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New Silk Road Erupts in Paris, in High-Level Sino-European Forum

PARIS, Sept. 18, 2017 (Nouvelle Solidarité)—An exceptional Sino-European forum on China’s New Silk Road project took place in Paris, on Friday, Sept. 15, co-organized by the BOAO Forum for Asia (also called the Asian Davos) and the Prospective and Innovation Foundation headed by former French Prime Minister Jean-Pierre Raffarin. The Forum was a follow up to the May 14-15 Belt and Road Forum for International Cooperation in Beijing, where Raffarin represented President Emmanuel Macron, and was organized with the support of the authorities of both countries.

The 250 participants engaged in a thorough, full-day discussion on all aspects of the Chinese proposal. Introductory remarks were made by Raffarin, followed by the former Deputy Prime Minister of China Zeng Peiyan, current Vice President of the BOAO Forum; and by the President of the French Senate Gerard Larcher. This is the highest level Franco-Chinese event in a long time, and perhaps the most important event organized thus far on the New Silk Road project in a major Western European country, since President Xi Jinping launched the policy in 2013. Clearly, the organizers want it to succeed rapidly now in Western Europe.

The representation, in particular from the Chinese side, was very high level, with representatives of several of China’s main infrastructure, transport and engineering companies, but also financial and banking institutions, participating at the level of their presidents and vice presidents. From the Western side, speakers included the president of the European Bank for Reconstruction and Development (EBRD), as well as bankers (the Vice President of Barclays), fund managers and company CEOs. A Swiss company, AAQIUS, producing hydrogen cans to run electrical motors for small vehicles, signed a deal with a Chinese company on the sidelines of the Forum. Three roundtables dealt with infrastructure; trade and investment; and innovative financing to carry out those projects.

From all sides, this was a major effort, not only to describe the nature of the project, but to clear up any doubts, questions and concerns which have arisen in a depression-ridden and declining Europe, due to the enormity of the project and to its totally innovative quality. Since the Beijing Belt and Road Forum last May, the mainstream media and thinktanks, as well as strategists and important Sinologists, have come out denouncing the project as a geopolitical scheme from power-hungry China. President Macron, who is not an enemy of the project, nonetheless asked the European Union last June to define a strategy to forbid the takeovers of strategic companies and strategic infrastructure by foreign capital. At this point, it’s not clear whether they want to protect only the defense-sensitive companies, something that China does itself, or to hamper collaboration with the New Silk Road project as a whole. The danger, if the EU gets involved, is that it will try to establish an EU-wide negative position, including all the southern or eastern European countries that have developed close ties to China. Interestingly, thinktankers such as Barthélémy Courmont (IRIS), wonder if this is possible.

Addressing Doubts and Worries

Behind the scenes, all these issues were being addressed at this forum as reflected in an interview given by Raffarin to Xinhua, where he called on Europe "to take this historical project seriously ... and not fear entering into discussions." Trust, he insisted, is of the essence.

"In the uncertain world in which we stand, trust relations are very important.... China is opening up, participating in the international institutions, proposing partnerships. Let’s take the hand being offered and defend our interests; and I trust that our Asian partners will make a ‘win-win’ vision possible."

Conscious that the crisis is progressing, he called on Europe

"to defend this idea from within the process, rather than discussing it from the outside, because we would lose a lot of time. France and the other countries need rapid growth, this is why I’m favorable to a frank and rapid engagement, to be able to negotiate from within the process."

The President of the French Senate called for organizing workshops to make clear "investment conditions, opening of markets, codevelopment ethics, conditions of mutual respect."

From the Chinese side, Zeng went into a real pedagogy of the project, restating that China's Belt and Road Initiative (BRI) was launched in a depressed world economy after the 2007 crash, to "explore new growth motors for the world economy." It aims at realizing a

"common prosperity. It will never go back to the old mentality of political games, and will never aim at exporting a social system or a mode of development. It is not a geopolitical tool, nor an aid plan, but a platform of pragmatic cooperation and an initiative for interconnected development."

He also clarified that BRI was not

"about selling surplus capacities. The methods adopted by China to face up to the world financial crisis of 2008 contributed greatly to the jump-starting of the world economy, but they also lead to expansion of production capacities. To solve the problem, China decided to reduce its steel and coal production capacities by 150 million tons each, during the 3-5 years to come."

Zeng and other speakers insisted on the specific role of infrastructure which does not generate profit in the short term, but in the long term, and within the context of the overall development of a region. Aziz, former Pakistani Prime Minister, board member of the Boao Forum, also stressed this idea.

To note also: The roundtable presentations and discussions that dealt with financial means, didn’t go anywhere. Since the BRI is presented to the West as concerning mainly private companies, the role of the state being relegated only to the creation of conditions in which these private companies can invest, there was no discussion about "public investment tools," or even "sovereign funds" which are close to what is needed. Discussion on reliance on crowd funds, ended rather quickly, as most of the roundtable participants accepted that crowd funds would only be applicable to small and medium-sized enterprises (SMEs). The same was true of the proposal to use Fintech funds, as several people admitted to not knowing what these are. In France, the public sovereign fund CDC is already using what they call counterpart funds to assemble 50-50 funds with the Chinese. In that context, the Chinese financed €1 billion of the Greater Paris investments, while the CDC raised another €1 billion in French funds.