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China´s spell over Europe; UK embraces OBOR

Apunte 4 / 2019

Juan del Pozo Berenguer

 

With the Belt and Road initiative introduced in late 2013 by Chinese president Xi Jinping, a new commercial order is slowly, but steadily, taking form, reshaping the commercial rules at a world level. With the belt component of this scheme concentrating the initial efforts on the African continent through the investments of the Chinese Export Import Bank (Exim Bank), and making its way into the Mediterranean by way of the Pireus, now it´s the UK who has revealed its interest in this initiative, no doubt concerned by the situation in which its commercial interests will finally derive into on account of the Brexit.

The British chancellor of the Exchequer Philip Hammond has already praised the Chinese commercial momentum by defining the relations between both countries as the “golden era of relations”. Relations between the UK and China hardly need introduction as a refunded effort on commerce between both was boosted by the David Cameron administration, and an additional step further has been taken by Phillip Hammond who announced later this April a joint economic and financial dialogue to be held in China this coming June.

The European Union and the United States, who are the most likely to suffer from a deviation of UK commercial ties, continue to observe the outcome of future agreements. Recent allegations of espionage conducted by Chinese firm Huawei which have met with a call from the Trump administration to ban its products, a call that has been challenged with a fierce suit from the Chinese company alleging this ban to be unconstitutional, and the recent harassment of a French frigate while on deployment in the vicinity of Taiwan from Chinese ships make a UK-China approach more difficult to digest, and even more so when UK has announced a possible good will visit of an aircraft carried to China in the near future.

Huawei represents an interesting case study as the company is placed in the canter stage of an impending espionage ring through their newly developed 5G network, though no evidence supports these views for the moment. But UK´s acceptance to allow the Chinese technological giant to take part to a degree in its network has raised concerns over information exchange between UK and its American and European partners, particularly the former. The arrest in Canada last year of chief financial officer (CFO) for Huawei, Meng Wanzhou, has already thrown this country into the melee between the US and China. But despite the row between the two commercial giants, UK believes that security risks within Huawei´s 5G network are controllable, a fact which is sure to strain relations with the US. UK is currently a member of the Five Eyes intelligence sharing alliance together with partners US, Canada, New Zealand and Australia, the last two of which have already blocked Huawei terminals in 5G networks, leaving the UK in an uncomfortable position within this alliance as the sole Huawei supporter, if only on a limited scale for the time being.

With China embarked on what is now being described as a debt-trap policy in its approach to free commerce, funding projects in countries with the purpose of generating a debt difficult to break free from, UK´s temptation to embrace the Chinese geopolitical initiative, with what the EU has defined as its “systemic rival”, becomes even more difficult to understand. But it is not only the British government who is willing to let itself fall into the claws of this debt generating system, as private investment from UK firms are beginning to make its way to the Asian country, as is the case with Standard Chartered bank, which has recently signed a contract with the Exim Bank.

European involvement in the Belt and Road initiative is not unprecedented, as Greece pioneered these relations in the Pireus, giving China free access to a permanent port for the stationing of a hypothetical naval force in the Mediterranean, a fact which has whistled by relatively unnoticed until now, as was the case with the port of Djibouti which now rests in Chinese hands. China strenuously denies that these ports are military in nature, but evidence suggest otherwise as warships from the People´s Liberation Army Navy (PLAN) are now permanently based there, a fact difficult to contest. 

For the moment, the commercial balance of the Chinese investments in Africa can be analysed from very different perspectives and not all necessarily negative. African countries like Mauritania and Angola have signed up for investments which have provided both countries with important benefits. Mauritania has a rich fishing industry which has placed at the hands of Chinese fishing companies in return for investments in the field of military materiel amongst others. But this return investment has a catch, as maintenance and spares for this equipment must be acquired via Chinese companies as they are not possible to obtain elsewhere, leaving this back payment trapped in a circle in which China alone is the sole source of aid. True that fishing factories have been established in Mauritania, as is the case with the one located in Nouadihbou, but its personnel is Chinese only, as is the small fishing fleet permanently anchored just a few hundred yards off this factory which operates undisturbed.

But infrastructure is a key element if OBOR is going to work. At the moment, there are barely any African capitals with a solid road network to connect them, if any at all. The same applies to the rail network despite China´s interest in creating a high speed rail network to connect all 54 African capitals, an initiative put forward in 2014 by Chinese premier Li Keqiang[1], a dream still to be realized. Other projects as the above mentioned port of Djibouti in which China is the sole benefactor, are in clear contrast with a disunited African policy in terms of what it really needs, rather than what it wants. Former Chinese advisor to Senegalese president, Ibrahim Diong made it clear that “if your problem is energy, and you build a stadium, who´s to blame?”, a statement difficult to counter.

Mauritania is not the only case of a galloping debt-generating relationship between an African nation and China, but reflects well enough the kind of commercial ties which the UK may be contributing to should its policy continue along these lines. Most troubling of all is the fact that somewhere along the road seems to be China´s will to have a permanent fleet stationed in the heart of the Mediterranean, a reality which is soon becoming by way of Greece, and which will certainly converge in unprecedented consequences with China´s PLAN man´o´war operating freely in NATO´s own backyard . Perhaps the UK knows best and has taken all possible consequences into account. But perhaps it hasn´t.

 

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Juan Del Pozo Berenguer es Capitán de Corbeta de la Armada Española y colaborador del Centro de Seguridad Internacional (Instituto de Política Internacional)

 

 

[1] Two Belts, one Road? The role of Africa in China’s Belt & Road initiative, Julia Breuer, July 2017

 

Imágenes: Getty, European Parliament

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