10/26/15 10/26/15

2015 at Dawn.com)

President Xi Jinping’s recent trip to the United States grabbed global headlines. By going to Britain, the Chinese leader has sent an equally important signal of his interests and determination in deepening and expanding China’s ties with Britain — but also with Europe.Beijing and Washington certainly need to talk to each other on a range of bilateral and international issues. And the Sino-American agreements reached on cybersecurity and climate change will help ease relations between the world’s two leading political and economic actors.But President Xi and Prime Minister Li Keqiang’s many visits to Brussels, Paris and Berlin this year — and now Xi’s high-profile trip to Britain — underline that China and Europe have also made a strategic choice to further develop and expand relations.China’s focus on Europe and on Britain is important for several reasons. Tackling challenges in a multipolar and multi-complex world requires more than cooperation between China and the US. It also demands working in tandem with the European Union and its 28 member states.Britain, given its global role and influence is, of course, especially important. President Xi’s visit, including his high-level meetings, underline to a watching world — and to the rest of Europe — that China still views Britain as a key international player.Significantly, Xi’s visit follows a trip to China by UK Chancellor George Osborne last month, during which he said Britain should be China’s “best partner in the West”.It’s not just Britain that wants closer ties with China, however. Germany remains a strong contender for the title of Beijing’s ‘best friend’ in Europe. And more generally while relations between China and individual EU states are important, ties with the EU are also improving, with the launch of the connectivity platform and the agreement to cooperate on developing 5G networks.Europe certainly has the markets China needs for its exports — and trade is still booming. European expertise and know-how is critically important to help meet China’s urbanisation, climate, innovation and other developmental challenges. Most recently, there is a focus on synergies between the ‘One Belt, One Road’ project and Europe’s own investment blueprint for transport, digital and technology networks. Britain and British companies have a key role to play in such cooperation, both on a bilateral level but also through the EU.True, the EU’s many recent crises have eroded much of its lustre. Last year has been especially difficult as EU leaders have grappled with continuing troubles in the Eurozone, struggled to tackle the influx of refugees fleeing war and conflict in Syria and Africa while also dealing with longer-term problems of low growth and high unemployment.For the next few months, the focus in London, Brussels and in other EU capitals will be on Britain and the country’s upcoming referendum on its membership of the EU.The EU is hoping that Britain will opt to stay in. And while no EU leader would say so in public, many are clearly hoping that President Xi gives a clear but subtle message to British citizens to vote in favour of EU membership. As such, it is especially significant that the Chinese president has met leaders of the opposition parties and parliamentary leaders.But that’s not the only reason that the EU kept a close watch on President Xi’s speeches and meetings in Britain. China-watchers in Brussels and elsewhere in the EU wanted to learn more about the state of the Chinese economy after the market volatility over the summer and what to expect as China’s development priorities in the upcoming 13th Five-Year Plan.Meanwhile, Xi’s speech in London provided further insight into China’s hopes for the internationalisation of the renminbi and also information on China’s priorities as it prepares to take over as chair of the G20.Certainly as in other EU capitals, the focus was on business, with Britain looking for Chinese investments in key projects such as a high speed rail line in the north of the country and a deal on Chinese investments in the Hinkley Point C nuclear plant. The UK is now China’s largest investment destination country in Europe.More investment opportunities for Chinese companies opened up in the railway, energy, aviation and telecommunications industries. Significantly, leading the way for other European countries, Britain joined the Chinese-led Asian Infrastructure Investment Bank (AIIB), despite opposition from Washington, earlier this year. Within the EU, Britain’s opinion is important as the EU and China negotiate their Bilateral Investment Treaty and will be even more important if and when the two sides start discussions on a Free Trade Agreement.There used to be a time not so long ago when China’s friendships with individual EU member states were viewed with suspicion by Brussels. This was especially the case as regards China’s ‘special relationship’ with Germany and the burgeoning ties between Beijing and the Central and Eastern European states. Fortunately, such unease is now mostly over, with many policymakers agreeing that stronger bilateral ties between China and the individual EU member states — including Britain — help to consolidate and deepen the wider EU-China relationship.

12/2/14 12/2/14

View from Abroad: A new plan to revive 'Granny Europe' (Originally published 29/11/2014 at dawn.com)

Not much gets Europeans excited these days. When challenges emerge — at least on the foreign policy front — the reaction seems to be almost always the same. Problems with Russia? Let’s expand sanctions. Iran? Let’s keep sanctions. Islamic State? Let’s impose sanctions although just how and on whom is not clear.But suddenly, out of the blue, there is a bit of a buzz in the winter air. Europeans woke up on Nov 26 with a new “hero”: European Commission President Jean Claude Juncker who strode on to centre stage to promise peace — or at least jobs — in our time.It was a seminal moment. For Juncker and Europe.The former Luxembourg prime minister is facing allegations that hundreds of multi-national firms were reportedly attracted to Luxembourg in legal tax avoidance schemes. Juncker was prime minister at the time but denies wrongdoing. The new plan has the advantage of taking the almost-scandal off the media radar.For Europe, the plan could be the answer to its dreams of revival. The 28-nation bloc is still struggling to climb out of a long and painful Eurozone crisis. Growth rates are low, unemployment is tragically high, especially among young people. People are downbeat and dejected. Even the German economy is beginning to flag.To top it all, making pessimists even more downbeat, in a speech to the European Parliament last week, Pope Francis likened Europe to a grandmother, “no longer fertile and vibrant”. (I’m not sure he’s talking about the lively grannies I know though…)Anti-granny remarks aside, the pontiff’s remarks do resonate for many. Europe is getting a tad worn out, depressed and haggard. A shot of vitamins is badly needed.Enter Juncker with a magic bullet: a 315 billion euro plan to spend EU money on new infrastructure projects as part of an initiative to revive granny and help Europe grow and thrive again.Only, there is no magic involved. There will be hardly any new money — only €21bn in EU funds as a guarantee to raise private cash in the capital markets — with the rest of the money expected to come from private sources.EU policymakers say they will be looking for funds wherever they can. Chinese investments will be sought out avidly. Middle East investors will be welcome.“I often hear we need so-called fresh money. But we need a fresh start and fresh investment,” Juncker told the European Parliament this week. “We will not betray our children and grandchildren by writing cheques they ultimately will have to pay.”With one eye on developments across the Atlantic, the Commission chief moaned that “While investment is taking off in the US, Europe is lagging behind. Why? Because investors lack confidence, credibility and trust.”The Commission is making up for the lack of solid details on the plan by upping the hype. Juncker says the initiative represents a cornerstone of efforts to revive an ailing economy.Others have called it a historic moment, a make-or-break initiative, a European “New Deal” to get Europeans working again.Certainly, the timing is right. Many European economists have been saying for some time Europe needs to move from the current focus on austerity to programmes which bring back growth.And the best way to do so is to start investing again — especially in infrastructure.The Commission believes it could create up to 1.3 million jobs with investment in broadband, energy networks and transport infrastructure, as well as education and research.National governments could contribute to the fund if they wished and would be asked to come up with a list of projects with “high socio-economic returns” that could kick-off between 2015 and 2017.With a nod to Martin Luther King, Juncker added that he had a dream. He wanted to see schoolchildren walking into a brand new classroom equipped with computers in the Greek city of Thessaloniki, European hospitals saving lives with state of the art medical equipment and French commuters charging electric cars on motorways.The good news is that pro-austerity Germany — the bane of countries like France and Italy which want the EU to start spending itself out of economic stagnation — is in favour of the plan.But EU officials admit the initiative will not fill the gap in the amount of investments needed, especially in infrastructure across Europe. There is also concern that there will not be enough credible projects around for investors to put their money into.The European Investment Bank will be the “prime mover” in delivering seed money for those investments over the next three years. The plan will now be discussed by the 28 EU leaders at the Dec 18-19 summit.Juncker’s shift from austerity and cutting debt to investment is not going to be the botox shot needed to transform “Granny Europe” into a vibrant young woman. But it is a start.