BEIJING – China’s One Belt, One Road investment program, which aims to connect Europe with Asia, is wrecking European companies, and Brussels should review its competition law to create a level playing field, a corporate lobby said on January 16.
Opaque procurement processes and the dominance of huge state-owned Chinese companies mean that European companies only get “crumbs off the table”, the European Chamber of Commerce in China said in a report.
It urged the European Union to force Chinese companies that have access to the EU procurement market to operate under the same restrictions that EU companies have in China.
“If the EU does not play an active and competitive role, there is a real risk that it will ultimately become just a peripheral market that will be tackled by the end of Eurasia,” said the Chamber of Commerce.
The One Belt, One Road (OBOR, also known as Belt and Road) initiative aims to build a modern version of the Silk Road to connect China with Asia, Europe and beyond as 60 countries since 2013.
European companies are only “niche players” in OBOR. Only 20 chamber members out of 132 respondents said that they had bid for OBOR projects, chamber president Jörg Wuttke told reporters on Monday before the report was published.
The European companies that got involved did so mainly through Chinese business partners or the government. Typically, their job was to provide certain technologies or skills that the Chinese side lacked, the report said.
Chinese and foreign companies can participate in OBOR projects with open, transparent funds, said Chinese Foreign Minister Geng Shuang on Thursday in Beijing. Many European companies have participated in OBOR, he said.
Chinese national winners also gained “monopolistic power” in some OBOR countries by building a digital infrastructure that, according to Chinese standards, included complete software and hardware packages, according to the chamber’s report.
These companies benefited from strong domestic government support, which allowed them to beat international competitors.
“Smaller, less developed countries that are unable to set their own standards will certainly come under considerable pressure to simply adopt Chinese standards,” the report said.
The EU must allow its own companies to revise their competition rules, she said. The EU’s own infrastructure initiative, the “connectivity strategy”, should also be prioritized as a “credible alternative” to OBOR.
By Gabriel Crossley