European Challenges

China’s OBOR initiative appears to be the answer to many development problems and fi nancial needs of the engaged countries. According to Xinhua estimates, by 2020 the infrastructure demand in Asia will close in over $700 billion each year (Zhang 2015).

Such level of investment will not be possible without the engagement of the biggest international fi nancial institutions and investors. However, as the western countries still struggle with fi nancial problems, the World Bank, the IMF and the Asian Bank of Development (ADB) cannot cover all the needs of the region due to limited resources or, sometimes, political decisions.

Considering the enormous scope of projected operations and China’s commitment, all the countries concerned, including the European Union Members, should undertake dialogue with Beijing to make these initiatives successful. As the 2008 fi nancial crisis has severely touched almost all members of the European community, the project should help in economic recovery. Th e OBOR strategy is dedicated to economically weaker CEE countries and Greece, as well as to the developing, sometimes unstable regions in the Middle East and Central and South-East Asia, therefore the countries that will appreciate Chinese fi nancial assistance. Yet not much appears to be done on the European side.

188 Monika Krukowska

Th e reluctance of Europe may be the result of the immaturity of the project, as well as internal fi nancial problems of the EU. It may also be the consequence of the characteristic European lack of cooperation. As the Chinese off er aff ects only some EU Member States and the biggest players cannot hope for big profi ts, there is no drive to engagement, especially that some fi nancial input will be necessary.

However the OBOR strategy has some interesting aspects that need to be discussed. Th e most obvious advantage is the growth of trade and investment between the continents. Trade has always been the basis of the EU–China relations, and as the OBOR initiative aims at improving transport infrastructure, the countries along the line will benefi t not only from shorter and easier shipment possibilities, but also from the construction process itself, as China admits it expects the interested countries to engage actively in investment. Extended cooperation will most likely result in bigger trade and economic growth of the countries engaged. Multinational cooperation should be benefi cial not only fi nancially, but also politically, giving foundation for peace and stability, as well as future cooperation. As the Silk Belt will come across many unstable countries of Central Asia (e.g. Afghanistan) and the Middle East (e.g. Iran), it is in the European interest that those countries are involved in cooperation, thanks to which they will hopefully continue growth and peaceful development.

Th e European access to the China-led Asian Infrastructure Investment Bank (AIIB) is a good sign of a rising consciousness towards bilateral cooperation. During the Sino-European summit that took place in June 2015, Prime Minister Li Keqiang announced that China was ready to invest in the European Union’s new €315 billion infrastructure fund, however declined to declare the exact amount of Chinese engagement (Emmott 2015). Th is decision was interpreted as a friendly gesture in response to the European engagement in the AIIB project, in defi ance to the U.S.

Last but not least are the social consequences of multilateral cooperation. Due to the distance between Europe and China, people-to-people relations are presently based on tourism. According to the Economist, nearly one in ten international tourists worldwide is now Chinese. Th e Chinese travel mostly for leisure, and enjoy buying luxury goods: in 2013 they spent more than the Americans ($129 billion against

$86 billion). As only about 5% of China’s population owns passports, the number of Chinese tourists is expected to grow dramatically in the future (Th e Economist 2014). Yet, to attract more tourists from the Middle Kingdom, Europe should make some eff ort. Besides developing air connections with China, the biggest obstacle for the Chinese is the European visa system. Th erefore, simplifying the visa procedures or even introducing the American visa-waiver programme should enhance the rise in entrances.

189 The European Union and Emerging Markets. China’s New Silk Road Strategy...

Another factor is creating a friendly background for the incoming tourists, such as the knowledge of the Chinese language in tourist areas, shopping centres, disseminating Chinese customs, enabling the tourists to watch TV in Chinese and withdraw money from terminals without extra fees. Such small though important gestures should be regarded as incentives and result in a growing number of tourists from the Middle Kingdom.

A very important aspect of closer cooperation is the growing number of Chinese students in Europe that can help to bridge the gap caused by lower number of students in many European universities. Europe should also promote learning the Chinese language, which may be useful in strengthening bilateral cooperation, people-to-people exchanges and improving investment possibilities for both sides.

Conclusions

As a new initiative, the OBOR strategy needs time to prove its eff ectiveness. Given the number of countries involved, it will be a real challenge for all participants. China seems to be truly committed to the idea of convincing so many countries to give up sometimes long confl icts and cooperate closely for mutual benefi ts.

Th e growing importance and strength of the Middle Kingdom compels the European Union to work on developing bilateral and multilateral relations with the region, and China in particular. Th is shift to the East may be crucial for future development of the Old World. European countries should make the best use of the Chinese initiative by letting Beijing continue the project, engage in its realisation and wisely use it to their own good. Economic development, growing trade and prosperity, as well as deeper people-to-people ties will strengthen multilateral relations and enforce stabilisation to the benefi ts of all.

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