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| Construction workers work on the new standard gauge railway line near Voi town, Kenya, where China has also invested large amounts of money |
The European Commission proposed on Wednesday a foreign policy plan to improve transport, energy and digital infrastructure links with Asia but denied seeking to counter Chinaโs ambitions that have raised suspicion in Western capitals.
The plan, which would be backed by additional funds from the EUโs common budget from 2021, private sector loans and development banks, amounts to a strategic response to Chinaโs largesse in much of central Asia and south-eastern Europe, where Beijing has invested billions of dollars.
The 13-page strategy outlined by the EU executive did not specify how much the bloc would spend, but the Commission is relying on a proposed โฌ60bn fund that would act as an insurance for investors if projects fail.
That fund could raise more than โฌ300bn between 2021 and 2027 by attracting investors into projects by offering a guarantee to cover the costs if a project fails.
Although not all money would be spent in Asia, the Commissionโs strategy, once agreed by EU governments, would make spending on infrastructure links with Asia official EU policy.
EU foreign ministers are expected to approve it at a meeting on Oct. 15, three days before an summit between European and Asian leaders in Brussels.
Since 2013, China has launched construction projects across more than 60 countries, known as the Belt and Road Initiative, seeking a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.
EU foreign policy chief Federica Mogherini said the Commissionโs proposal was not linked to any Chinese policies.
The Asian Development Bank estimates Asia requires more than โฌ1.3tn a year in infrastructure investment, not all of which can be met by China, the Commission said.
โOur proposals, our policies and our calendar are not determined elsewhere,โ Mogherini told a news conference when asked if the plan was a challenge to Beijing. โIt is not a reaction โฆ to another initiative โฆ be it in Beijing, Washington, Moscow or Timbuktu.โ
However, EU officials said they are concerned about what they see is a Chinese investment model which lends to countries for projects they may not need, or be able to afford, making them reliant on Chinese help once under way.
A Chinese-funded highway to link Montenegroโs Adriatic coast to landlocked neighbour Serbia has so indebted Montenegro that the International Monetary Fund has told the country it cannot afford to finish the project.
Jan Weidenfeld, an expert on Europe-China relations at the Mercator Institute for Chinese Studies (MERICS) in Berlin, said the EU plan was โvery much a response to Belt and Road.โ
โThe main message is that when youโre creating large-scale infrastructure projects, you need to abide by certain norms or standards, whether they be environmental or financial. The EU sees a window of opportunity to steer Chinese policies here,โ Weidenfeld said.
