Experts call for synergy between EU and Chinese mega projects

Beijing and Brussels should find ways to extend the synergy between the three-year European investment scheme and China’s Belt and Road Initiative, in light of the European Union recently announcing it will enlarge the 315-billion-euro (USD 354 billion) scheme in terms of time and scale, say experts on China.

"For sure, it is positive for both sides to extend the synergy cooperation if Brussels has put that on the agenda," said Hinrich Voss, professor of international business at the UK’s Leeds University.

Voss made the comment to China Daily after European Commission President Jean-Claude Juncker revealed the idea at the G20 summit, which was held last week in Hangzhou, the capital of China’s Zhejiang province.

"I am now working on proposals to extend the plan, both in time and in scale," Juncker said, referring to the 2015-17 Investment Plan for Europe, which aims to trigger 315 billion euros of investment from a 21-billion-euro initial financial injection.

Juncker said the proposal was based on the smooth delivery of the scheme. As of July this year, a total of 116 billion euros in investment has been delivered. Though this is only 37 percent of the 2015-17 target of 315 billion euros, Juncker said he was satisfied with the plan because 200,000 small and medium-sized enterprises in Europe now have better access to finance.

Partly because of these efforts, Juncker said economic growth in the euro zone had grown more quickly than in both the United States and the United Kingdom. He expects growth this year to be at 1.8 percent.

Beijing and Brussels agreed in mid 2015 to forge synergy between the Belt and Road Initiative and the European investment plan, to help penetrate trade and investment markets on both sides. In addition to the EU, more than 30 economies worldwide have already entered into agreements with Beijing on mega-project synergy.

While G20 leaders agreed in Hangzhou to deepen global cooperation on infrastructure construction, which is always seen by governments as part of the recipe for economic growth, China experts said Brussels should discuss with Beijing ways to further connect the two mega projects.

"I think it would be positive if Beijing and Brussels would work closely together on the ongoing synergy of the investment scheme and the Belt and Road Initiative," said Voss.

"Based on that, if the extension of the investment scheme (by the EU) is there, it can be further linked to the Belt and Road Initiative."

Voss said the UK exiting from the EU would not affect such cooperation between Beijing and Brussels and noted that such synergy would help bring in more investment, incorporating European and Chinese firms.

"So, we all have to see how this develops in the future but I think it is good to see that this is coming about, regardless of the UK’s exit from the European Union," said Voss.

Zhang Haiyan, professor of studies into the Asian economy and director of Neoma's Confucius Business Institute in France, said it would be meaningful for both sides to set up a mega-project synergy platform but noted that Brussels and Beijing would need to push how this policy synergy could deliver tangible benefits for businesses on both sides.

"It is interesting to put these two mega-projects on one platform and try to cooperate, but I think it is not only needed at a policy level," Zhang said.

He would also like to see cooperation at the company level among businesses.

Zhang has called for more encouraging measures to be put in place to help Chinese investors from the private sector find expansion opportunities in Europe. Compared with the scale of European investment in China, Zhang said Chinese investment in Europe is still small, despite the fact that there has been a big leap in recent years.

"So, how to bring more Chinese investors to Europe, especially for those private businesses, is quite challenging," said Zhang, who has closely monitored the development of the Belt and Road Initiative in Europe.

In March, his business institute and China Daily co-organized a seminar in Paris to explore how European and Chinese investors should include "green and sustainable" elements in the Belt and Road Initiative. In August, President Xi Jinping put the concept of the "Green Silk Road" into the framework of this mega-project to better link Asia, Europe and Africa.

Bernard Dewit, from the Belgian-Chinese Chamber of Commerce, said it is true both China and the European Union have repeatedly encouraged two-way investment in recent years.

"For potential Chinese investment in Belgium and in many parts of Europe as well, we hope that more Chinese investors could finally make it," said Dewit.

Yao Yueyang, an intern with the China Daily European Union Bureau contributed to this story