals into competitive advantages. The EU claims that it will promote green transition in partner countries under the GGS framework, but in fact it wants to extend its own green advantages and build bundling interests with partner countries. The GGS, with its environmentally friendly and carbon-neutral principles, focuses on infrastructure projects that are clean, climate-resilient and zero-emissions-compliant, to accelerate sustainable development and inclusive growth in partner countries and promote the green and circular economic transformation. Specific paths include: first, supporting the energy transition of partner countries and diversifying the EUs clean energy supply; second, supporting regional energy integration and promoting energy efficiency, renewable energy (including smart grids) and a “just transition” of energy sources; third, working with partner countries that have the potential to develop their renewable hydrogen production, and promoting the creation of competitive markets to enable hydrogen produced outside the EU to be traded internationally without export restrictions or price distortions. In particular, the EU will mobilize 2.4 billion euros for Sub-Saharan Africa and 1.08 billion euros for North Africa to support the green transition of local value chains, the development and integration of regional energy markets, and the implementation of a strong continental Africa Single Electricity Market.
Encouraging the construction of digital economic corridors
Digital economy represents new infrastructure connectivity. The GGS promotes an open and secure internet, and works with partner countries on digital infrastructure such as submarine and terrestrial fiber optic cables, space-based secure communication systems as well as cloud services, which together provide a basis for exchange of data as well as cooperation in high performance computing, artificial intelligence, and earth observation. The GGS will prioritize underserved regions, countries and populations, with the aim of tackling the global digital divide. The EU toolbox for the cybersecurity of 5G networks will guide investments in digital infrastructure to support network resilience and interoperability, and an open, plural and secure internet. An additional 15 million euros will be used to extend the BELLA program, a digital highway which includes a submarine cable between the EU and Latin America and a terrestrial backbone between South American countries. The EU will also minimize the environmental footprint of digital infrastructure, by promoting green data centers and deploying underwater cables equipped with ocean monitoring sensors in developing countries.
Focusing on education and public health
In response to major challenges posed by the COVID-19 pandemic, the EU will be working with partner countries to diversify their pharmaceutical supply chains and develop local manufacturing and distribution capacities to address international supply chain bottlenecks. The EUs Health and Emergency Preparedness and Response Authority (HERA) will work with the GGS to reinforce global public health surveillance, facilitate international cooperation for medical countermeasures in case of a health emergency, and support low- and middle-income countries to build expertise. Education is critical for any society and for its long-term economic success. The EU will invest in quality education, including digital education, with a lifelong learning perspective, and paying particular attention to the inclusion of girls, women and other vulnerable groups. The GGS will work with the Erasmus+ program with total funding of 2.2 billion euros to reinforce the European offer of mobility and cooperation in education, training, youth and sport around the world. The EU will work with partner countries to strengthen cooperation on research and innovation based on the Horizon Europe program and multilateral research & innovation partnerships, which offer the possibility to bring together researchers anywhere in the world who share fundamental values.
Motives of the Global Gateway
Due to the combined impacts of the COVID-19 pandemic and the Ukraine crisis, the security and economic order in Europe is undergoing serious shocks, with its chronic weaknesses in governance further exposed, the integration process even more imbalanced, and its economic power on continuous decline. The intensifying great-power competition and the return of geopolitics have given rise to strategic anxiety in Europe and highlighted the urgency of transformation. To reshape geo-economic and geopolitical influence, the EU launched the GGS. While continuing the “hard power” framework in previous connectivity plans, the EU also stresses the “soft power” in exporting ideology, rules and standards, and democratic values. It tries to tackle the continuous decline of its economic status and the dilemma of its economic transition in the post-pandemic era on the one hand, and gain geopolitical benefits by exerting presence in global hotspots on the other.
Addressing the EU’s declining economic status
The EU, with its significant share in global economy, has long regarded free trade as its foundation and boasted of being the defender of multilateralism and an active participant in economic globalization. However, along with the rise of developing countries, especially China, the EUs status in the world economy has shown a continuous decline, which is manifested in its decreasing share in global GDP and in international trade and investment. According to statistics of the United Nations Conference on Trade and Development Organization (UNCTAD), the global shares of EU and US GDP were 28.07% and 28.74% respectively in 2000, while the global share of Chinas GDP was only 5.76%. But as of 2019 the global shares of EU, US and Chinas GDP were 21.22%, 23.86% and 17.02% respectively; The global share of the EUs total export value fell from 38.02% in 2000 to 33.10% in 2019, a decline of 4.92 percentage points in 20 years. This compares to a decline of only 3.48% in the United States and a 9.28% increase in China. The global share of the EUs outward foreign direct investment (OFDI) also fell by 11.97 percentage points from a high of 48.34% in 2008 to 36.37% in 2019, while the US and China experienced a 2.42 and a 4.89 percentage points increase respectively over the same period-
Moreover, the negative effects of economic globalization are increasingly obvious within the EU. Especially in recent years, economic globalization, technological iteration, and the reshaping of global value chains have brought serious shocks to the European economy and society, which are reflected in its over-reliance on external markets, loss of industrial competitive advantages and increased inequality. The inadequate response of EU institutions and its member states to these negative effects has led to a further rise in de-globalization and isolationism? As a supernational actor with a highly integrated economy, the EU always sees foreign trade and economic relations as an effective tool to show its strength. But with its declining weight in the world economy and the rise of anti-globalization sentiments internally, the EU s geo-economic anxiety has risen. It needs connectivity plans to maintain economic and trade ties with developing economies and rebuild its economic influence.
Overcoming economic transformation difficulties in the postpandemic era
With the rise of new global growth models represented by digital and green economy, the EU has focused on digital and green transformation to create the key areas for its economic competitiveness and facilitate its economic recovery, but the challenges are also unprecedented? In the digital economy, technological change and digitalization are giving rise to new business and production models, bringing profound changes in economic structures and labor markets. The COVID-19 pandemic has in part shown Europes shortcomings in the digitalization of public administration, health care and education systems. Despite its advantages in digital technologies, the EU lacks the ideal framework for digital services and business models, and is further constrained by its highly fragmented digital market and a serious shortage of digital talent, making it difficult to foster a digital economy. The monopoly of international tech giants in Europes digital markets has also led to long-term concerns about digital sovereignty; Although the EU started early in green economy with advanced technologies and advantageous industries, its transition to a low-carbon and climate-neutral economy is still difficult because of the lack of public investment, innovation and incentives, coupled with the huge difference in policies among member states, and the failure of energy transition and industrial upgrading dedicated to reducing greenhouse gas emissions?0 Since the Ukraine crisis, the EUs several rounds of economic sanctions against Russia have worsened its energy crisis. In response to short energy supply and inflation pressures, EU member states have reduced or even lifted restrictions on fossil energy consumption, risking a reversal of the green transition.
Facing the pressure of both digital and green transformation, the EU urgently needs to create a geo-economic asafe zone.” To shift focus on its internal problems and to achieve scale effects, the EU sees developing countries and regions as large markets and a testing ground for digital and green transformation. It hopes to help EU enterprises, especially those in green energy and digital technologies, seize emerging markets such as Africa, the Middle East, ASEAN and Latin America through the GGS, which will in turn feed the EUs digital and green transition. At the same time, host countries of the GGS will become important export destinations for EU-related industrial products and technologies, opening up overseas markets and profit margins for EU companies.
Enriching value-based business partners
The GGS focuses on soft power based on exporting ideology, rules and standards, and democratic values to the world. It tries to maintain economic and trade relations with like-minded partner countries to reshape the EUs geo-economic influence. The EU claims that it offers “ethical” investments, which means adhering to the rule of law, upholding high standards of human, social, and workers’ rights and respecting norms from international rules and standards for intellectual property. Moreover, the cooperation must be based on what the EU calls “good governance and transparency;^ It will need open access to public investment, a level playing field for potential investors and a clear set of agreed deliverables to ensure that Global Gateway projects say what they will deliver—and deliver what they promise. The EU will conduct public consultation in recipient countries to ensure transparency, civil participation, as well as affordable and equal access to services especially for vulnerable groups. In addition, the EU requires accountability, affordable costs, and financial sustainability to avoid debt distress or unnecessary dependencies. At the same time, the EU emphasizes equal partnerships and security-focused cooperation. Under the GGS, projects will be designed, developed and implemented in close cooperation and consultation with partner countries, and be based on the countries5 economic and social needs. The planning of projects will also consider the capacity of host countries to manage and maintain the infrastructure in a sustainable way after it has been completed. Moreover, the projects will provide “trusted” infrastructure to ensure that citizens and institutions are shielded from unwarranted surveillance and better prepared in the face of natural or man-made challenges, physical, cyber or hybrid threats, and economic coercion for geopolitical aims.
Shaping geopolitical influence
As globalization and regionalization develop in parallel with an extensive application of information technology across the society, geopolitical competition is shifting from the struggle for territory to that for connectivity, including global supply chains, energy markets, finance, technology and talent flows. Particularly, infrastructure connectivity based on highways, railroads and the internet has transcended political borders and become the basic paradigm of global development. It can easily overcome political and geographical barriers, promote the global flow of economic factors, realize the efficient allocation of resources, and facilitate the formation of regional cooperation networks while making countries along the routes prosper. All this will bring a wider range of geopolitical benefits to the dominant power in play. In recent years, the EUs geopolitical anxiety has been on the rise due to the complexity and diversity of the challenges it encounters. To address the pressure from China and the US and avoid the fate of being marginalized by the two great powers, the EU has accelerated the pace of a political Europe with strategic autonomy, committed to building a “united, resilient and sovereign Europe.” Compared to the continuous investment by Chinas BRI and Americas Build Back Better World (B3W) initiative in global hotspots, the EU and its member states have had much lower involvement in Africa, the Middle East, Central Asia and the Indo-Pacific, which has undermined its geopolitical influence in these regions. Given this, by advancing its global connectivity projects, the EU hopes to reconstruct its economic and trade ties with developing countries and regions, and maintain its engagement in hotspot issues to shape a global strategic influence that corresponds with its geopolitical ambitions.
The GGS seeks to use the EUs economic power to bundle infrastructure projects with European democratic values, and export concepts, rules and standards to partner countries in a way that achieves economic and geopolitical benefits?0 In February 2022, the EU organized the EU-Africa Summit and the first Indo-Pacific Forum, both of which put the GGS as the core topic to strengthen ties with the Indo-Pacific region and Africa under the EU paradigm, and reflect the EUs political aspirations?1 In addition, the EUs connectivity projects aim to shape a stable geopolitical environment. In fact, the instability of its neighborhood has made Europe increasingly perplexed by the influx of refugees mainly from Africa, the Middle East and Eastern Europe as well as rising terrorist activities that are bred therein. The EU intends to limit refuge and migration to the greatest extent through more economic cooperation, and eliminate the soil for extremism with local economic development. In particular, the Middle East has become a source of threats to Europes security and stability since the Arab Spring, Peace and security in the Middle East, including the Gulf region, has become a priority of the EUs foreign policy; In a May 2022 communication ‘”Strategic Partnership with the Gulp which was presented to the European Parliament and the European Council, the European Commission and the European High Representative for Foreign Affairs and Security Policy jointly proposed to deepen EU cooperation with the Gulf Cooperation Council (GCC) and its member states and upgrade their partnership to a strategic one. The document encourages the EU and the Gulf countries to expand cooperation under the GGS framework, especially in areas such as anti-terrorism, anti-extremism, justice and law enforcement. By so doing, the EU attempts to maintain security in its wider neighborhood and also expand its geopolitical influence in regional hotspot issues.
Constraints of the Global Gateway
Compared with previous connectivity plans, the GGS is characterized by geopolitical pursuits, public investment and diplomatic promotion. Despite a clear financing plan, the GGS has not yet started any project. Amid the COVID-19 pandemic and the Ukraine crisis, nor is it certain that the EU will fully deliver on its funding commitment. With prominent constraints, the GGS may only reaffirm the impression that the EU only pays lip service in its foreign cooperation.
Grim macroeconomic fundamentals
Stable macroeconomic growth is a prerequisite for outbound infrastructure investment. Since 2020, the EU has been under serious economic downward pressure due to the pandemic and the Ukraine crisis. Although the 5.3% economic growth in 2021 shows signs of recovery, the recurrence of the pandemic in Europe and the escalation of the Ukraine crisis have dragged the EU economy further down. Constraints such as a delay in the resumption of production, supply chain disruptions, and high energy prices, will remain in the short term. And the grim macroeconomic fundamentals will adversely influence the implementation of GGS projects?3 The EU economy has been seriously affected by the Ukraine crisis. With several rounds of EU economic sanctions against Russia, Europe is facing a serious shortage of energy supply, with energy prices at an all-time high. The shortage of raw materials, coupled with the blockage in logistics, have increased the risk of supply chain disruptions in the manufacturing sector, while the widening supply gap in food and agricultural materials has threatened food security. Amid the concurrent energy, supply chain, and food crises, the EU is facing a combined risk of inflation and recession. Should the Ukraine crisis become protracted, the EU economy may slip into a cycle of high inflation and low growth. The European Central Bank (ECB) has significantly raised its inflation forecast for 2022 from 3.2% to 5.1%, while the United Nations Conference on Trade and Development (UNCTAD) predicts that the economic growth rates of the EU and the eurozone will decline significantly in 2022 from the previous 3.3% and 3.4% to 1.6% and 1.7% respectively. Among EU countries, the growth rates of Germany and France will fall from the previous 3.2% and 3.4% to 1.4% and 2.4%?4 Germany, long considered the leader of the EU economy, saw zero growth in the second quarter of 2022 compared with the previous quarter?5 In this context, EU member states are busy with their own problems including economic recession, fiscal déficit, and sovereign debt risk, and it remains to be seen whether they will spare efforts to participate in foreign infrastructure construction.
Unclear funding implementation
The GGS plans to raise 300 billion euros from 2021 to 2027 but it mostly relies on European financial and development institutions. It is unclear whether the scale of investment can meet the expectation due to the lack of financing channels, implementation plans, and details about payment and using methods. During the pandemic, EU member states heavily relied on fiscal stimulus to bail out their economies, with fiscal deficits and public debt ratios in some countries hitting record highs, which left little room for official funds for the GGS. Meanwhile, Next Generation EU, which plans to provide 750 billion euros in common bonds by the end of 2026 to support post-pandemic recovery and economic transition in member states, will also crowd out GGS funding channels. With a large financial gap for domestic economic transformation and infrastructure upgrade, it is even more difficult to implement, let alone expand, overseas projects. While the EU emphasizes the huge demand for strategic funding and the importance of private investment, international capital has been increasingly risk-aversive because of the ongoing crisis in Ukraine, the mounting risks of global economy, and the move to increase interest rates and reduce the balance sheet by the US Federal Reserve and the ECB. As developed economies are short of liquidity, the scale of international investment has shrunk accordingly. With international investors becoming more conservative, it is increasingly difficult for the GGS to attract financial input globally.
In particular, the Ukraine crisis has increased the pressure on building energy infrastructure within the EU, which will effectively divert the funds originally allocated for external projects. The EU is poor in fossil resources, with its external dependence on natural gas, crude oil and coal at 90%, 97% and 70% respectively. In particular, 45% of its natural gas, 27% of its crude oil and 46% of its coal used to be imported from Russia, Continuous economic sanctions against Russia have embroiled the EU in an energy crisis. With soaring electricity costs and oil and gas prices, total energy consumption in Europe is expected to triple year-on-year in 2022. To get rid of energy dependence on Russia, the EU has proposed the REPowerEU plan to increase imports of liquefied natural gas (LNG) and pipeline gas while accelerating the transition to renewable energy?8 But it also means that the EU faces a large gap in constructing energy infrastructure such as oil and gas pipelines, LNG ports, wind turbines and photovoltaic power plants, which will further squeeze funding for external connectivity projects.
Reluctance of partner countries and division within the EU
To implement the UN 2030 Agenda for Sustainable Development and promote democratic values, the EU is approaching like-minded countries such as the US, Canada, Japan, South Korea and India, seeking to integrate the GGS with existing connectivity initiatives such as the B3% the EU-Japan and EU-India Connectivity Partnerships, the EU Economic and Investment Plan for the Western Balkans, the EU Eastern Partnership, and the cooperation program with its southern neighborhood, in terms of policy coordination, parallel project development and joint financing* Through various cooperation mechanisms, the EU intends to expand its economic and trade partnerships, and extend its connectivity network to Africa, the Western Balkans, the Middle East, the Indo-Pacific, and other regions where developing economies are concentrated. However, this may pose two major challenges to the partner countries concerned. First, due to long-time European colonial rule in the past, these developing countries and regions may be reluctant to accept what the EU promotes as ”democratic values,” especially at a time when all states value sovereignty and independence. The European-style confrontational and zero-sum mindset is also unlikely to be recognized and welcomed. Second, compared with previous connectivity plans, the GGS puts excessive emphasis on issues like new energy, ecological transformation and digital transition, which are detached from local pursuits of development and cooperation and may not be practical for countries with a weak industrial base. Without adequate global competitiveness in these areas, the EU may also be easily outcompeted by those countries with more comparative advantages. Moreover, as the EU did in previous projects with developing countries, the GGS unilaterally sets high standards and insists on good governance and high transparency, which will definitely add to difficulties in public support and local acceptance. Strict regulation and timeconsuming compliance for data security and climate change response have also made it difficult and costly for small- and medium-sized enterprises, especially those in digital and environmental sectors, to implement the GGS projects.
In addition, the EU governance system does not match its strategic ambitions, and member states have varied political stances on the GGS.
With the advance of European integration, more differences have been witnessed among the economic development paths of member states, especially the development concepts and levels between Northern and Southern Europe as well as between Eastern and Western Europe. As a result, the EU can hardly build a consensus on how the GGS will be implemented?1 Germany and the Netherlands are cautious when articulating their positions on the GGS, while countries in Central and Eastern Europe and the Baltic have shown little interest. Countries with financial troubles in Southern Europe, such as Italy, Portugal and Malta, have also made some complaints on the specifics of the initiative. In addition, the complexity and time-consuming decision-making mechanism of EU institutions have added more uncertainties to the implementation of the GGS.
Impacts on the Belt and Road Initiative
Since the introduction of the BRI, China has been upholding the principle of “extensive consultation, joint contribution and shared benefits” to conduct win-win cooperation. Europe, as an important global market where developed countries are concentrated, has always been an important direction of Belt and Road construction. But with the advance of the BRI in Europe and changes in the international landscape, the EU has come to have a mixed attitude toward the Chinese initiative. In fact, there is no lack of content in the GGS that positions China as an implicit target. Given that the GGS has been described by Western media as a “true alternative^ to the BRI,32 让、impacts on the BRI are highly likely and deserve our further study.
Setting exclusive conditions and high-standard barriers for the BRI
The EU has long been ambivalent toward the Belt and Road Initiative, especially in 2019 when Italy signed a BRI Memorandum of Understanding and Greece joined the cooperation between China and Central and Eastern European countries (CEEC). Some argue that the BRI has a growing impact on the EU, and especially with the China-CEEC cooperation, related projects may import Chinese rules and development models and thus threaten European security, standards and rules?3 Moreover, the BRI has become more influential in Africa and the Western Balkans, and the increase of local infrastructure projects under its auspices is undermining the EUs economic interests and social influence in these regions. In view of this, early when the GGS was first proposed, Bruegel, a Brussels-based European think tank, had explicitly pointed out that it was a response to Chinas BRI. 35
By highlighting so-called values and high standards in its implementation plan, the GGS is frequently insinuating that the BRI is underperforming in these aspects. On the one hand, the GGS emphasizes ”democratic values” in infrastructure construction and investment, with a clear focus on maintaining security and resisting economic coercion for geopolitical purposes, while avoiding corruption and so-called “debt traps” through higher transparency as well as fairer and more favorable financing conditions. On the other hand, the GGS focuses on the deployment of digital networks, green economy, smart transportation, and other areas without established standards, attempting to build safer infrastructure with the high standards it promotes, and introduce EU concepts and rules to the digital and green “vacuum” in developing countries and regions?7
With its emphasis on values and rules, and its ideologically-driven exclusive political conditions and high standard requirements, the GGS may undermine the competitiveness of the BRI. In specific areas, the EU advocates the awareness of protecting personal data, privacy and cybersecurity in its infrastructure investment. In the name of building an equal and open digital market, the EU is introducing its Toolbox for 5G Security and the General Data Protection Regulation (GDPR) to promote safe data flows, which effectively rejects the Chinese standards represented by the BRI. In addition, by setting up high technological, industrial and even ideological barriers in the area of green development, the EU has launched a head-to-head competition with the green Belt and Road construction. The EU-promoted rules and standards would help exclude Chinese enterprises, squeeze Chinas local market share, and enhance the participation and competitiveness of EU enterprises in global green cooperation.
In terms of cooperation partners, the GGS has identified Africa, ASEAN and Latin America, where developing economies are concentrated, as its priority directions. It aims to compete for the leadership in the digital transformation of these potential transition countries and the power to formulate standards for green infrastructure. By signing air transport agreements, the EU and ASEAN have improved the connectivity of their industrial chains which creates conditions for future EU infrastructure projects in ASEAN countries. In comparison, Chinas Belt and Road cooperation in ASEAN and African countries is still at the primary stage based on specific projects, with early harvests yet to translate into institutional advantages. In this sense, the GGS will pose greater challenges to the BRI in the medium and long term. If the six principles of the GGS are recognized as standards for global infrastructure development, the compliance costs and policy risks of Belt and Road projects are bound to rise significantly, and Chinese companies will encounter more difficulties when bidding for overseas infrastructure projects. Meanwhile, labels implicitly put by the GGS and the B3W initiative of the US on Chinese-funded projects, such as “‘geopolitical expansion” and “debt traps： will negatively impact the BRIs global image and international appeal.
Crowding out overseas financing resources from the BRI
The GGS has partly drawn on the BRI s experience in adopting different channels of funding to compete for a bigger share in the global financing market. The EUs previous connectivity plans, such as Elements for an EU Strategy on Connecting Europe and Asia (2018) and A Globally Connected Europe (2021), are mostly statements with vague policies, scattered measures and weak operability These plans are in sharp contrast to the BRI featuring concentrated effort. Given this, the GGS vows to bring together financial resources of EU institutions and member states at all levels based on Team Europe initiatives. With the full use of all these resources at the EUs disposal, the EUs budget for third-party financing is set at an unprecedented 79 billion euros, representing 26% of the EU infrastructure investment. Through the European Fund for Sustainable Development (EFSD+), a guaranteed investment of up to 135 billion euros is planned for 2021-2027, leveraging a record 53.4 billion euros in private infrastructure investment* The European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and other financial institutions have planned investments of up to 145 billion euros. In addition, the EU has supplemented its financing with the Neighborhood, Development and International Cooperation Instrument (NDICI) under the 2021-2027 Multiannual Financial Framework, the Instrument for Pre-Accession Assistance (IPA), the InvestEU program and the Horizon Europe program. This shows the EUs determination to compete with the BRI in the long term. Despite their relatively declining economic power, the EU and the US still hold much sway on the international financial market. With their implementation, the GGS, the B3W and the G7s Partnership for Global Infrastructure and Investment (PGII) are expected to leverage huge amounts of international capital. To some extent, the prominent achievement of the BRI over the past decade has encouraged European and American financial capital to put aside their short-term disputes and jointly launch a blockade against Chinese capital. At the same time, media in Europe and the United States has advocated that developing countries should “race to the top not race to the bottom” and pursue high-standard infrastructure projects from the very beginning. This rhetoric has considerable influence in heavily indebted poor countries.
Diluting the BRI’s international influence
After years of efforts, the BRI has now enjoyed an obvious scale advantage and brand effect, with many key infrastructure projects in countries and regions along the routes having brought tangible benefits to local people. The BRIs vigorous development is in stark contrast to the EUs continuous retreat in foreign cooperation, which has to some extent threatened its traditional influence in Africa, the Western Balkans and other regions. In 2019, the EU revised its China policy in a high-profile manner, identifying China simultaneously as a negotiating partner, an economic competitor and a systemic rival. The GGS highlights the China image of “systematic rival” and reflects the EUs strategic intention to gain an advantage in the institutional competition with China. By stressing ideologically driven issues like democracy, human rights and labor protection, the EU tries to build an exclusive connectivity network which serves its own geo-economic interests and thus reduces the BRIs international influence.
The GGS intends to coordinate with the infrastructure plans of other developed economies to jointly provide a connectivity plan based on free markets and constitute an alternative to the BRI. The United States5 Build Back Better World initiative won positive responses from the European Union and leaders of Germany, France and Italy soon after it was put forward by the Biden administration. The Connecting Europe Facility, unveiled by the EU in July 2021, specifically mentioned its coordination with the B3W At the summit in July 2022, the G7 officially launched the PGII, which will raise US$600 billion over the next five years for infrastructure projects in developing countries with weak infrastructure and inadequate investment for construction. The PGII aims to become a global economic development program that integrates financial support, pillar industries, flagship projects, and implementation mechanisms. Stemming from the GGS and the B3W the PGII has a clear intention of curbing the global reach of Chinas BRI.
The EU targets potential markets in developing countries and regions, sets up business advisory groups and holds regular forums to actively promote connectivity with Africa and ASEAN countries. It expands political interaction with partner countries by creating small groups and tries to discourage them from cooperating with China. In February 2022, during the French presidency of the European Union, EU member states and dozens of representatives from Indo-Pacific countries and regional organizations were invited to the first Ministerial Forum for Cooperation in the Indo-Pacific. The GGS was the topic at the first roundtable discussion of the event, which demonstrated the EUs attempt to increase its geopolitical presence in the Indo-Pacific region. According to the Bruegel think tank, the synergy of the GGS and the US Indo-Pacific strategy as well as its B3W initiative can threaten Belt and Road cooperation and the BRIs international influence. The EU can also demonstrate its geopolitical influence by interfering in Chinas neighborhood security and transforming from an outsider to an active party of the South China Sea issue and Indo-Pacific affairs.
Conclusion
With post-pandemic recovery and a rising demand for economic transition across the world, global infrastructure construction is expected to usher in a new round of rapid development, which expands the space for global connectivity cooperation. With the Global Gateway Strategy, the EU aims to increase its economic and trade ties with developing countries and regions through connectivity projects, but its vigilant and suppressive stance toward Chinas Belt and Road Initiative in relevant countries, which outweighs its limited coordination and cooperation with the BRI, means that the GGS can hardly align with the BRI in the short term. However, the absence of direct mention of China in the GGS shows that the EU does not want to publicly identify China as a rival and remains willing to cooperate with China on projects in third-party markets. China should adhere to the principle of openness and inclusiveness, actively deepen its economic partnerships with developing countries and regions, and handle its relationship with the GGS with both competitive and cooperative mindsets. On the one hand, China should work on the compliance of BRI projects with local regulations, ensure consistency with international rules in the bidding, procurement, construction and operation of Chinese enterprises, and encourage Chinese companies to improve transparency of their projects. At the same time, China should assume more social responsibility and implement more “small yet smart” projects that cost less but bear fruit rapidly and benefit peoples livelihoods, so as to win local support. On the other hand, China should continue to deepen its cooperation with international organizations and the European Union in building the Belt and Road. China should advance policy coordination with the EU and countries such as France, Germany and Italy, and explore the feasibility of third-party market cooperation between Chinese enterprises and GGS projects based on the existing third-party market cooperation mechanism between China and the EU, in an effort to build a model of their connectivity cooperation.