European companies have been by and large excluded from the Belt and Road Initiative (BRI) because of the dominant role of China’s state-owned enterprises and obscure bidding processes, a recent survey by the European Chamber has found. Only a small number of European companies in China are involved in President Xi Jinping’s BRI, the EU Chamber of Commerce in China said on Thursday (30 January), raising questions specifically about transparency as a top challenge European companies face and generally about the country’s commitment to opening the program to the world. The survey has also found that slightly more European companies have experienced positive knock-on effects through access to new logistics options and increased trade flows with countries hosting the BRI projects.
“One of the most notable aspects about BRI-related projects is that they are rarely transparent,” the European Chamber’s report said, adding that in light of the BRI’s sheer scale, most European companies referred to their level of involvement as “crumbs from the table.” Only 20 respondents to the survey, out of a total of 132, indicated they had bid on at least one BRI-related project, with seven bidding as direct contractors and 13 as subcontractors. Most of them ended up being involved in the project but only after being ‘co-opted’ either by their Chinese business partners or the government. The report also points out that almost all of these European businesses have played niche roles, like providing certain technology.
“China’s colossal national champions – boosted by state-aid and cheap financing – are securing an unusually large proportion of contracts when compared to multilateral development schemes,” said European Chamber president Joerg Wuttke, urging Europe “to determine how to respond to this export of the China model to shield itself from market distortions and stay competitive in third-country markets.” Responding to these allegations, China foreign ministry spokesman Geng Shuang said that both Chinese and foreign companies participating in the BRI-related projects followed market rules “based on the principle of fairness”, adding that “the bidding process is transparent.” The European Chamber report comes, as Xi’s BRI has attempted to clean up its image tarnished by criticism that it’s a debt trap for poor countries and allegations of corruption.
