China's Belt and Road Initiative Faces 'Ssamyeon Choga' Crisis

EU and Three Indian Countries Collaborate on Infrastructure Development... Australia Cancels Projects with China
China Immediately Protests Unilateral Cancellation... US Intensifies Pressure with China Containment Legislation

[Asia Economy Beijing=Special Correspondent Cho Young-shin, Reporters Kim Su-hwan, Park Byung-hee] China’s overseas infrastructure development project, the Belt and Road Initiative, is facing a crisis. As Australia has decided to cancel the Belt and Road projects it signed with China, the European Union (EU) and India are discussing joint infrastructure cooperation plans with third countries that could impact the Belt and Road. It is understood that moves to check China through cooperation among democratic countries under the ‘Democracy Alliance’ advocated by U.S. President Joe Biden are spreading comprehensively. Meanwhile, the U.S. Congress is strengthening pressure on China by consecutively preparing bills targeting China.

According to major foreign media on the 21st (local time), the EU and India are discussing plans to jointly promote infrastructure development projects not only between the EU and India but also in third countries across various fields such as energy, digital technology, and transportation. Specific funding methods and implementation plans are expected to be announced at the EU-India virtual summit on the 8th of next month.

This is expected to directly or indirectly deal a blow to China’s Belt and Road Initiative. An EU diplomat said, "By offering favorable conditions to investment target countries, we expect to provide a more attractive alternative than the Belt and Road Initiative," adding, "It can play a role in checking China’s dominance of global capital."

The EU and India’s push for infrastructure development cooperation is notable as it comes amid the stagnation of the Comprehensive Agreement on Investment (CAI) signed with China in December last year. The CAI, concluded after more than seven years of negotiations, aims to improve market access for EU companies in China, which is emerging as the world’s largest market. However, due to human rights issues concerning the Uyghur population in the Xinjiang region, the European Parliament suspended discussions on CAI approval last month.

The Australian government announced on the 21st that it will completely cancel the Belt and Road project contracts signed between its state of Victoria and China. Australian Foreign Minister Marise Payne explained in a statement that "this agreement does not align with Australia’s foreign policy and is considered negative for our diplomatic relations." China and the Victoria state government signed two memorandums of understanding (MOUs) related to the Belt and Road Initiative in 2018 and 2019.

China immediately protested. The Chinese state-run Global Times, citing Chinese experts, said the bilateral relationship has reached a critical juncture and warned that Australia’s economy would suffer serious damage due to the unilateral cancellation of the MOUs. Chen Hong, director of the Australia Research Institute at East China Normal University, said, "This MOU termination should be seen as an official act and provocation by the Australian government," warning, "China will definitely respond accordingly."

In the U.S. Congress, bills to strengthen pressure on China are being prepared one after another. The U.S. Senate Foreign Relations Committee passed the ‘Endless Frontiers Act’ on the same day. The bill includes $100 billion in funding over the next five years for research and development (R&D) in computing, artificial intelligence (AI), core technologies, and manufacturing sectors. Since these are fields where China is also increasing investment, the bill is widely seen as targeting China. U.S. President Joe Biden recently emphasized investment, saying the U.S. must not fall behind in competition with China. The Foreign Relations Committee also passed the ‘Strategic Competition Act’ on the same day, which includes a ban on sending government delegations to the Beijing Winter Olympics next February.

Bloomberg diagnosed that there is a broad bipartisan consensus in the U.S. Senate that the growing economic and strategic influence of China must be countered.

This content was produced with the assistance of AI translation services.