European firms get ‘crumbs’ from China’s Belt and Road

File photo. Chinese laborers work at a construction site of the central business district of the new administrative capital, 45 kilometers east of Cairo, Egypt, 1 June 2019. Egypt started the construction of the new administrative and financial capital of Egypt, partnering with the China State Construction Engineering Company (CSCEC) as part of China's larger Belt and Road Initiative. [Khaled Elfiqi/EPA/EFE]

China’s Belt and Road Initiative (BRI), an investment plan aiming to connect Europe with Asia, is sidelining European companies and Brussels should review its competition law to level the playing field, a business lobby said on Thursday (16 January).

Opaque procurement processes and the dominance of giant state-owned Chinese companies mean European companies only get “crumbs from the table,” the European Chamber of Commerce in China said in a report.

The European Union should move to force Chinese companies that access the EU procurement market to operate under the same restrictions that EU companies do in China, it added.

“If the EU fails to play an active and competitive role, there is a real danger that it could eventually become little more than a peripheral market tacked on to the end of Eurasia,” the report said.

European companies are merely “niche players” in the BRI, with just 20 chamber members of 132 survey respondents reporting that they had bid on BRI projects, chamber President Joerg Wuttke told reporters on Monday ahead of the report’s release.

China has launched construction projects across more than 60 countries since 2013, seeking a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

Those European companies that did get involved did so mainly through Chinese business partners or the government, and usually their role was to provide specific technologies or expertise that the Chinese side lacked, the report said.

Chinese national champions were also gaining “monopolistic power” in some BRI countries by building digital infrastructure that involved complete packages of software and hardware based on Chinese standards.

Such companies benefited from heavy state support at home, which helped them beat international competitors.

“Smaller, less developed countries that do not have the capacity for setting their own standards will certainly be put under considerable pressure to simply adopt Chinese standards,” the report said.

The EU needed to allow its own companies to scale up by reviewing its competition law, it said. The EU’s own infrastructure initiative, the “Connectivity Strategy,” should also be prioritised as a “credible alternative” to the BRI.

Mogherini unveils EU response to New Silk Road

EU foreign affairs chief Federica Mogherini announced on Wednesday (19 September) the Commission’s vision on how to better connect Europe and Asia, in what appears to be a reply to China’s Belt and Road initiative, and also an effort to prepare the Asia-Europe Meeting (ASEM) in October.

The Chinese foreign ministry did not immediately respond to a request for comment.

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