The One Belt One Road Initiative: Advantages and Disadvantages for the Economic Sino-European Relation

Introduction

The relationship between the European Union and China has evolved in one of the most significant axis across the universe. The political and aforementioned bonds between the two parties have increased exponentially in the last few years, changing the shape of the global system of authority. A cooperation that was conceived at the end of the 1970s has transformed till becoming the second trade partnership across the universe. The data to support this notion are clear: after a sluggish start, European Union became during the 200s the largest trade partners for china, whereas China is the most significant trader, after the United States of America, for the European Union. According to Clemente (2016), the trade volume between China and the European was EUR428.1 billion. The European Union exports to China in 2013 was EUR148. 4 billion. The trade volume of 2013 was 80% more compared to that of 2009. The imports increased by 30% more thereby recording EUR280.1 billion. In addition, the numbers about the outward investments are relevant: 8.2 billion euros in the European-China relations. 1.1 billion euros was the financial value of the Chinese investments to Europe, with an 1100% rise compared to 2009.

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The sections in which China and European Union liaise with each other are many. The bonds between these two parties can now be acknowledged as one of the most significant pillars of the worldwide economy. The status of their trading relations can generate positive and negative effects on the global value. The China and European must be assessed as primary actors of the present multipolar universe emanated from the fall of the Soviet Union in the 1990s. China is presently encountering a certain phase of the worldwide history. The end of the propaganda war and the downfall of the Soviet Union from 1989 to 1991, pushed the system towards a hurrying and a broadening of globalization in the whole universe. The repercussion was that large nations, which in the past were aligned or non-aligned with neither of the two trading blocks, have now launched their economies to worldwide and regional markets. They get rid of protectionist policies and pursuing the entrance in the multilateral system.

The United States did not succeed in suggesting themselves as the exceptional power to lead the whole worldwide governance order. The actors have to approve and consider the interests and the position of the others global stakeholders that demands to engage in the solution of worldwide issues. The role that European Union has amassed in the few years is of significance. The EU representatives engage in a long list of global meetings, fees negotiation, and worldwide conferences. However, the strong reliance on the United States has nearly often conditioned its foreign policies. Even though the EU and single European nations have not engaged quickly in the elaboration of various initiatives are important to implement the one Belt One Road (OBOR) initiative. The nations have begun to comprehend the advantages that they can gain by engaging in the investment plan.

Research Background

Before we dwell into the present status of the interactions between China and European Union, it is critical to present the early phases of the relationship between European Union and China. The situation is entirely different from the one that coexisted forty years ago, when happened between the representatives of the two blocks. A radical transformation entailed the social and institutional structures, though all the globe; case studies have been entirely reshaped, with a subsequent revision of the interactions of power and the economic relations between the nations. In this chapter, we will consider the event that subjected Western nations and China to pursue more close ties between them and the birth of the European Union and China axis.

OBOR Defined

Since China and the European Union (EU), first established relations in 1975, there has been a dramatic increase in co-operation related to trade, science and technology and other projects between the two regions. China's reunion with the United States implied that European nations and community institutions could restart the relations with the Chinese government. The vital moment was when the visit of China of the European Commissioner Sir Christopher Soames and his credit of the Republic of China as the only authentic Chinese government. The situation was very distinct from the one individuals are experiencing. The European Union was a very weak and China was a poor nation, in the middle of a battle for the succession of Chairman Mao Zedong. The leader was already very firm and would have perished a year later. This is the reason the trade relations between the two actors were supposed to commence immediately.

Mutual Cooperation between China and EU

In 2015, the EU replaced the United States as China's largest trading partner (CFIE, 2016). For the EU, China is the second largest trading partner after the United States (Europa, 2017). China is the EU's largest foreign direct investment (FDI) partner while investments made by European firms like Airbus, Siemens, Nokia, and Volkswagen have made the EU the fourth largest FDI investor in China (Wong, 2017). According to Eurostat (2017), the EU sources most of its imports from China with the Chinese market being the second biggest export market for the EU. The EU is China's largest and most important supplier of technology. Manufactured goods such as industrial machinery & equipment, footwear, clothing, motor vehicles, chemicals, aircraft form the major exports and imports from the EU to China and vice versa. The value of trade between both regions is over EUR1 billion a day (European Commission, 2016).

Moreover, both China and the EU adopted the EU-China 2020 Strategic Agenda for Cooperation in 2013, according to which the EU reaffirmed the territorial integrity of China whilst China confirmed its support for greater EU integration (Europa, 2015). According to this treaty, both regions must co-operate to promote "peace, prosperity, sustainable development and people-to-people exchanges". Every year, an EU-China summit is held to discuss political, economic, global and regional issues (Casarini, 2016). An indicator of growing co-operation between both regions is the constant negotiations and revisions made on agreements on areas as diverse as environmental protection, energy, human rights, climate change, space exploration and education. These findings suggest that the EU and China are both inter-dependent economies, important trading partners and collaborate mutually in a host of areas. It may be inferred that the continued growth, progress and economic prosperity of both regions are dependent on their further integration.

In 2013, China unveiled the 'One Belt, One Road' or OBOR initiative to further strengthen and grow trade, commerce and economic ties with the EU (Tonchev, 2016). The OBOR project integrates the Chinese and EU markets by knitting together a vast network of infrastructure - including roads, railways, seaports, airports and oil pipelines across Europe, Asia and part of Africa (Shen, 2016). According to Meunier (2014a), OBOR combines the Silk Road Economic Belt (which is an economic corridor across Europe and Asia) and the 21st Century Maritime Silk Road (which is a networ...