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Will the EU’s Global Gateway Undermine the BRI?

Mar 04, 2022

The European Union will invest about 300 billion euros (340 billion USD) on infrastructure to finance the Global Gateway, a new EU initiative to compete with Beijing’s BRI. Although the project aims to simply offer an alternative that could also compliment the BRI, its timing and focus could very well undermine Chinese investment since the erosion of EU-China relations. 

The entire globe requires massive infrastructure investment, and this is the primary topic of public discourse in Europe, the U.S., in Asia, and in Africa. For example, a 2017 Asian Development Bank report estimated that Asian infrastructure will need $22 trillion to $26 trillion through 2030. In reality, the BRI only gained traction in Europe because there was an inherent need for significant investment in infrastructure and the productive economy. From a geopolitical perspective, Beijing is aware that infrastructural interconnectivity is crucial to achieving global dominance. 

However, many different countries and regions have aimed to counteract the BRI. For example, Japan launched the Expanded Partnership for Quality Infrastructure (EPQI) in 2016, while India launched its own Security and Growth for All mission in 2020. Both of these sought to create alternatives to the BRI. Although they could never actually fully ‘counteract’ the BRI, they hoped to compliment Beijing’s investments and at least develop a stake in rapidly growing infrastructural investment. Washington’s most recent announcements about the Quadrilateral Security Dialogue (Quad) and the Build Back Better World (B3W) initiative led to $48 billion in regional investment by the Quad. The B3W initiative also prompted the UK to create the Clean Green Initiative to support sustainable infrastructure and green technology in European countries with a 3 billion pound investment for the next five years. 

In June 2021, the EU sought to establish visible projects across the globe with high impact. Just three months later Urusula von der Leyen introduced the Global Gateway as a connectivity strategy by building partnerships focused on quality investments and connections between goods, people, and services. The Global Gateway then formally launched in December 2021 upon the already established 2018 EU-Asia connectivity strategy and different partnerships with both Japan and India to mobilize 300 billion euros in investments between 2021 and 2027 in both hard and soft infrastructure. 

Keep in mind, the Global Gateway was announced as the Comprehensive Agreement on Investment (CAI) is still frozen by the European Parliament and has not yet been ratified. Therefore, the Global Gateway is an extension of the same worldview that caused European Union and Chinese relations to deteriorate. 

The BRI, totaling $8 trillion worth of investments throughout Asia, Africa, and Europe, is heavily involved in Central and Eastern Europe as well as in the Balkans. The Global Gateway aims to try and take some of the infrastructure stake from the BRI in these regions. However, can a largely divided Europe find a way to gather around a solid union-wide investment project? The Global Gateway hopes to tackle climate change, improving healthcare systems, boosting competitiveness, and securing global supply chains. Europe needs to unify and work with the rest of the world to prove that the Global Gateway can take Europe’s divided interests and create mutually beneficial projects that will connect the regions of the world. 

The inner workings of the Global Gateway hope to leverage resources from the EU, European institutions, development banks, and member states. These investments will help improve fiber-optic cables, transport corridors, and "clean-power transmission lines" that will offer "attractive investment and business-friendly trading conditions, regulatory convergence, [standardization], supply-chain integration, and financial services." 

China has already funneled hundreds of billions of dollars into foreign infrastructure, and now Europe is trying to do something similarly with a “values-based” plan that essentially serves as an alternative to the BRI. 

The BRI, as supported by President Xi, gained international support from organizations and over 150 countries, and many of them in the West. These projects financed and built ports, pipelines, and roads to include digital technology, health care, and green energy. Beijing supported investments in Hungary, including a university, while also boosting investments for a Belgrade-Budapest railway. 

However, opposing voices emerged as some viewed the BRI investments as unpredictable or questionable in terms of credit terms or environmental regulations. Therefore, western countries began to provide smaller alternatives. These missions, especially in Europe, focus on transparency, sustainability, and environmental issues. The Global Gateway would also likely target Africa and Asia for investment. Southeast Asia seems to be the primary concern as a place to counter China since Beijing has already provided about $740 billion worth (€653 billion) of BRI projects in Southeast Asia.  If the EU can provide high investment standards at affordable costs, it can succeed as critics have become more concerned with the BRI. Chinese investment through the BRI has also slowed down since 2017. 

However, out of the 11 Southeast Asia states, only Timor-Leste was classified as "free" in Freedom House's latest rankings on political freedom. This will heavily complicate Europe’s approach to investing in these regions since it aims to provide a ‘values-based’ alternative. This ‘democratic approach’ will likely deter these countries from applying for investment from Brussels. To make matters more complicated, China is already a frontrunner for green development, climate change, and ecology. This focus will modernize the BRI to become even more difficult for Europe to counteract with alternatives. The BRI, at least in theory, will continue to invest to alleviate poverty, increase employment, and improve education, and implement more economic and effective livelihood projects. The BRI is also still expanding, with Syria as the initiative’s newest member, where this focus is sure to help the war-torn country develop and recover economically, as we are yet to see a European-led alternative that can match Beijing’s investment strategy. 

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