CONTENTS: Posts: Coal Phase-out top down / Kohleausstieg ‘par ordre de mufti’ // News: ASEAN’s emergent key role / China and Europe: Cooperation in Africa / „Global Gateway“ – Europe’s connectivity competition / Update: Compensation for “no more coal-fired plants abroad” // Readings: How ‘multilateral’ is the AIIB? / Global Perspectives on China’s Belt and Road Initiative.
Blog posts
Coal Phase-out ‚par ordre de mufti’
President Xi Jinping’s announcement at the UN General Assembly in September that China will not build any new coal-fired power plants abroad in the future has given the international climate community new hope for an accelerated reduction of CO2 emissions worldwide, like the mirage of an oasis to the thirsty wanderers in the Sahara. For a real energy transition in the countries of the Global South, however, this is only one – albeit important – piece of the puzzle. More
Kohleausstieg ‚par ordre de mufti’
Präsident Xi Jinpings Ankündigung bei der UN-Generalversammlung im September, dass China zukünftig im Ausland keine neuen Kohlekraftwerke mehr bauen wird, hat der internationalen Klimagemeinde neue Hoffnungen auf einen beschleunigten Abbau der CO2-Emissionen weltweit gegeben, ähnlich wie die Fata Morgana einer Oase den dürstenden Wanderern in der Sahara. Für eine echte Energiewende in der Ländern des Globalen Südens ist das allerdings nur ein – wenn auch wichtiges – Puzzleteil. More
News
ASEAN’s emergent key role
The biannual summit of the Southeast Asian 10-nation regional organisation ASEAN end of October could become historical in two regards:
Firstly, the decision to drop coup leader Min Aung Hlaing from the guest list in response to the lack of cooperation by the Myanmar junta on the implementation of a Five-Point Consensus agreed to earlier was an unusual drastic step by ASEAN standard, which otherwise prefers to downplay conflicts and act in consensus. It was the first time banning a member country from participation, although they could not bring themselves to invite the National Unity Government (NUG), which had been driven underground, instead.
Secondly: After former US President Donald Trump had not shown up at the ASEAN summits for four years, his successor Joe Biden has now joined in again, as have Russia’s President Wladimir Putin and China’s head of government Li Keqiang. The high-level participation strengthens the importance of ASEAN’s role as a potential mediator and dialogue forum in the turbulent waters of Southeast Asia and in the region as a whole. Biden courted the ASEAN-leader with the reference to „ASEAN centrality“ in regional diplomacy. His message is part of the attempts to make up for lost ground due to China’s growing power and to security concerns. Several member states expressed misgivings about the recently announced AUKUS partnership between the US, UK and Australia, the militarized approach by the US to the challenges posed by China and its lack of meaningful economic strategy for the engagement with the region.
China has a clear advantage in Southeast Asia, with both much closer cooperation alliances with ASEAN and far greater economic importance, which was further strengthened recently by the regional economic agreement RCEP. For ASEAN, the summit was also meant to test the perspectives of finding a unified approach towards China’s ambitions in the region, which is a crucial part of its economic and political „soft belly“. Competition for the region is underlined by an offer from China shortly before a planned virtual meeting between US President Joe Biden and ASEAN leaders, which formally referred to as a “comprehensive strategic pact”, but looks set to be more far-reaching than Beijing’s current ties with the bloc.
China and Europe: Cooperation in Africa
In July 2021, President Xi Jiping proposed to the governments in Berlin and Paris to work more closely together in Africa – a reaction to the Build Back Better World (B3W) initiative of the US and the G7 (see post) and to problems of Chinese investment in Africa, including the debt debate and the Corona pandemic. Bilaterally, German and French companies have long cooperated with Chinese partners, partly in joint ventures and consortia, offering African governments a ‘blend of Chinese prices and European quality’. They benefit from Chinese infrastructure projects, among other things, but have also realised that without such cooperation they will lose out. Government cooperation, on the other hand, as proposed by Xi Jinping, “faces numerous obstacles”, according to the SAIS/CARI research initiative. The French employer federation MEF rejected official Sino-French cooperation already back in 2016. And with increasing geopolitical confrontation, such cooperation with the ‘systemic rival’ China is becoming increasingly difficult, the researchers argue. However, companies are not willing to be deterred from doing business.
See: Lucas Engel, Reed Piercey, and Deborah Brautigam, Why France and Germany won’t join China’s ‘Africa Quad’. In: Eastasiaforum, 19 October 2021.
“Global Gateway” – Europe’s Connectivity Initiative
In mid-September, EU Commission President Ursula von der Leyen announced what the Business paper Handelsblatt called “one of the most important, if not the most important, foreign policy initiative of the EU”: a European connectivity strategy called “Global Gateway” to counter Belt & Road. A focus of the strategy, to be available “shortly”, is apparently African countries, to which the new strategy will be presented at the February 2022 EU-Africa Summit. “We have to get smarter”, von der Leyen urged, for example to “develop new investment projects on green and digital technologies”. One example could be the factories of French carmakers Renault and Peugeot in Morocco. Supplied by Morocco-based manufacturing plants of more than 200 companies, including a $400 million plant of China’s giant conglomerate CITIC, they have a capacity to produce around 700,000 vehicles per year. The European companies are benefiting from China’s investment in the development of Morocco’s main port, through which exports now flow. Morocco could thus become the central node in a commercial corridor that runs from West Africa to Western Europe, according to a commentary published by the European Council on Foreign Relations (ECFR).
See: Michael Tanchum, The EU’s Global Gateway and a new foundation for partnerships in Africa. ECFR commentary, 29 September 2021.
Compensation for the announced coal phase-out
At the 2nd Belt & Road Energy Ministers’ Conference in mid-October, representatives of the Chinese government reiterated their commitment, following Xi Jinping’s announcement that China would stop building coal-fired power plants overseas and instead „step up“ support for green energy generation in developing countries (see: Coal phase-out ‚par ordre de mufti’). A ‘7-point initiative’ lists key areas to act on such an intensified cooperation on renewable energies. But „with no work plan around the seven points provided, it reads much like a wish list of areas for collaboration“, comments the Blog Panda Paw Dragon Claw.
Source: Panda Paw Dragon Claw, Week of Oct 1, 2021.
See also: Kevin P. Gallagher, As the world says no to coal, China is poised to lead on green energy finance. In: South China Morning Post, October 31, 2021.
Readings
How ‘multilateral’ is the AIIB?
Several European countries, including France and Germany, justified their participation as founding members and shareholders in the Beijing-initiated Asian Infrastructure Investment Bank, which started operations in early 2016, by wanting to enforce higher environmental and social standards and transparency in lending. The bank mainly finances risk-prone infrastructure projects such as power plants, dams or transport infrastructure, which can have serious negative social and environmental impacts. “The AIIB plays an important role in China’s efforts to shape a new form of multilateralism in which it defines the rules“, explains a recent study commissioned by the Heinrich Böll Foundation.
From the beginning, there were doubts that such an influence would be possible, despite promises to that effect from the bank’s management bodies. The study now concludes that international shareholders only have limited say in project decisions. “There is now a broader risk that the AIIB’s efficiency drive, with its promises of no red tape and fast financing, encourages weaker safeguards and due process across the board as other MDBs (Multilateral Development Banks) fear losing out on investment and business opportunities.”
There are also indications that the previous separation of project financing between the Belt & Road Initiative and the multilateral AIIB will be shifted and that the bank will take over the management of one of the BRI’s financial programmes at Beijing’s request. “The AIIB now refers to the natural complementarity between the two. A sign of cooperation is that the AIIB will begin to serve as the administrator for the Multilateral Cooperation Center for Development Finance (MCDF). Established by the Chinese Ministry of Finance, Chinese media refer to the MCDF as a platform for BRI investments. The MCDF is not subject to over-sight by the AIIB’s Board of Directors.”
See: Korinna Horta; Wawa Wang, The Beijing-led Asian Infrastructure Investment Bank: Global Leader in Infrastructure, at What Cost? Published by the Heinrich Böll Foundation, October 2021.
Global Perspectives on China’s Belt and Road Initiative
Although the collection of texts, edited by Florian Schneider and an outcome of a research project at LeidenAsia Centre, strictly speaking addresses global issues only in two areas, namely Cooperation in Higher Education and Research, and Trade, Tax and Development Finance, and certainly not the geopolitical implications of BRI, it is worth reading for several reasons: The contributions cover “regional dynamics”, regions that are less in the focus like Latin America, the Southern African Development Community, the Caribbean, and the Digital Silk Road into East Africa, and “local actors” with country studies on Indonesia, Laos, Malaysia and Thailand, Iran and Ethiopia.
A central guiding question is “agency”, i.e. the scope of the countries or governments involved to influence Chinese projects and policies and thus shape the implementation of BRI. Some of the most prominent examples of the BRI’s negative impacts were driven as much by elite interests within the host country as by Chinese investor decision-making like the Hambantota Port in Sri Lanka and water infrastructure projects in the Philippines. Accordingly, the introduction states: “The volume’s common theme (is) the question of how different actors give shape to BRI projects. It outlines how, rather than treating nation states as singular, monolithic actors, this volume teases apart the way different people and organizations insert themselves into BRI decision-making and implementation.” The introduction discusses “how we might conceptualize agency in such contexts, drawing together the volume’s findings to arrive at four conclusions: 1) that in understanding the BRI, geographical context matters; 2) that the BRI is a pluralist endeavour rather than a single, unified agenda; 3) that BRI efforts often extend rather than challenge existing politics; and 4) that outcomes depend on the activities of local actors.“
See: Global Perspectives on China’s Belt and Road Initiative. Asserting Agency through Regional Connectivity. Edited by Florian Schneider. Amsterdam University Press 2021 (free download).