The European Union is set to join the US, Japan and Asean in competing with China\u2019s Belt and Road Initiative<\/b>
\nThe European Union is poised to become a stronger player in Asia with the unveiling next week of its alternative to China\u2019s belt and road investment strategy.
The Euro-Asian connectivity strategy is expected to be agreed by the member states on Monday and formally unveiled at Thursday\u2019s Asia-Europe Meeting in Brussels.
In addition to the strategy, the EU is also working on plans to boost investment in India and Central Asia.
Observers said the moves would increase competition for badly needed infrastructure and investment across Asia.
The EU says it intends to engage with other strategies, including the Belt and Road Initiative, the Free and Open Indo-Pacific strategies of Japan and the US, as well as Asean\u2019s Connectivity 2025.
Asia needs more than US$1.7 trillion in infrastructure development per year, according to estimates last year by the Asian Development Bank, and observers say the increased competition to fund projects will mean better deals for the region.
Official policy documents directly contrast the EU plan with Beijing\u2019s belt and road strategy, describing the European approach as \u201csustainable, comprehensive and rules-based\u201d with the aim of \u201ccreating a level playing field and equal opportunities for all\u201d.
The Euro-Asian connectivity strategy is \u201cimplicitly\u201d in competition with China, said Frans-Paul van der Putten, senior researcher at Clingendael, the Netherlands Institute of International Relations, and is part of a broader push by the EU to show a united front on China policy, like the EU\u2019s moves to introduce a foreign investment screening process following a buying spree of European high tech companies.
The text of the strategy \u201cscreams China at almost every paragraph\u201d, said Fran\u00e7ois Godement, director of the European Council on Foreign Relations\u2019 Asia and China programme, adding that calls for transparency and openness were meant for Beijing\u2019s attention.
The proposal \u201cemphasises very heavily the role of other partners\u201d across Asia beyond Beijing, as well as those outside Asia like the US and Canada, which is part of a \u201cbalancing strategy\u201d against China, he said.
The Commission has proposed an increase of \u20ac60 billion (US$69 billion) to the bloc\u2019s foreign investment framework, a large portion of which will go to Asia, and which it expects will leverage further financial resources from the private sector.
Trade between Europe and Asia stands at \u20ac 1.5 trillion (US$1.7 trillion) annually, according to EU documents. Foreign Affairs spokeswoman Federica Mogherini has said the connectivity plan could lead to three to four times more European Union investments in Asia.
Plans do not specify, however, how much will be directed towards infrastructure, or to Asia specifically, as the final details will still be subject to budget approval by the European Parliament next year, and will not come effect until 2021.
While the plan could amount to hundreds of billions of dollars in investment for Asia, the sheer size of China\u2019s years of infrastructure work through its own initiative could leave the EU and others \u201csimply contributing to a system in which China is the most powerful player,\u201d said van der Putten.
Beijing has already signed US$390 billion in deals as of this year, according to China\u2019s Ministry of Commerce.
In July the US announced US$113 million in infrastructure and energy initiatives, followed by nearly US$300 million announced in August as security funding for the Indo-Pacific region.
On Tuesday at the Mekong-Japan Summit in Tokyo, Japanese Prime Minister Shinzo Abe pledged to promote 150 \u201cquality infrastructure\u201d projects in five Southeast Asian countries, as part of Japan\u2019s own free and open Indo-Pacific connectivity plan.
\u201cAll parties recognise that upgrading basic infrastructure is what is needed for economic and trade activity,\u201d said Cui Hongjian a senior fellow with the China Institute of International Studies.
Cui said increased competition to fund Asian projects could spur Chinese enterprises to perform more efficiently with belt and road partners.
But he warned that Europe would need to increase its communication with partner companies and Beijing in the early days of its initiative to clarify what the rules mean in practice and China would want to see how the first EU projects perform.
Greater competition for projects would mean better deals for Asian states said Garima Mohan research fellow at the Global Public Policy Institute, but she agreed with van der Putten that no other actor could match the resources China had dedicated to infrastructure development in Asia.
Mohan said the connectivity plan was a \u201cgood first step\u201d for the EU. \u201cThe initiative is an umbrella to frame all the activities the EU is already doing in Asia,\u201d she said.
Mohan also said the EU could use the plan to develop partnerships with others actors like India, Australia and Japan that were already involved in Asia.
\u201cIt\u2019s a way for Europe to say \u2018we\u2019re a player\u2019 and to start building relationships,\u201d she said.
Some across Europe have been frustrated that the strategy has not gone far enough, among them Jan Weidenfeld, head of the European China Policy Unit at the Mercator Institute for China Studies.
\u201cThe connectivity plan is not the major counter strategy some had hoped for,\u201d he said.
Moreover, the plan is meant primarily to address regions in Europe\u2019s immediate backyard, and counter Beijing\u2019s influence in Europe\u2019s immediate neighbourhood, like in the Balkans and Central Asia, Weidenfeld added.
Instead, the importance of the plan lies in the ability of the EU to make a stand as a global player, and align its standards with other nations to counter Beijing.
\u201cThe EU is clearly signalling to China \u2018this is what you should be doing.\u2019 No global player can effectively nudge China on its own,\u201d he said.<\/p>\n