European companies struggling to compete for Belt and Road projects
January 21, 2020 Category China News Round-up, Weekly
European firms are struggling to overcome entry-level barriers to China’s global infrastructure drive, despite Beijing’s promises of inclusion, according to a report by the European Union Chamber of Commerce in China. It said that European firms were interested in taking part in the Belt and Road Initiative (BRI) but “have come up against a variety of barriers to participation, including, at the most basic level, being unable to access information on project tenders”. “Although the initiative is heavily couched in language about cooperation and inclusiveness, the data does not appear to back this up,” the Chamber said in the report, “The Road Less Travelled”.
The Chamber surveyed 132 firms and found that only 15% had bid for Belt and Road projects. Those who did take part largely did so as subcontractors and playing “niche roles” as suppliers of specific technology or know-how that could not be met by Chinese companies. These specialized areas included safety services and testing, inspection and certification, as well as shipping and logistics. European companies were given “crumbs from the table, albeit pretty big crumbs”, the report quoted one business executive as saying. One of the barriers to participation was the “vertical integration” of Chinese companies in the projects, ranging from project management to financing and materials. The approach was “profoundly disconcerting” to European business because it prevented meaningful competition and raised doubts about transparency, quality and cost, it said.
Respondents who did take part in the initiative said the quality of projects had improved after criticism of project sustainability and environmental impact. “When it comes to the Belt and Road, China is showing the willingness and capability to adapt, which is a good thing,” Chamber President Jörg Wuttke said. But EU officials are also worried that China is trying to divide the EU. So far 12 EU members – Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Italy, Latvia, Malta, Poland, Portugal, Romania and Slovakia – have signed up for the Belt and Road. “Given that it abides by the one-China policy, in the many areas where the EU holds competency over member states, China should reciprocate and adopt a one-EU policy, rather than trying to divide the EU through bilateral deals,” the Chamber said in the report.
“The EU needs to quickly deploy its own outreach and development work, and push its connectivity strategy as both a complement and credible alternative to the Belt and Road,” the chamber said, as reported by the South China Morning Post.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world