Report on Infrastructure and Investment: the One Belt One Road Initiative and the launch of the Asian Infrastructure Investment Bank (AIIB)

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1 European Economic and Social Commi1ee Report on Infrastructure and Investment: the One Belt One Road Initiative and the launch of the Asian Infrastructure Investment Bank (AIIB) Rapporteur: Stefano Palmieri Expert: Marco Celi ROUND TABLE: EU CHINA Bruxelles May19 th -20 th, 2016

2 1) FRESH PROSPECTS FOR RELATIONS BETWEEN THE EUROPEAN UNION AND THE PEOPLE'S REPUBLIC OF CHINA 2) THE EU S STRATEGIC INVESTMENT PLAN 3) THE ONE BELT ONE ROAD INITIATIVE AND THE ASIAN INVESTMENT INFRASTRUCTURE BANK 4) SOME CRITICAL POINTS AND OPPORTUNITIES

3 FRESH PROSPECTS FOR RELATIONS BETWEEN THE EUROPEAN UNION AND THE PEOPLE'S REPUBLIC OF CHINA

4 ...the way forward 2015 marked the 40th anniversary of diplomatic relations between the EU and the PRC The EU-China EU-RPC strategic cooperation partnership pillars EUROPE 2020 EU-China 2020 Strategic Agenda for Cooperation 13 th FIVE- YEARS PLAN Civil society cooperation...the groundwork has been laid to change challenges into opportunities for development and cohesion using a win-win approach

5 The EU RPC cooperation : when geopolitical meets geoeconomics The EU's Strategic Investment Plan (Juncker Plan) The European Fund for Strategic Investments (EFSI) The One Belt One Road (OBOR) initiative The Silk Road Fund The Asian Infrastructure Investment Bank (AIIB) THE EU CHINA BILATERAL INVESTMENT AGREEMENT

6 THE EU S STRATEGIC INVESTMENT PLAN

7 Recent investment trend in the EU (Real gross fixed capital formation EU prices Eur Billions) Real gross fixed capital formation EU-28, in 2013 prices, bn Share of total drop by country EU-28, in percentage* Share of total drop by sector EU-26, in percentage* Machinery and equipment (32%) and other (-9%) Real estate Non-residential Real estate Residential Source: European Commission 2015

8 AN INVESTMENT PLAN FOR EUROPE An Investment Plan for Europe: Three Strands

9 A NEW EUROPEAN FUND FOR STRATEGIC INVESTMENTS - EFSI

10 THE ONE BELT ONE ROAD INITIATIVE

11 THE OBOR INITIATIVE

12 The OBOR Initiative FINANCIAL SOURCES: Chinese Institutions: New Silk Road Fund (SRF) China Development Bank China Exim-Bank Other financial institutions: The Asian Infrastructure Investment Bank (AIIB) BRICS New Development Bank Maritime Silk Road Fund Management Center METHODOLOGY APPROACH: The bilateral approach: State by State The Multilateral approach: European Union Cooperation between China and Central and Eastern Europeans Countries EURASIAN Economic Union

13 Asian Infrastructure Investment Bank (AIIB) What & Why AIIB is the first international financial institute in which PRC is both leading economic system and principal shareholder. Through the new bank the PRC intends supporting the introduction of a multipolar financial and currency system able to strenght the resilience of system. How & Who Unlike other, similar initiatives, such as the New Development Bank (NDB), which was set up by the BRICS, the PRC has asked other countries to be founding members of the AIIB without any prerequisites. While for Asian countries this provides an opportunity to take an active part in the decision-making process on investments which will reduce their infrastructure deficit, for European countries joining the AIIB is seen as an opportunity to tap into the major infrastructure market which will be developing in Asia in the coming years by winning tenders and subcontracting contracts for their own companies. Since march 2015 fourteen EU s member states accepted the PRC's invitation to join the AIIB (United Kingdom, France, Italy, Germany, Austria, Denmark, Finland, Luxembourg, Malta, Netherlands, Poland, Spain, Sweden and Portugal.

14 CONCLUSIONS

15 CONCLUSIONS 1/6 The EU's Strategic Investment Plan ESIF The One Belt One Road (OBOR) initiative The Silk Road Fund AIIB Must be tackled together in order to establish an integrated framework of challenges, objectives and opportunities with a view to achieving social and economic results beneficial to civil society

16 CONCLUSIONS 2/6 The EU's Strategic Investment Plan EFSI The One Belt One Road (OBOR) initiative The Silk Road Fund AIIB the direct participation of Member States in the AIIB and the entry of the CHINA into the EFSI provide an opportunity to uphold principles which are crucial to civil society: compliance with EU standards in public procurement, environmental protection, human rights, and labour and social protection Civil society must therefore be assured that it will be able to monitor, assess and implement action planned in connection with OBOR and the EFSI using an appropriate set of economic, social and environmental indicators at national, regional and local level

17 CONCLUSIONS 3/6 At the EU level the OBOR joint strategy needs to be reinforced, so that the pursuit of specific interests by individual Member States does not result in criticism and obstacles to European economic and social cohesion and relations between the EU and the PRC

18 CONCLUSIONI 4/6 would also point out that the absence of a clear and coordinated EU stance on the AIIB has not allowed for the planning and implementation of a common strategy, which would certainly have been useful for harnessing the EU's interests to those of the individual Member States.

19 CONCLUSIONS 5/6 THE EU CHINA BILATERAL INVESTMENT AGREEMENT The negotiation process, must guarantee optimum transparency regarding the documents on the table Throughout this process, the civil society organisations of both parties must be directly involved (the EESC s EU-China Round Table can play a key role here), promoting cross-sector dialogue and guaranteeing broader social partner involvement. Social dialogue and collective bargaining, which are part of the EU's social acquis, must be promoted as best practice (REX 410) The bilateral investment agreement must include a specific chapter on sustainable development based on environmental protection, combating climate change, the promotion of decent work, health and safety in the workplace, and all the issues covered by the ILO's fundamental conventions and key environmental conventions (REX 410)

20 CONCLUSIONI 6/6 With regard to the strategic role to be played by labour in the EU's strategic investment plan and the OBOR initiative, the EESC reiterates that it is ready and willing to organise a conference on labour rights in the EU and China, with the European Parliament, the European Commission, the European External Action Service and Universities; The main economic actors (such as small and medium-sized enterprises and social enterprises), social actors (such as trade unions and NGOs) and civil society actors (such as consumer associations) in the EU and the PRC must be guaranteed continuous support to ensure that they are in the driving seat of economically, socially and environmentally sustainable development in the EU and the PRC.

21 European Economic and Social Commi1ee