Compared to Xi Jinping’s BRI summit in Beijing, the European counterpart forum Global Gateway in Brussels on Wednesday had a more understated feel. The stage was simple, and the number of participants was manageable. Quite different from the extravagant summit in Beijing last week.
The projects agreed upon also demonstrated that the EU’s infrastructure plan is far from being a real alternative to Beijing’s Belt and Road Initiative. However, they are a good start. Find out why the Brussels forum brings the much-anticipated momentum for Global Gateway to finally (!) move beyond the early stages in Amelie Richter’s Feature.
The Chinese tech giant Huawei continues to face suspicion in Europe and the US. In Germany, the use of Huawei technology is expected to be heavily restricted, with a potential ban in certain critical infrastructure sectors.
For a while now, the Chinese company has been searching for new partners. Management found exactly that, interestingly, in the Middle East. In Dubai, the company recently introduced an improved version of the 5G standard. Its increased computing power is said to be necessary for AI applications and autonomous vehicles. Joern Petring has explored what this could mean for Europe.
The EU announced the signing of dozens of agreements with partner countries during the first Global Gateway Forum. In collaboration with the USA, Brussels aims to lay the foundation for a corridor connecting the Democratic Republic of the Congo and Zambia to the Atlantic Ocean.
This route will pass through Angola to the port of Lobito and then connect the countries to global markets, as reported by Bloomberg, citing individuals familiar with the matter. This is one of the typical projects in competition with China, specifically concerning access to raw materials.
Jean-Michel Sama Lukonde Kyenge, Prime Minister of the DR Congo, was invited to speak about critical raw materials at the EU Infrastructure Initiative forum on Wednesday. This session was also attended by José de Lima Massano, State Minister for Economic Coordination in Angola, and Zambian Finance Minister Situmbeko Musokotwane.
The memorandum of understanding for the development of the corridor is expected to be signed during the forum in Brussels. The EU and the USA had already announced last month that the initial steps would include feasibility studies for a new railway expansion between Zambia and Angola.
The DR Congo is the world’s largest producer of cobalt and competes with Peru for the position of the second-largest copper producer. This is largely due to increased Chinese investments in recent years. Zambia is also rich in copper.
Whether the African corridor project will be successful remains uncertain. The implementation of the EU and USA’s recently announced connectivity initiative for the India-Middle East-Europe Economic Corridor (IMEEC) is now in question due to the Israel-Hamas conflict.
Brussels aims, through Global Gateway, to provide an alternative to China’s Belt and Road Initiative (BRI) in third countries. The BRI summit brought together representatives from around 130 countries in Beijing last week, with Russia’s President Vladimir Putin as the guest of honor.
While not mentioning China directly, EU Commission President von der Leyen made references to China’s practice of demanding local infrastructure or ports as collateral for Chinese loans: “No country should be faced with a situation where the only way to finance its essential infrastructure is to sell its future,” she said at the opening of the forum in Brussels. In the audience were Albanian Prime Minister Edi Rama, Bangladeshi Prime Minister Sheikh Hasina and Senegal’s President Macky Sall.
A multitude of signings is planned during the forum, including:
Compared to the decade-old Belt and Road Initiative, the EU’s infrastructure plan is still in its early stages, with few concrete new projects. Many of the initiatives are still from previous projects. Global Gateway initially faced challenges within the EU Commission regarding jurisdiction, and EU capitals were uncertain about how to handle this initiative.
Global Gateway is complex because it aims to mobilize financial resources from member states, multilateral organizations like the EIB and the European Bank for Reconstruction and Development, as well as the private sector.
The first day of the forum, with its announced project plans, offers hope for rapid progress. Tobias Bacherle, Green Party member of the German Bundestag and a member of the Foreign Affairs Committee, stated, “The ‘Global Gateway’ forum in Brussels is off to a good start. Now it’s crucial that the initiative leads to concrete projects that benefit people on the ground.” He added that “Global Gateway” must fill global supply gaps and strengthen the sovereignty of partner countries instead of deepening their dependencies.
Ulrich Ackermann, Head of Foreign Trade at the German Engineering Federation (VDMA), expressed optimism: “It is gratifying that the ‘Global Gateway’ initiative is finally gaining momentum, and the European Union has invited numerous heads of state and government to the infrastructure summit in Brussels.”
Ackermann believes that the EU could become a true geopolitical player in Africa, Asia and Latin America. However, he emphasized that the proposed 300 billion euros from “Global Gateway” are far from sufficient to bridge the global infrastructure gap.
EU Commission President von der Leyen had repeatedly emphasized that China’s BRI is clearly intended to counter the European initiative. Before the start of the forum, a media report had caused a stir, suggesting that the EU Commission had unwittingly brought Chinese connections into the newly established corporate body.
One of the 60 members is the Portuguese energy company EDP, in which China Three Gorges (CTG) is the largest single shareholder with 20 percent, the South China Morning Post reported. The panel is to advise the EU on Global Gateway projects.
EU Commission spokesperson Eric Mamer rejected criticism of EDP’s inclusion in the forum. It was noted that China Three Gorges (CTG) owns 20 percent of EDP. This was reported by the South China Morning Post. The group is to advise the EU on Global Gateway projects.
The forum will continue on Thursday, with EU politicians and representatives from potential partner countries discussing topics such as health and digital infrastructure. EU High Representative Josep Borrell and Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization, along with government leaders from Croatia, Serbia, and Estonia, among others, will participate. The closing plenary session is on the agenda for midday.
Chinese telecommunications giant Huawei has officially announced the launch of an even faster mobile internet. According to the company, at the Mobile Broadband Forum in Dubai a few days ago, Huawei presented a “complete portfolio of 5.5G products” for the first time. Thirteen leading network operators used the forum to announce the construction of 5.5G networks in collaboration with Huawei.
5.5G, also known as 5G-Advanced, is expected to be an improved version of the current 5G standard. Companies such as Nokia and Ericsson are also working on similar products. The technological leap is remarkable: 5.5G is projected to offer about ten times the performance of 5G. In the downlink, the peak rate for 5.5G will increase to 10 Gbit/s, compared to 100 Mbit/s. Latency times are also expected to decrease further.
Notably, Huawei, which faces skepticism and even rejection from governments in the US and Europe, seems to be targeting customers in the Middle East and the Arabian Peninsula with its new technology.
Among the network operators named by Huawei as cooperation partners are Chinese companies as well as Zain KSA and Du from the United Arab Emirates, Ooredoo Kuwait and Omantel from Oman. The development of the new 5.5G network by Huawei is likely to progress particularly quickly in this region.
In Dubai, Huawei outlined a range of applications for the new technology:
Huawei has recently been successful in the region with other projects as well. The company launched a cloud service with a data center in Riyadh, designed to provide public cloud services to customers in Saudi Arabia and other parts of the Middle East, North Africa and Central Asia.
While Huawei is expanding its future portfolio in Dubai, it continues to face challenges in Europe. Two weeks ago, Huawei filed an objection against Spanish government regulations that could prevent the company from receiving substantial state aid for developing 5G networks in rural areas of the country.
Measures are also being discussed in Germany that would require telecommunications operators to remove critical components from Chinese providers, including Huawei and ZTE, from their networks by 2026. Already, the UK, Denmark, Sweden, Estonia, Latvia and Lithuania have banned Huawei from their 5G networks. Just like the Chinese government, Huawei is actively seeking partners outside the Western sphere.
China introduced the astronauts on Wednesday who are set to embark on a mission to the Tiangong space station on Thursday. It is the youngest astronaut team in the history of Chinese space travel, according to officials from the space agency in Beijing. The Chinese astronauts Tang Hongbo, Tang Shengjie, and Jiang Xinlin will carry out the space mission Shenzhou-17. Tang Hongbo, the only crew member with space experience, will serve as the mission commander, according to the China Manned Space Agency (CMSA). Tang participated in the construction of the Chinese space station during the Shenzhou-12 mission in 2021, which lasted for three months.
The manned spacecraft Shenzhou-17 is scheduled to launch at 11:14 a.m. (Beijing time) on Thursday from the Jiuquan Satellite Launch Center in northwestern China, said Lin Xiqiang, deputy director of the CMSA. The crew is expected to spend about six months in orbit. This is the 30th space mission and the twelfth manned mission since the launch of the People’s Republic’s manned space program. By the end of the decade, China also aims to conduct a manned mission to the moon. fpe
India has long been viewed as an “eternal future market”, with double-digit growth rates sparking hope, only to be extinguished shortly after due to structural obstacles. The question of “India – the new China?” regarding India as a future economic power is not new. However, recent geopolitical shifts have significantly changed the answer.
India’s ambition to catch up economically is substantial. It aims to become a developed nation by 2047. According to government reports, it has tripled infrastructure investments in the national budget from approximately 6.8 billion euros in 2019 to nearly 22 billion euros in 2023. Targeted government initiatives like the “Make In India” campaign and production-linked incentive schemes aim to attract foreign investors to the country and increase the manufacturing sector’s contribution to GDP to 25 percent.
Federal obstacles, such as tariffs between states and non-uniform value-added taxes, have been abolished. Past bottlenecks, like inadequate infrastructure and federal bureaucracy, are being systematically addressed. Sustainable growth is a top priority for Prime Minister Narendra Modi.
In particular, incentives for foreign investors fall on fertile ground in the geopolitical situation. India’s positive macroeconomic outlook stands out. Many economies are suffering from long-term consequences of the pandemic, the Ukraine war and rising interest rates.
Even China, the long-time global growth engine and workshop, is grappling with weak consumption, a real estate crisis, and, consequently, lower growth rates. Meanwhile, India appears to be growing seemingly untouched. The International Monetary Fund (IMF) expects India’s economy to grow by more than six percent in 2023, and even stronger in 2024.
This development is new; traditionally, China has been the more attractive market. Given the erratic COVID-19 policies of the past two years, many investors now view the Indian market as politically more stable. Concerns about military escalation in the Taiwan Strait also add to the perception.
With the backdrop of the Ukraine conflict, sanctions against Russia, and increasing uncertainties related to China, businesses, investors, and governments worldwide are looking for new opportunities under the buzzword “diversification”.
They find India to be adeptly navigating the complex geopolitical landscape. In the same year it hosts the G20 summit, India has expressed support for a multipolar world and the inclusion of new states in the BRICS group at the BRICS summit. The country did not participate in Western sanctions against Russia, and Russian oil imports to India have increased since the beginning of the Ukraine conflict. Yet, the West continues to woo India as the largest democracy in Asia and a geopolitical counterbalance to China.
India has embraced the zeitgeist. For instance, its production-linked incentive schemes focus on key technologies that the West is looking to diversify from China. Besides electronic products, cars, and auto parts, sectors where China currently dominates the world market, such as solar panels and drones, are also being promoted. Some companies, like Foxconn, have already heeded the call for diversification and announced plans to expand their production in India.
German companies are also optimistic. According to the German Mechanical Engineering Industry Association (VDMA), German machinery manufacturers significantly increased their exports to India (up 28 percent) and imports from India (up 37 percent) last year.
As of June 2023, 71 percent of the companies in India expected an increase in their revenues, according to a study by AHK India. Fifty-two percent plan to further expand their investments, citing political stability, a qualified workforce, and relatively low labor costs as reasons.
Whether this positive sentiment is justified and if India’s economy can genuinely become an alternative to China remains to be seen. However, if reforms continue to advance and India maintains political stability, there’s nothing stopping India’s rise.
This contribution is part of the “Global China Conversations” event series at the Kiel Institute for the World Economy (IfW). On Thursday, October 26, 2023 (11:00 AM CEST), author Moritz Schularick, Stefan Halusa, and Florian Wenke will discuss the topic: “Diversification – Can India Be an Alternative to China?” China.Table is the media partner for the event.
Moritz Schularick is the President of the Kiel Institute for the World Economy. He has taught macroeconomics at the University of Bonn and was the Director of the MacroFinance Lab there. He has also been a professor at Sciences Po (Paris).
Silas Dreier is the Coordinator of the Global China Conversations at the China Initiative of the Kiel Institute for the World Economy. He is also pursuing a master’s degree in China Business and Economics at the University of Wuerzburg.
The fast-food chain Pizza Hut is famous (or infamous) in Taiwan for its unusual topping combinations. In line with Halloween, they now offer this subtly spooky pizza with stuffed ghost-shaped rice pockets and cooked chicken feet.
Compared to Xi Jinping’s BRI summit in Beijing, the European counterpart forum Global Gateway in Brussels on Wednesday had a more understated feel. The stage was simple, and the number of participants was manageable. Quite different from the extravagant summit in Beijing last week.
The projects agreed upon also demonstrated that the EU’s infrastructure plan is far from being a real alternative to Beijing’s Belt and Road Initiative. However, they are a good start. Find out why the Brussels forum brings the much-anticipated momentum for Global Gateway to finally (!) move beyond the early stages in Amelie Richter’s Feature.
The Chinese tech giant Huawei continues to face suspicion in Europe and the US. In Germany, the use of Huawei technology is expected to be heavily restricted, with a potential ban in certain critical infrastructure sectors.
For a while now, the Chinese company has been searching for new partners. Management found exactly that, interestingly, in the Middle East. In Dubai, the company recently introduced an improved version of the 5G standard. Its increased computing power is said to be necessary for AI applications and autonomous vehicles. Joern Petring has explored what this could mean for Europe.
The EU announced the signing of dozens of agreements with partner countries during the first Global Gateway Forum. In collaboration with the USA, Brussels aims to lay the foundation for a corridor connecting the Democratic Republic of the Congo and Zambia to the Atlantic Ocean.
This route will pass through Angola to the port of Lobito and then connect the countries to global markets, as reported by Bloomberg, citing individuals familiar with the matter. This is one of the typical projects in competition with China, specifically concerning access to raw materials.
Jean-Michel Sama Lukonde Kyenge, Prime Minister of the DR Congo, was invited to speak about critical raw materials at the EU Infrastructure Initiative forum on Wednesday. This session was also attended by José de Lima Massano, State Minister for Economic Coordination in Angola, and Zambian Finance Minister Situmbeko Musokotwane.
The memorandum of understanding for the development of the corridor is expected to be signed during the forum in Brussels. The EU and the USA had already announced last month that the initial steps would include feasibility studies for a new railway expansion between Zambia and Angola.
The DR Congo is the world’s largest producer of cobalt and competes with Peru for the position of the second-largest copper producer. This is largely due to increased Chinese investments in recent years. Zambia is also rich in copper.
Whether the African corridor project will be successful remains uncertain. The implementation of the EU and USA’s recently announced connectivity initiative for the India-Middle East-Europe Economic Corridor (IMEEC) is now in question due to the Israel-Hamas conflict.
Brussels aims, through Global Gateway, to provide an alternative to China’s Belt and Road Initiative (BRI) in third countries. The BRI summit brought together representatives from around 130 countries in Beijing last week, with Russia’s President Vladimir Putin as the guest of honor.
While not mentioning China directly, EU Commission President von der Leyen made references to China’s practice of demanding local infrastructure or ports as collateral for Chinese loans: “No country should be faced with a situation where the only way to finance its essential infrastructure is to sell its future,” she said at the opening of the forum in Brussels. In the audience were Albanian Prime Minister Edi Rama, Bangladeshi Prime Minister Sheikh Hasina and Senegal’s President Macky Sall.
A multitude of signings is planned during the forum, including:
Compared to the decade-old Belt and Road Initiative, the EU’s infrastructure plan is still in its early stages, with few concrete new projects. Many of the initiatives are still from previous projects. Global Gateway initially faced challenges within the EU Commission regarding jurisdiction, and EU capitals were uncertain about how to handle this initiative.
Global Gateway is complex because it aims to mobilize financial resources from member states, multilateral organizations like the EIB and the European Bank for Reconstruction and Development, as well as the private sector.
The first day of the forum, with its announced project plans, offers hope for rapid progress. Tobias Bacherle, Green Party member of the German Bundestag and a member of the Foreign Affairs Committee, stated, “The ‘Global Gateway’ forum in Brussels is off to a good start. Now it’s crucial that the initiative leads to concrete projects that benefit people on the ground.” He added that “Global Gateway” must fill global supply gaps and strengthen the sovereignty of partner countries instead of deepening their dependencies.
Ulrich Ackermann, Head of Foreign Trade at the German Engineering Federation (VDMA), expressed optimism: “It is gratifying that the ‘Global Gateway’ initiative is finally gaining momentum, and the European Union has invited numerous heads of state and government to the infrastructure summit in Brussels.”
Ackermann believes that the EU could become a true geopolitical player in Africa, Asia and Latin America. However, he emphasized that the proposed 300 billion euros from “Global Gateway” are far from sufficient to bridge the global infrastructure gap.
EU Commission President von der Leyen had repeatedly emphasized that China’s BRI is clearly intended to counter the European initiative. Before the start of the forum, a media report had caused a stir, suggesting that the EU Commission had unwittingly brought Chinese connections into the newly established corporate body.
One of the 60 members is the Portuguese energy company EDP, in which China Three Gorges (CTG) is the largest single shareholder with 20 percent, the South China Morning Post reported. The panel is to advise the EU on Global Gateway projects.
EU Commission spokesperson Eric Mamer rejected criticism of EDP’s inclusion in the forum. It was noted that China Three Gorges (CTG) owns 20 percent of EDP. This was reported by the South China Morning Post. The group is to advise the EU on Global Gateway projects.
The forum will continue on Thursday, with EU politicians and representatives from potential partner countries discussing topics such as health and digital infrastructure. EU High Representative Josep Borrell and Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization, along with government leaders from Croatia, Serbia, and Estonia, among others, will participate. The closing plenary session is on the agenda for midday.
Chinese telecommunications giant Huawei has officially announced the launch of an even faster mobile internet. According to the company, at the Mobile Broadband Forum in Dubai a few days ago, Huawei presented a “complete portfolio of 5.5G products” for the first time. Thirteen leading network operators used the forum to announce the construction of 5.5G networks in collaboration with Huawei.
5.5G, also known as 5G-Advanced, is expected to be an improved version of the current 5G standard. Companies such as Nokia and Ericsson are also working on similar products. The technological leap is remarkable: 5.5G is projected to offer about ten times the performance of 5G. In the downlink, the peak rate for 5.5G will increase to 10 Gbit/s, compared to 100 Mbit/s. Latency times are also expected to decrease further.
Notably, Huawei, which faces skepticism and even rejection from governments in the US and Europe, seems to be targeting customers in the Middle East and the Arabian Peninsula with its new technology.
Among the network operators named by Huawei as cooperation partners are Chinese companies as well as Zain KSA and Du from the United Arab Emirates, Ooredoo Kuwait and Omantel from Oman. The development of the new 5.5G network by Huawei is likely to progress particularly quickly in this region.
In Dubai, Huawei outlined a range of applications for the new technology:
Huawei has recently been successful in the region with other projects as well. The company launched a cloud service with a data center in Riyadh, designed to provide public cloud services to customers in Saudi Arabia and other parts of the Middle East, North Africa and Central Asia.
While Huawei is expanding its future portfolio in Dubai, it continues to face challenges in Europe. Two weeks ago, Huawei filed an objection against Spanish government regulations that could prevent the company from receiving substantial state aid for developing 5G networks in rural areas of the country.
Measures are also being discussed in Germany that would require telecommunications operators to remove critical components from Chinese providers, including Huawei and ZTE, from their networks by 2026. Already, the UK, Denmark, Sweden, Estonia, Latvia and Lithuania have banned Huawei from their 5G networks. Just like the Chinese government, Huawei is actively seeking partners outside the Western sphere.
China introduced the astronauts on Wednesday who are set to embark on a mission to the Tiangong space station on Thursday. It is the youngest astronaut team in the history of Chinese space travel, according to officials from the space agency in Beijing. The Chinese astronauts Tang Hongbo, Tang Shengjie, and Jiang Xinlin will carry out the space mission Shenzhou-17. Tang Hongbo, the only crew member with space experience, will serve as the mission commander, according to the China Manned Space Agency (CMSA). Tang participated in the construction of the Chinese space station during the Shenzhou-12 mission in 2021, which lasted for three months.
The manned spacecraft Shenzhou-17 is scheduled to launch at 11:14 a.m. (Beijing time) on Thursday from the Jiuquan Satellite Launch Center in northwestern China, said Lin Xiqiang, deputy director of the CMSA. The crew is expected to spend about six months in orbit. This is the 30th space mission and the twelfth manned mission since the launch of the People’s Republic’s manned space program. By the end of the decade, China also aims to conduct a manned mission to the moon. fpe
India has long been viewed as an “eternal future market”, with double-digit growth rates sparking hope, only to be extinguished shortly after due to structural obstacles. The question of “India – the new China?” regarding India as a future economic power is not new. However, recent geopolitical shifts have significantly changed the answer.
India’s ambition to catch up economically is substantial. It aims to become a developed nation by 2047. According to government reports, it has tripled infrastructure investments in the national budget from approximately 6.8 billion euros in 2019 to nearly 22 billion euros in 2023. Targeted government initiatives like the “Make In India” campaign and production-linked incentive schemes aim to attract foreign investors to the country and increase the manufacturing sector’s contribution to GDP to 25 percent.
Federal obstacles, such as tariffs between states and non-uniform value-added taxes, have been abolished. Past bottlenecks, like inadequate infrastructure and federal bureaucracy, are being systematically addressed. Sustainable growth is a top priority for Prime Minister Narendra Modi.
In particular, incentives for foreign investors fall on fertile ground in the geopolitical situation. India’s positive macroeconomic outlook stands out. Many economies are suffering from long-term consequences of the pandemic, the Ukraine war and rising interest rates.
Even China, the long-time global growth engine and workshop, is grappling with weak consumption, a real estate crisis, and, consequently, lower growth rates. Meanwhile, India appears to be growing seemingly untouched. The International Monetary Fund (IMF) expects India’s economy to grow by more than six percent in 2023, and even stronger in 2024.
This development is new; traditionally, China has been the more attractive market. Given the erratic COVID-19 policies of the past two years, many investors now view the Indian market as politically more stable. Concerns about military escalation in the Taiwan Strait also add to the perception.
With the backdrop of the Ukraine conflict, sanctions against Russia, and increasing uncertainties related to China, businesses, investors, and governments worldwide are looking for new opportunities under the buzzword “diversification”.
They find India to be adeptly navigating the complex geopolitical landscape. In the same year it hosts the G20 summit, India has expressed support for a multipolar world and the inclusion of new states in the BRICS group at the BRICS summit. The country did not participate in Western sanctions against Russia, and Russian oil imports to India have increased since the beginning of the Ukraine conflict. Yet, the West continues to woo India as the largest democracy in Asia and a geopolitical counterbalance to China.
India has embraced the zeitgeist. For instance, its production-linked incentive schemes focus on key technologies that the West is looking to diversify from China. Besides electronic products, cars, and auto parts, sectors where China currently dominates the world market, such as solar panels and drones, are also being promoted. Some companies, like Foxconn, have already heeded the call for diversification and announced plans to expand their production in India.
German companies are also optimistic. According to the German Mechanical Engineering Industry Association (VDMA), German machinery manufacturers significantly increased their exports to India (up 28 percent) and imports from India (up 37 percent) last year.
As of June 2023, 71 percent of the companies in India expected an increase in their revenues, according to a study by AHK India. Fifty-two percent plan to further expand their investments, citing political stability, a qualified workforce, and relatively low labor costs as reasons.
Whether this positive sentiment is justified and if India’s economy can genuinely become an alternative to China remains to be seen. However, if reforms continue to advance and India maintains political stability, there’s nothing stopping India’s rise.
This contribution is part of the “Global China Conversations” event series at the Kiel Institute for the World Economy (IfW). On Thursday, October 26, 2023 (11:00 AM CEST), author Moritz Schularick, Stefan Halusa, and Florian Wenke will discuss the topic: “Diversification – Can India Be an Alternative to China?” China.Table is the media partner for the event.
Moritz Schularick is the President of the Kiel Institute for the World Economy. He has taught macroeconomics at the University of Bonn and was the Director of the MacroFinance Lab there. He has also been a professor at Sciences Po (Paris).
Silas Dreier is the Coordinator of the Global China Conversations at the China Initiative of the Kiel Institute for the World Economy. He is also pursuing a master’s degree in China Business and Economics at the University of Wuerzburg.
The fast-food chain Pizza Hut is famous (or infamous) in Taiwan for its unusual topping combinations. In line with Halloween, they now offer this subtly spooky pizza with stuffed ghost-shaped rice pockets and cooked chicken feet.
