Lack of transparency and the absence of fair procurement practices is dissuading European companies from participating in Belt and Road Initiative (BRI) projects, according to a 16 January report published by the European Union Chamber of Commerce in China.
More than half of the 132 European firms surveyed said there is insufficient information available, and only 15% said they have managed to bid on BRI projects. Among the bidding companies, 65% learned about the projects through a partner or because they were directly approached by a Chinese participant.
The Belt and Road Initiative, announced by Chinese President Xi Jinping in 2013, aims to strengthen connectivity between Europe, Asia, and Africa through the building of infrastructure projects. The programme, dominated by Chinese players, has raised debt concerns in certain regions, with countries including Malaysia seeking to negotiate contracts.
The European chamber report said that the initiative remains primarily funded by Chinese policy and commercial banks. Citing Moody’s data, the report said that the China Development Bank had lent USD 183bn to BRI-related projects by the end of 2017, while the Export-Import Bank of China had USD 118bn in outstanding loans to projects as of March 2018. According to data from the American Enterprise Institute, investment in BRI projects amounted to USD 340bn between 2014 and 2017.
BRI projects do not have access to financing from multilateral organizations due to their high environmental, feasibility, financial and transparency standards, the report said. Only 11% of projects that included a European player were backed by international organizations like the World Bank or the Beijing-based Asian Infrastructure Investment Bank.