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Global Gateway: Can The EU's Giant Infrastructure Plan Rival China's Belt And Road?

Visitors walk past a wall with a map showing the species of peony in Belt and Road Initiative countries at a horticultural exhibition at the Beijing Expo 2019 in Beijing.

The European Union will invest some 300 billion euros ($340 billion) on infrastructure and other projects as part of Global Gateway, a new venture from the 27-country bloc designed to compete with China's vast and influential Belt and Road Initiative (BRI).

A draft proposal from the European Commission, seen by RFE/RL, outlines Brussels' plans for the ambitious initiative, which will rely on public investment and the private sector to build infrastructure intended "to strengthen digital, transport, and energy networks" around the world and invest in "projects that can be delivered with high standards, good governance, and transparency."

The plans for Global Gateway, which will be revealed on December 1, seek to mobilize a sum up to $340 billion that will be invested by 2027 and leverage resources from the EU, European financial institutions, development banks, and member states.

The draft document goes on to add that the initiative will focus on building projects like fiber-optic cables, transport corridors, and "clean-power transmission lines" that will offer "attractive investment and business-friendly trading conditions, regulatory convergence, [standardization], supply-chain integration, and financial services."

European Commission President Ursula von der Leyen (bottom right), European Council President Charles Michel (top right), German Chancellor Angela Merkel (bottom left), French President Emmanuel Macron (bottom center), take part in a videoconference with Chinese President Xi Jinping.
European Commission President Ursula von der Leyen (bottom right), European Council President Charles Michel (top right), German Chancellor Angela Merkel (bottom left), French President Emmanuel Macron (bottom center), take part in a videoconference with Chinese President Xi Jinping.

The stepped-up plans from the EU come as many Western countries are looking to play a larger role in funding infrastructure across the developing world and roll back the BRI, which has become an important strategic tool for Beijing to extend its influence since its launch in 2013.

Under the guise of the BRI, China has channeled hundreds of billions of dollars into foreign infrastructure, boosting trade and clearing the way for it to forge political and economic links around the world, from Latin America to Africa and Central Asia.

The EU plans do not mention the BRI, Chinese leader Xi Jinping's signature foreign-policy project, by name, but Global Gateway is framed as an alternative program that the draft says will focus on providing an "ethical approach" to infrastructure financing that is "values-based" and relies on fair and open competition.

"Global Gateway will invest in international stability and cooperation and demonstrate how democratic values offer certainty and fairness, sustainability for partners, and long-term benefits for people around the world," the draft document states.

Response To The BRI

Launched amid great fanfare by Xi, the BRI has since been supported by international organizations and more than 150 countries -- including many in the West -- as it has expanded in scope from ports, pipelines, and roads to include digital technology, health care, and green energy.

But a combination of growing disillusionment among partner countries with the resulting projects, growing global demand for more investment, and increased unease about the strategic implications of the BRI have opened the door for alternatives to emerge.

"Brussels is trying to differentiate itself from what China has been providing," Jonathan Hillman, the director of the Reconnecting Asia Project at the Center for Strategic and International Studies (CSIS), told RFE/RL. "When it comes to environmental issues, transparency, and sustainability, the EU has a strong and attractive brand that it can leverage."

The BRI has also been undercut in recent years by questions regarding the commercial value of many of its projects, growing worries over murky lending practices, and concerns over it being a vehicle for Chinese control.

Debt and transparency concerns have also shrouded Chinese-funded projects around the world, from Sri Lanka to Pakistan and Uganda to Kyrgyzstan.

Beijing-backed ventures in Hungary, such as a potential Chinese university in Budapest funded by a $1.5 billion loan and $1.9 billion borrowed for a railway connecting Budapest to Belgrade, have faced public backlash over corruption accusations and a lack of transparency over the details of the loan agreements.

Across the Balkans, Chinese projects have been linked to environmental damage and poor labor practices, as well as debt concerns, such as a controversial $1 billion Chinese-funded highway in Montenegro.

According to the draft, Global Gateway has a world-spanning focus, but a European Commission official who was not authorized to speak to the media told RFE/RL that the initiative would prioritize Africa and Asia for investment. The EU plan will also aim to focus on investing into areas around digitalization, health, climate, energy, and transport.

"The BRI raised the stakes and made Western policymakers more aware of the strategic consequences of not being involved in infrastructure," Hillman said. "Beijing has also created an opportunity for higher-quality alternatives through its own mistakes. It's hard to imagine Global Gateway existing if it wasn't for the BRI."

Coordinating Western Plans

The draft also mentions that Global Gateway will aim to align with other infrastructure plans adopted at the Group of Seven (G7) summit in the United Kingdom in June, including U.S. President Joe Biden's Build Back Better World (B3W) initiative.

The U.S. plan aimed to help narrow the global need for infrastructure by working with countries like Australia, India, and Japan, as well as the new EU initiative.

But the biggest obstacle will be how Brussels and its partners can leverage the financial muscle to rival Beijing for infrastructure investment, Andreea Brinza, vice president of the Romanian Institute for the Study of the Asia-Pacific, told RFE/RL. "The biggest obstacle may be the cost of implementing projects [with high standards]," she said. "Developing countries really need infrastructure, but if it's too expensive they can't afford it [and] there will also be profitability issues."

Taken together, the United States, Europe, Japan, and others have far outspent China in terms of funding in recent years as the pace of investment through the BRI has slowed down since reaching a peak in 2017.

Chinese President Xi Jinping raises a toast after a speech at the welcome banquet for leaders attending the Belt and Road Forum in Beijing in April 2019.
Chinese President Xi Jinping raises a toast after a speech at the welcome banquet for leaders attending the Belt and Road Forum in Beijing in April 2019.

How Global Gateway can be coordinated with other programs like B3W and leverage the necessary funds remains to be seen, but the project has high-level backing in Brussels and the $340 billion figure marks a substantial increase from an earlier amount attached to the initiative.

"The EU's biggest challenge will be to find the perfect combination of quality infrastructure and affordable prices," Brinza said. "If the EU [can] blend high standards with affordable costs, it will definitely succeed, especially considering that the BRI is passing through a phase of disappointment and criticism."

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    Reid Standish

    Reid Standish is an RFE/RL correspondent in Prague and author of the China In Eurasia briefing. He focuses on Chinese foreign policy in Eastern Europe and Central Asia and has reported extensively about China's Belt and Road Initiative and Beijing’s internment camps in Xinjiang. Prior to joining RFE/RL, Reid was an editor at Foreign Policy magazine and its Moscow correspondent. He has also written for The Atlantic and The Washington Post.

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