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Xi comes bearing ports, trains and trade; Europe says no transparency
by Staff Writers
Yangon (AFP) Jan 15, 2020

Lack of transparency in China's Belt and Road projects: EU firms
Beijing (AFP) Jan 16, 2020 - A lack of information and transparency are top barriers for European companies seeking involvement in China's Belt and Road Initiative, according to a survey published Thursday by the European Union Chamber of Commerce in China.

Only 20 out of 132 firms polled said they have bid for projects related to the BRI, a massive global network of ports, railways, roads and industrial parks spanning Asia, Africa, the Middle East and Europe.

The BRI -- Chinese President Xi Jinping's signature foreign policy initiative -- has also faced criticism for swaddling poor nations with crippling debt and for being too opaque.

A lack of information on deals and "non-transparent" procurement systems were the biggest barriers identified by European firms in the survey.

Of the companies that bid to participate in BRI projects, only 10 percent got wind of the project through publicly available information.

"The vast majority were informed either by a partner company or by the Chinese government, meaning that they were essentially hand-picked to participate," the EU Chamber said in the report.

Chamber President Joerg Wuttke said the survey showed that for businesses, gains from the BRI have been "quite insignificant", with European firms tending to fill only niche roles.

More than half of the companies that won bids said it was because they had goods or services no Chinese firm could provide, and the most represented industries overall were financial services, machinery, and logistics or transportation.

Wuttke said the BRI appears to have a "spoke and hub model" with China at its centre.

The report noted that Chinese companies often provide everything for a project, from the materials to construction services and financing.

Such an approach may enable projects to be completed swiftly but it is "profoundly disconcerting" to the European business community as it removes meaningful competition, it said.

The lack of transparency and fair procurement mechanism also contributed to low levels of participation from development banks like the World Bank and the Asian Infrastructure Investment Bank, which have strict criteria for investment, said the report.

While about a quarter of respondents said the BRI -- which was launched in 2013 -- is improving in transparency, quality and fairness, this trend is less evident when it comes to access to projects.

The EU Chamber urged China to take on an open and transparent procurement system for BRI-related projects as well as perform feasibility and environmental impact studies for them, in line with international standards.

It also recommended that the EU prioritise its "connectivity strategy" -- which aims to improve transport, digital and energy links between Europe and Asia while promoting environmental and labour standards -- to complement and offer a credible alternative to the BRI.

A high-speed rail line to the east, a deep-sea port to the west, and a makeover for commercial heart Yangon -- Chinese leader Xi Jinping arrives in Myanmar on Friday laden with investment pledges worth billions which could reshape the country.

Here are five of the main projects -- and some of the issues plaguing them:

- The big deal -

The crown jewel of Xi's two-day visit will be a $1.3 billion deep-sea port off Myanmar's troubled western Rakhine state.

The Kyaukphyu port will serve as Beijing's gateway to the Indian Ocean.

Myanmar has successfully hammered down the price from $7.2 billion to swerve fears of a Chinese debt-trap, but will still pick up 30 percent of the bill.

Alongside the port, swathes of paddy fields and teak forests are poised to be transformed into a vast industrial zone of garment and food processing factories.

Officials insist ethnic Rakhine will be the first in line for some of the 400,000 jobs the zone is slated to bring -- but many suspect the benefits will mainly be siphoned off outside the state.

The port is the centrepiece of the China-Myanmar Economic Corridor (CMEC) project -- a key thread in China's global Belt and Road vision.

- The $8.9 bn train -

The first segment of the proposed $8.9 billion high-speed rail link from China's landlocked Yunnan province to Myanmar's west coast will cut through the border town of Muse to former capital Mandalay.

But engineering challenges through Myanmar's hilly Shan State would likely be dwarfed by security concerns.

The region is awash with weapons and a centre for meth production as armed rebels and militias jostle for a share of any potential windfall.

They will first need to be appeased and reassured the rail link will not jeopardise their income or security.

- Border disorder -

Also in discussion would be overhauling the border zone in Shan state with three special economic zones.

This could raise the stakes for the two countries' traders -- both above board and clandestine.

The vast majority of pre-cursor chemicals used to fuel Myanmar's multi-billion-dollar illicit meth industry flood across the porous border.

Expect trade barriers to be removed and factories to mushroom -- but also an uptick in violence as militias and armed groups try to cash in on the spoils.

- Yangon makeover -

Yangon authorities hope to revolutionise the sprawling, gridlocked commercial hub by creating a whole new town on the west bank of the city's river.

They say the satellite city will help solve problems of congestion, overpopulation and the lack of electricity and water.

But environmental concerns, a lack of transparency and corruption allegations are already dogging the planned $1.7 billion scheme.

- Elephant in the room -

The $3.6 billion, 6,000-megawatt Myitsone dam could eclipse the visit.

Any move to revive the suspended project in Myanmar's northern Kachin state would provoke a huge outcry.

But if it is left off the table, it will be the elephant in the room.

As vice president in 2009, Xi personally signed off on the Myitsone dam with Myanmar's then-military junta.

But public anger thwarted the project and it has remained in limbo since 2011.

The dam would flood an area the size of Singapore and cause irreparable damage to the famed Ayeyarwady River, critics say.


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China's trade surplus with the United States narrowed last year as the world's two biggest economies exchanged punitive tariffs in a bruising trade war, data showed Tuesday, just as the two prepare to sign a deal dialling down tensions. The huge difference in trade traffic is a key bone of contention for Donald Trump in a long-running stand-off that has seen him impose tariffs on goods worth hundreds of billions of dollars, triggering retaliation from Beijing and jolting the global economy. Chin ... read more

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