European Union Member States Who Joined China’s Belt And Road Initiative Are Seeing Their Exports Rise Faster By Nearly 5% More Than Those Who Have Not

Op/Ed by Chris Devonshire-Ellis 

• BRI involvement is encouraging a faster rate of export growth than established EU members 
• EU states on borders with non-EU states lack connectivity 
• China and Russian efforts to link East and West Europe are spurring faster export rates  

An examination of the Export data released by the World Bank, and available on their TCData360 website has revealed that EU member states who have signed up to China’s Belt and Road Initiative are seeing their export volumes growing at a significantly faster rate than those who have not. We can examine this data as follows: Figures shown are in Billions of Euros.

This is in contrast to the findings of our previous survey, which established that EU states who had signed up to China’s Belt & Road Initiative had not performed as well in their exports to China as those who had not.                                                                  

This would appear to suggest that the larger EU nations, non-BRI signatories, who have increased their exports to China at a faster rate have been able to do so due to their longer established relations with China, larger export promotional budgets, and broader array of items to sell. That muscle hasn’t completely swamped the smaller nations exporting to China who signed up to the BRI; their exports to China still rose by a collective 35.34% as our earlier data showed.

The World Bank figures cited in this article however appear to illustrate that these smaller EU nations have been much more nimble in increasing their overall exports than their non-BRI counterparts, despite the difference in capabilities. While it remains an economic truth that it is harder to increase growth from a higher base, there is some significance that EU members who signed up to China’s BRI achieved a higher overall export growth rate of nearly 5%.  This may be due to entities such as the China and Eastern & Central Europe Cooperation which while not EU member specific, does provide a platform for Europe’s smaller trading nations, and especially those in the Balkans and Eastern Europe to discuss enhancing trade ties between them. If true, this indicates that Brussels has weaknesses in the region and has not engaged with the ex-Soviet and Balkan states on the same terms and parity as other, stronger members. A fault line – which includes export and trade development – appears to be developing between EU members not part of the BRI, and those who are. The latter are increasingly trading amongst themselves, and with European nations outside the EU, such as Albania, Bosnia & Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. The latter nation became so disenchanted with on-going EU promises that it signed a Free Trade Agreement with Russia’s Eurasian Economic Union instead.

Brussels has also been seen as disruptive when it comes to infrastructure build between EU and non-EU member states, even when no EU funds are being spent. Not surprisingly, that has been seen as infringing on sovereignty in some cases. The debacle over the Hungary-Serbia high-speed rail is a good example.

The lack of interconnectivity in the EU lies mostly along these fault lines, whose infrastructure needs upgrading but is not being encouraged by Brussels. Yet when offers come in – principally from China, but also from Russia – it is downplayed and usually regarded as hostile. Attempts to block such build is not uncommon.

To see what China’s infrastructure build can offer in regional connectivity, our article The European Belt & Road: Railways, Roads and Ports which illustrate the development gap that China is filling when Brussels is reluctant. It’s not just China either. Russia is also involved in financing the Serbia-Montenegro railway, a major connectivity that will open up remote areas of the Balkan regions and connect them with Italy.

Clearly, when as a result of joining China’s Belt & Road Initiative, exports increase, there are benefits in having done so, and especially when export growth rises faster than larger EU competitors. Brussels needs to be aware of the needs of its smaller nations, or risk losing them. The lesson should not be more fear of China, but of better ways of assisting and integrating these smaller nations on the fringes, and being more respectful and aware of their historical and trade development connectivity to the East.

Related Reading

• China-Europe Rail Freight Doubles In 2020. These Are The 44 Key And Emerging European Freight Hubs To Watch
• European Union Businesses And The Belt And Road Initiative – A Guide To Changing The Modus Operandi And Getting Involved