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"the EU's engagement with China will be principled, practical and pragmatic, staying true to its interests and values. The EU's approach is based on a positive agenda of partnership coupled with the constructive management of differences.
The strategy directs the EU to find practical ways to engage China in its reform process so as to achieve mutual benefits in political, economic, trade and investment, social, environmental, and other relations" (Delegation of the European Union to China, 2016c).
Moreover the strategy declares that in line with the two sides' UN and G20 responsibilities, they
"should promote global public goods, sustainable development, and international security, and advance respect for the rule of law and human rights within China and internationally" (Delegation of the European Union to China, 2016c).
2.2 THE BELT AND ROAD INITIATIVE
As explained previously, this section briefly presents the history, goals and main characteristics of the Chinese "The Belt and Road Initiative". It subsequently introduces the new financial and educational Institutions that were established in order to create a multilevel support for the development of the initiative.
The Silk Road Economic Belt and the 21st-century Maritime Silk Road, whose Chinese official name is 絲綢之路經濟帶和 21 世紀海上絲綢之路 (shortened into 一帶一路), is a recent Chinese development strategy and framework. In the beginning its English official name was One Belt, One Road (abbreviated with the acronym OBOR), but in the end of 2016 it was modified to The Belt and Road Initiative8 (BRI) in order to avoid the emphasis on the word "one" as idea of closeness (interview n°5, April 2017), moreover it is often referred to also with the name New Silk Roads, this thesis will use the three versions as all of them are commonly used and recognizable.
The project consists of two different initiatives, the "New Silk Road Economic Belt" and the "21st
8 The name is used in the official webpage of the initiative, within the website of the State Council of the People's Republic of China: http://english.gov.cn/beltAndRoad/
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32 Century Maritime Silk Road", that were proposed separately by the Chinese President XI Jinping during his visits to Kazakhstan and Indonesia in 2013. On the 28th of March 2015 the Chinese Government released an official document displaying the major principles, priorities and goals of the initiatives, titled "Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road"9 (Vision & Actions) (Zhang Y. , 2015). The official document was issued by the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People's Republic of China, with State Council authorization. In particular, as shown in Map 1 below, the New Silk Road Economic Belt's main objective is to link China with Europe through Central and Western Asia, and Russia. On the other hand, the 21st Century Maritime Silk Road is aimed at connecting China with Southeast Asian countries, Asia, Africa, Europe, and, on a long term prospective with South America; from China's coast through the South China Sea, the South Pacific following one route, and the Indian Ocean, the Persian Gulf and the Mediterranean Sea through the other one. These multiple economic and financial corridors are aimed at connecting directly and indirectly more than 60 countries (He, 2015). None of the land-based and the maritime roads follow any clear geographical routes, they are a virtual roadmap that will lead China to further integrate into the world economy and strengthen its influence in these regions (Ma, 2015; Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, 2015). OBOR is an idea inspired by the impact and strategic role that the original Silk Road played in the ancient world. Beijing is trying to make its new project more appealing by reconnecting it to the romantic and exotic idea of the old Silk routes that connected both commercially and culturally the West and the "Middle Kingdom".
9 The complete text of "Vision and Actions" is provided in the Appendix 1.
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33 Map 1: Routes of the "New Silk Road Economic Belt" and the "21st Century Maritime Silk Road"10
The PRC has already started implementing the network of routes, both on the land and on the sea: the "New Silk Road Economic Belt" connects different lines that are already working, such as the Chongqing-Duisburg, the Chengdu-Lodz, the Lodz-Praag, the Zhengzhou-Hamburg-Duisburg, the Suzhou-Warsaw, the Yiwu-Madrid, the Wuhan-Hamburg (Arduino, 2014; Leung, 2015); whereas from the "21st Century Maritime Silk Road" perspective, China has been engaged in the Piraeus Port, in Greece, where the national shipping company COSCO has bought the Pier Two through a leasing for 35 years (Harriet, 2010; van der Putten & Meijnders, 2015). Moreover, as soon as "all the projects will be completed the high-speed rail connection will extend all the way from Piraeus to Budapest" (Casarini, 2015:4).
10 Map retrieved from the website of the Xinhua Finance Agency. The map shows in red the route of the "New Silk Road Economic Belt" and the cities that are included in the initiative; whereas the blue line indicates the route and the cities of the "21st Century Maritime Silk Road".
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34 The initiative 一帶一路 is considered, especially by its promoters, to be a great occasion for cooperation, regional on the short term and global on the long term. In fact, it incorporates the "idea of building a new network of global partnerships, including both bilateral and multilateral cooperation in political, economic, cultural and other fields. It emphasizes the adaptability of development strategies in China and other participating nations in order to produce benefits that are shared by all in an economic “win-win” outcome" (He, 2015). This development strategy aims to build “five connectivities”11, called in Chinese 五通 (Wutong), in order to establish a "community" of countries, namely: policy consultation, infrastructure connectivity, free trade, free circulation of local currencies, and people-to-people exchange (He, 2015; Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, 2015). Likewise, the Vision & Actions defines the "Five Principles of Peaceful Coexistence" as fundamental values upheld by OBOR, they consist in:
1. "mutual respect for each other's sovereignty and territorial integrity";
2. "mutual non-aggression";
3. "non-interference in each other's internal affairs";
4. "equality and mutual benefit";
5. "peaceful co-existence" (Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, 2015; Müller-Markus, 2016; Lim, Chan, Tseng, & Lim, 2016: 114).
Furthermore, Beijing considers the Belt and the Road as an effective way to reduce the development gap between the Eastern and Western regions of the country, by attracting foreign investments in the less dynamic regions of Western China (Zhang Y. , 2015).
11 "Connectivity has become a new buzzword in global affairs. Though no clear definition currently exists, regional and global discussions have begun to focus on the question of how to increase the degree and quality of interaction amongst countries and people by envisioning and creating the ideational and practical conditions for a more efficient and effective flow of goods, investments, services and information." (Bersick, 2016)
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35 The two major priorities of the strategy are to build infrastructures, namely roads and railways, and to stimulate resource development by means of electricity and gas projects. Currently the focus is on the railway aspect which is considered to have many advantages12: it is a more cost-effective and faster means of shipping goods, compared to the very expensive air freight and the slow sea freight (Maverick, 2016; Arduino, 2014; Puls, 2015). To reach this scope, it is necessary to obtain financial resources. For this reason, China has established a few financial institutions, which have the ability to rival the Washington-based IMF and World Bank: the Asian Infrastructure Investment Bank (AIIB), the BRICS New Development Bank (BNDB), the Silk Road Fund and the financing institution of the Shanghai Cooperation Organization (SCO) (Zhang Y. , 2015; Bremmer, 2015).
This paragraph will briefly analyze them. The AIIB "is a multilateral development bank (MDB)" proposed by the Government of the PRC in 2013, and it is focused "on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, etc." (AIIB website). It was founded in October 2014, when the 22 member states signed the Memorandum of Understanding (MoU), and Beijing was selected to host the headquarters of the bank. Subsequently the participants started the process of Chief Negotiators Meeting (CNM) to negotiate the AIIB's Articles of Agreement (the Articles); in the meanwhile the number of Prospective Founding Members had increased to 57 countries, whose representatives signed the Articles between June 29, 2015 and December 31, 2015 and finally entered into force on December 25, 2015 (AIIB website). After the UK chancellor, George Osborne, announced that the Great Britain would join the Chinese "answer to the World Bank" in March 2015, many of other European countries, such as Germany, France and Italy,
12 Railway shipping has various advantages: it is cheaper and more environmentally friendly that the air freight, since it produces a smaller carbon footprint than the air transport; it is faster than the sea shipping because it cuts the transit times of the 50% (30 to 40 days via the seas corresponds to 14 to 18 days rail transit time); finally, it is arguably more secure, because the land route avoids the chokepoint of the Malacca Strait (Arduino, 2014; Maverick, 2016; Puls, 2015).
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36 finally decided to follow the British example and become Prospective Founding Members (Anderlini, 2015). Japan and the US are among the major world economies that haven't joined the AIIB. Interestingly, the bank has signed non-binding Memorandum of Understanding with both the European Bank for Reconstruction and Development and the European Investment Bank (AIIB website). The New Development Bank (NDB), formerly known as BRICS Development Bank, is a MDB founded by the BRICS countries, namely Brazil, Russia, India, China and South Africa, "with an objective of funding infrastructure projects in the developing countries and" to "meet the aspirations of millions through sustainable development" (NDB website). The bank was established after its treaty was signed by the five members in July 2014 and entered into force in July 2015,
"with an initial authorized capital of $100 billion, and with initial subscribed capital of $50 billion, equally shared among the five members". The NDB headquarters is situated in Shanghai, China (NDB website; Korablinov, 2014). The Silk Road Fund was launched in Beijing on the 29th of December 2014, with the main objective of providing "investment and financial support for trade and economic cooperation and connectivity under the framework of the" OBOR, through the participation of both Chinese and foreign enterprises and financial institutions (Silk Road Fund website). In September 2015 The Silk Road Fund and the European Fund for Strategic Investments (EFSI) established a joint working group (Bersick, 2016). Finally, the Shanghai Cooperation Organization (acronym SCO), known also as the Shanghai Pact, is an Eurasian political, economic and military organization, founded by the PRC, Kazakhstan, Kyrgyz Republic, Russia, Tajikistan, and Uzbekistan on 15th June 2001 (SCO website). Its Secretary General announced that the Fund will actively engage in the New Silk Road initiative, in order to "enhance its role in regional economic development" (Wang Y. , 2016a).
Finally, from the European perspective, on the 28th September 2015, during the High Level Economic and Trade Dialogue held in Beijing, the European Commission and the Chinese government "signed a Memorandum of Understanding on the EU-China Connectivity Platform to enhance synergies between" the BRI and the European "connectivity initiatives such as the
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37 European Transport Network policy" (European Commission, 2015a). The Platform, described as the "EU's most advanced response" to the Chinese initiative (Montesano & Okano-Heijmans, 2016:1), "will promote cooperation in areas such as infrastructure, equipment, technologies and standards. This will create multiple business opportunities and promote employment, growth and development for both sides, and it will be done in cooperation" with the European Investment Bank (European Commission, 2015a). Moreover, in June 2016 a cooperation agreement, in the form of Memorandum of Understanding (MoU) was reached between the European Bank for Reconstruction and Development (EBRD) and the Silk Road Fund, in order to carry out joint projects for the implementation of OBOR (Reuters, 2016; Pyrkalo, 2016).
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38 3. LITERATURE REVIEW ON THE STUDY OF BRI
The One Belt One Road is the new, impressive Chinese diplomatic initiative, which has attracted the attention of the world. Recently, especially from the year 2016, many scholars and journalists have written countless articles and papers about it and its impact on world politics. This chapter is aimed at analyzing the existing literature about the two main themes of this research: the diplomatic relations between China and the European Union; and the OBOR in general, as well as its impact on Europe.