African Reserves Loans

BRI and the EU’s Global Gateway Strategy | By Dr Mehmood Ul Hassan Khan

BRI and the EU’s Global Gateway Strategy

The FEUDS of the international economy have now taken on a new form of engagement in which the international politics of power will play an important role. It seems that in the new global arena, everyone has their own Silk Road.

Almost a decade after Chinese President Xi Jiping proposed a “New Silk Road”, the EU followed Beijing’s lead in launching an ambitious infrastructure investment program. The Global Gateway Strategy (GGS), a € 300 billion infrastructure spending plan, aims to boost EU supply chains and trade around the world.

It is a European response to the Belt and Road Initiative (BRI) which provides loans for transport and digital infrastructure projects in nearly 70 countries, which also expands the economic sphere of influence of the China.

Brussels hopes to make a difference in the nature of the funding. The EU projects which, in the BRI’s funding structures, come mainly from loans, while the European program will rely on investments from the public and private sectors.

The EU presents its global gateway strategy as transparent and more favorable, in particular for developing countries.

Critics of the BIS claim that the Chinese loans are a way to create economic dependence on Beijing among recipient countries, which is absolutely false.

The EU’s propaganda persists with its long media campaign against China, the BIS and the CPEC and has called it anti-development and a debt trap for so many years.

Sadly, the continued weakness of the EU’s economic indicators, shrinking financial resources and the rise of far-right political parties have transformed the entire continent into vulnerable shores that are now even more divided, polarized and economically marginalized. .

Whereas, despite the COVID-19 pandemic, China’s macroeconomy has recovered and entered the economic comfort zone, with positive, productive and prosperous future prospects.

The new variant of the Omicron coronavirus has further weakened the chances of economic recovery for the EU and the world.

On the other hand, according to the latest report (December 2021), 142 countries have now signed memoranda of understanding with China to join the BRI, showing its unstoppable economic relevance and productivity potential to achieve greater prosperity. socio-economic, regional connectivity, poverty eradication and the creation of new jobs in participating countries.

Despite the economic crisis, Brussels also insists on funding “based on values ​​such as transparency, respect for the law and local working conditions.

Its media, researchers and think tanks accuse China of containing secret clauses that always give it an advantage over the borrowing country.

But the BIS’s critical analysis reveals that Chinese loans are still inclusive, open, transparent, streamlined and straightforward.

China believes in shared prosperity and thus avoids elements of undue secrecy while dealing with participating countries.

The EU is claiming its recently announced GGS as a more modern version of the BRI, with a focus on investments in forward-looking and environmentally friendly projects in the digital, healthcare, renewable energies and others.

The EU projects that it is GGS much more of the 21st century than the Chinese BRI, which has mainly built roads and railways or renovated bridges and ports.

It seems that the EU GGS does not have enough financial resources, economic stimulus and even political compatibilities to match the Chinese BRI which has evolved since its inception.

Now he has become Green BRI. In the course of its appropriate economic proposals and commitments, Beijing has mainly invested in the infrastructure of transport products.

But in recent years, the New Silk Road has adapted to Xi Jinping’s new priorities in terms of renewable energies or digital networks and new technologies. In addition, the EU’s fund allocations are not as large as China’s, with Beijing poised to spend up to $ 1 trillion on its BRI. It seems that Europe is presenting its GGS program very late.

Chinese President Xi launched the New Silk Road in 2013, the Chinese initiative has become an ideal platform for economic transformation and greater regional connectivity with full financial resources. Europe has yet to demonstrate that it can do the same just as quickly.

But the EU assumes that late entry into the EU is not a serious handicap. The EU’s constant propaganda against the BIS has created some doubts but has not yet deteriorated its image over time due to its own endless wishlists, unreal economic interpretations, unrealistic statistical correlations and finally and above all, from financial presentations that simply succeeded in spreading the controversies and calling it a debt trap and other terms attached to Chinese loans.

However, the inclusion of new countries in the BRI across the world mitigates its false and fabricated propaganda.

Within this framework, 34 countries of the BRI now belong to Europe and Central Asia, including 18 countries of the European Union (EU).

One of the most important tests of the effectiveness of the European GGS program in countering Chinese economic influence will be in Africa, which is expected to be one of the main beneficiaries of these investments. However, the European Commission does not mention the African market as a priority objective.

It is a harsh reality that the arrival of Chinese financing in Africa has harmed European companies the most, which have often lost market share.

According to the most recent data (December 2021), 42 countries in sub-Saharan Africa and 17 countries in the Middle East and North Africa have already joined BRI, showing its economic penetration, financial confidence and political commitment to the African continent which has been severely looted. , exploited and ignored by so-called white supremacists in the EU.

Europe is not alone in wanting to overshadow the Chinese BRI. The United States also announced its own initiative, “Build Back Better World” (B3W), at the G7 summit in June 2021.

“With the arrival of Joe Biden at the White House, there has been a new dynamic for better transatlantic cooperation to counter China. So, real politics has eclipsed real economics in the realms of power politics.

Despite Western propaganda, the BIS is a new champion of globalization by the Chinese government to reconstruct the ancient Silk Road in contemporary fashion in a vast area by enhancing China’s economic integration with Asia, the Europe and Africa.

The aim of the BRI is to improve regional connectivity and expand socio-economic integration, especially in the countries involved in the BRI.

Therefore, the inflow of foreign currency through international activities will lead to monetary expansion in the regional as well as global economy and therefore benefit all participating countries of the BIS.

He hopes that the expansion of the BIS will increase the official reserves of central banks, thus allowing more credit lending in the market. As a result, the boom in financial activities will enhance economic growth.

To conclude, the announcement of the EU-sponsored Global Gateway Strategy (GGS) and the US ‘Build Back Better World’ (B3W) initiative against the Chinese BIS will further divide the world into a futile financial ghost race in which The economic wonders promised by the BIS could be replaced by the political witches of the EU and the United States in the days to come.

Thus, the containment policy of West China should be abandoned in the wider interests of humanity, prosperity, sovereignty and last but not least economic sustainability.