China’s Belt & Road initiative keeps EU firms at arm’s length
EUROPEAN companies are having a hard time accessing infrastructure projects part of China’s Belt and Road initiative, a business group said Thursday.
China has branded its Belt and Road initiative, a trilliondollar plan to build infrastructure across continents, as a development scheme that is open to all countries. But European businesses say they cannot participate in infrastructure projects that fall under the initiative’s umbrella due to a lack of transparency, according to a survey by the European Union Chamber of Commerce in China.
Inability to access information on project tenders is one of the main challenges faced by respondents.
Only two out of 132 companies that participated in the study said they learned about project opportunities through publicly available procurement information. Instead, nearly all the companies participating in Belt and Road projects said they were brought on by either Chinese business partners or the government.
“This lack of both transparency and a fair procurement mechanism contributes to the surprisingly low level of participation from multilateral development banks like the World Bank and the Asian Infrastructure Investment Bank (AIIB), both of which have very strict criteria for investment,” the report said.
European businesses said nearly all the project financing came from Chinese banks and companies, which contradicts the image of an international initiative promoted by the Chinese government.
“It is not our lack of capability; it’s the fact that [projects are] simply not open,” said chamber president Joerg Wuttke. “We can hop up and down as much as we want, there is simply no entrance.” About 15 percent of surveyed companies said they have bid on Belt and Road projects, and about a dozen have won roles in a moderate number of projects, the study said.
Nearly all the companies who participated said they played niche roles by providing specific technology or expertise.
The chamber also sounded the alarm over the technological standards used by China in other countries, which often differ from those used by Western countries.
China has largely withheld licenses for foreign tech companies to operate in its market and is now exporting its own technological standards abroad, putting Chinese companies at an advantage, according to the chamber.
Beijing has repeatedly promised to further open up its markets and to treat foreign companies in China equally to domestic firms.
The Chinese government has also committed to halt forced technology transfers from foreign firms, as part of a trade deal signed Wednesday with the United States.
“China is frankly the world champion in infrastructure projects, there’s no doubt about it,” Wuttke said. “There’s a good reason for them to sell it. The closed nature is something we object to.”