China bills its belt and road as a collaboration, but foreign companies feel excluded

BEIJING About seven years after Beijing launched a high-profile transcontinental infrastructure program aimed at generating goodwill abroad and boosting economic cooperation with the rest of the world, some foreign companies say they are left out of those projects.

Not only were a tiny number of foreign companies invited to participate in the China Belt and Road initiative, a flagship foreign policy effort of a billion dollars, but Beijing has also undermined its message of cooperation by keeping many partner countries to distance, a new study of the European Union Chamber of Commerce in China argues. The initiative focuses mainly on infrastructure projects.

“China is offering financing, construction, equipment, including labor,” said Jörg Wuttke, president of the European business group based in Beijing. “That is a very closed system.”

China has framed the Belt and Road initiative as a way to more closely integrate its economy with those of Asia, Africa, Europe, the Middle East and Latin America, mainly through infrastructure projects. That has earned him comparisons with the Marshall Plan, under which Washington gave billions of dollars to help rebuild strips of Europe and that placed the United States at the center of the post-war economic order.

Workers in a section of the China-Laos railway, which is part of the Belt and Road initiative.

Photo:

Taylor Weidman / Bloomberg News

During the first 11 months of 2019, Chinese companies signed 6,055 contracts in 61 countries as part of Belt and Road with a total value of $ 127.67 billion, an increase of 41.2% over the same period last year, according to the Ministry of Commerce of China.

However, Belt and Road’s effort has attracted criticism claiming it lacks transparency in financing, leading to charges of corruption, waste and out of control debt. President Xi Jinping has responded in part by recalibrating his flagship program, promising more transparency and financial sustainability.

However, the European Chamber, in its report published on Thursday, said that some apparently successful Belt and Road projects relied on large Chinese subsidies to stay afloat, citing a logistics company detailing the brochures that strongly distorted the prices of Market for freight traffic between Western China and Europe.

The commercial group said that only 20 of its 1,700 member companies in China had participated in the initiative. Those who did so joined because of existing relations with the Chinese government or to provide technology expertise that Chinese companies could not supply, the camera said.

Most of the participating companies did so through joint ventures with Chinese state-owned companies and, in almost all cases, they had a small minority stake in the project. Others had submitted bids for projects related to Belt and Road, although very few received the project, said the report, which indicated the lack of an office or even a phone number for the initiative.

Geng Shuang, spokesman for the Ministry of Foreign Affairs, rejected the report of the European Chamber as partial, saying that the initiative was launched with a spirit of openness, inclusion and transparency.

Under the Belt and Road initiative, “Chinese and foreign companies follow market rules and the principle of equity,” Geng said Thursday. He listed the German businesses of Siemens and DHL of Deutsche Post, as well as those of France Schneider Electric, as examples of participating European businesses.

Siemens, which was one of the first Western companies to work with Chinese companies on Belt and Road projects, opened an office in 2018 to oversee their participation in the plan.

While some American companies have shown interest, few have been directly involved. The most notable among them is General Electric Co., which has partnered with Chinese state-owned companies in power plant and network projects in Africa. In July, Larry Culp, president and CEO of GE, met with Hao Peng, president of the body that oversees China’s state assets, to discuss the Belt and Road initiative.

Some of the announced Belt and Road participants had been retroactively labeled as joining the effort, the European Chamber said. When a Chinese consortium won an offer in 2018 to build a bridge in Croatia as part of an EU-funded initiative to create transport, energy and digital connections between Europe and Asia, the Chinese press hastened to praise it as part of the Belt and road initiative

China is trying to generate enthusiasm around Xi Jinping’s “One Belt, One Road” plan to expand trade with roads, railways and ports. Artistic installations such as “Golden Bridge on Silk Road” and thematic commercial products support the campaign. Photo: Thomas Peter / Reuters (originally published May 15, 2017)

Write to Julie Wernau at [email protected]

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