EU better than China Belt and Road initiative: EU

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EU better than China Belt and Road initiative: EU

The European Commission president has said that the EU plan to invest around 300 billion bn 255 billion dollars in global infrastructure will be better than China's belt and road initiative, as she announces a strategy to boost technology and public services in developing countries.

Ursula von der Leyen said the EU's global gateway strategy was a positive offer for infrastructure development around the world and based on democratic values and transparency.

The belt and road initiative of China, often referred to as the 21st century silk road, has allowed Beijing to expand its international influence by investing in more than 70 countries, accounting for half of the world's population and a quarter of GDP. It has helped countries in Asia, Africa and eastern Europe get railways and ports connecting them to China, while also being heavily indebted to Beijing, according to a projection of up to $1.3 tn.

Von der Leyen, who came to office pledging to lead a geopolitical commission, said countries did not have enough options on finding investment for big infrastructure projects.

They are relatively limited when it comes to investment choices. The few options that exist too often have a lot of small print, which includes big consequences, be it financially, politically, but also socially. In 2013 China launched the Belt and Road initiative, but Von der Leyen said that the EU could close the gap, although European spending was forecast to remain lower than the Chinese equivalent. She said when asked if we are able to do that, we are sure that we are able to do that.

She said that countries had their experience with the Chinese investments and they need better and different offers, and she said that the EU plan was a true alternative. She pledged that the EU would take a different tack. She said that the EU's priorities of a green economy and digital technology can be cited as a reason why we want to show that a democratic, value-driven approach can deliver on the most pressing challenges.

The European Commission, the 27 member states and its lending arm, the European Investment Bank, would aim to generate €300 billion in public and private funds by 2027, about 60 billion a year. The EU could support projects such as green hydrogen, underwater data cables and spending in schools.

The belt and road initiative could cost between $1.2 tn and $1.3 tn by 2027, according to analysts at Morgan Stanley.

Von der Leyen said that the EU's plans were aligned with Joe Biden's plan to build back a better initiative.

She promised countries receiving EU-backed loans that they would define their priorities while she reiterates the bloc's green and digital policy goals.

Reinhard Btikofer, a German Green MEP who has long argued that the EU needs to take a more hard-headed approach to China, described the launch of the strategy as a breakthrough and an important step for the EU.

He said that many partners around the world are ready to work with us to realise the global gateway strategy, in Asia, Africa and the Americas. It is now a matter of setting up the management of the strategy. Some doubted whether the plans would succeed. Professor at the Free University of Brussels, Jonathan Holslag argued that the commission was starting from a rather naive view of the geo-economy writing for the U Observer website, he claimed that the Chinese Silk Road will be primarily the result of Beijing earning hundreds of billions of dollars from trade with the west and investing abroad.

As long as China runs a trade surplus of €540 billion a year with the west, the global gateway's €60 billion a year will remain a bit like mopping up.