A version of this analysis was originally published by the Italian Study Centre on Contemporary China – Centro Studi sulla Cina Contemporanea (CSCC) in Italian.

On December 1st, 2021, the European Commission launched the Global Gateway, a plan that aims to mobilise up to €300 billion in infrastructure investments by 2027. Such an initiative has become the cornerstone of the EU’s strategy to expand the reach of its economic statecraft and is in line with the Von der Leyen Commission’s objective to make the EU a first-tier geopolitical actor in the international affairs. This article will focus on the EU’s economic statecraft in the Asia Pacific. This region is rapidly expanding in its importance for Brussels, not only because 40 per cent of the European trade now passes through the South China Sea, but, as the High Representative for Foreign Affairs Josep Borrell wrote, “the history of the 21st century will be written to a great extent in Asia”. The first element to note in this regard is that implementing the Global Gateway will not be an easy task. The Commission will have to face challenges: specifically, there are already several rival infrastructural plans that are part of a broader context of competition between the US and China. Thus, what role can the EU’s economic statecraft play in the Asia-Pacific given the already saturated nature of the region’s trade.

US and Chinese Competition

It is useful to draw an overview of the landscape in which the Global Gateway takes place, in particular of the competing geoeconomic strategies adopted in the region by both the US and China. The Belt and Road Initiative (BRI), launched by Xi Jinping in 2013, aims at connecting China with the rest of Asia, Africa, and Europe. Concretely, it translates into two trillion USD of planned Chinese infrastructure investments extending to 138 countries, 4.4 billion people, 30 per cent of the world’s GDP, and 70 per cent of the global energy reserves. Being included in the “Maritime Silk Road”, the Asia-Pacific attracts a considerable share of BRI investments. For example, as of 2018, Beijing has invested $735 billion in ASEAN countries alone.

In contrast, Washington launched the Build Back Better World (B3W) through the G7 in June of 2022, a plan to foster investment in health, digital technology, gender equality and climate sustainability. It is worth noting that Washington’s initiative has been often received as the US’s direct response to China’s BRI. Indeed, as the related White House press release states, the pillar of the B3W are the values of freedom and cooperation between the main world democracies. In other words, it is part of the Biden administration’s strategy to frame the competition between the US and China as one between democracy and autocracy. Coupled with Beijing’s more markedly assertive foreign policy under Xi Jinping (the wolf warrior diplomacy being the latest example) this has led to a surge in regional tensions between the two great powers.

An EU Framework

Thus, the EU’s economic statecraft in the Asia-Pacific takes place in a context of rising tensions. Financed through the European Fund for Sustainable Development Plus (EFSD+), Member countries’ ODA and private capital, the Global Gateway aims to mobilise €300 billion by 2027. At first sight, it appears similar to the Chinese and US plans. Indeed, like the other initiatives, it is focused on strengthening the transport, digital, and energy cross-regional infrastructure. Its implementation would bring concrete benefits to Europe:  more resilient global supply chains and an increase in trade with a region that contributes to 57 per cent of global GDP growth in 2021. Secondly, this would augment the EU’s influence in the Asia-Pacific, allowing Brussels to emerge as an economic power in the region. However, the strong point of the Union’s strategy is the importance it gives to its infrastructural projects to respect the high European standardsconcerning climate sustainability, fiscal stability, free competition among firms, and personal data protection. In other words, the EU’s projects in the Asia-Pacific will be directed at fostering the transitions to a cleaner economy and climate neutrality, in line with the European Green New Deal and the Paris Agreements. Moreover, it emphasises respect for the rule of law and the human and social rights of workers, which are among the fundamental principles of the EU, as established in article 2 of the Treaty on the European Union. Finally, the digital infrastructure built with the EU’s funds will guarantee access to a free, plural, and safe internet, in line with the General Data Protection Regulation (GDPR). The adoption of the European regulatory model in Asia-Pacific, and the consequent convergence to the EU standards, will lead to a growth in Brussel’s soft power and its geopolitical influence. Its prestige as a global regulatory power will be strengthened.

Finding the gap in the market

What strategy should the EU follow to maximise the efficacy of its economic statecraft in the region and avoid being overwhelmed by the US-China competition? The key for Brussels is to achieve strategic autonomy which is to be focused on an EU-centred strategy, separate from that of the US or China. In other words, the objective for Europe should be, first and foremost, the achievement of its own interests and values, pragmatically cooperating both with Washington and Beijing depending on the circumstances. This is because the challenges of today’s world, from pandemics to climate change, require a multilateral approach that includes the largest number of stakeholders possible. Secondly, the serious need for infrastructural investments to sustain the economic growth of Asian countries - $800 billion a year according to the Asian Development Bank - demands cooperation between the investment plans of the EU, China and the US, since no state can unilaterally invest such a large sum of money. For these reasons it is advisable that:

1.     Brussels should cooperate with the US based on their common values, such as democracy, the rule of law, transparency, human rights and fiscal and financial sustainability. The Global Gateway and the B3W can be integrated to implement shared projects that respect these standards. The fact that the Union is a member of the G7 can be a tool through which Brussels can influence the B3W (an initiative of the G7) so that to promote European norms and the EU regulatory power through B3W initiatives as well. However, Brussels should make sure that it does not get involved in Washington’s anti-China narrative, which is not in the EU’s interest. Indeed, this prevents any type of multilateral cooperation -that also includes Beijing- to tackle the new global challenges.

2.     At the same time, Europe should use the convergence with China regarding their long-term interests - such as the fight against climate change and the achievement of the UN Sustainable Development Goals (SDGs) - to integrate the Global Gateway and the BRI. The EU-China Connectivity Platform (EUCCP) and the membership of the Union to the Asian Infrastructure Investment Bank (AIIB), the development bank established by China to finance BRI projects, are steps forward in this direction. However, the values underpinned by Brussels and Beijing are considerably different, especially concerning human rights, democracy and digital standards. In this regard, the EU should follow the principle of “cooperate with China when possible; but, when necessary, offer Asia-Pacific countries an alternative to China based on European standards”.

This strategy would allow the European Union to maximise the efficacy of its economic statecraft, without being overwhelmed by the tensions between the US and China. In such a competition, Asia-Pacific countries, and especially Asian ones, do not want to be forced to take the sides with Beijing -their main economic partner- nor with Washington – who is often the main security partner. By emerging as a genuine third option, the EU can emerge as an influential geopolitical actor in the region.