As Novac/Marko Biocina writes on the 16th of April, 2020, when completed in two years, with a span totalling 2400 metres, Peljesac bridge down in Dalmatia will be one of the most impressive structures of its kind in Europe. At the same time, it will probably be the most impressive monument to an end of an era of certain global economic and political relations. Or rather, just a giant memorial to an era which simply never came to fruition.
The contract to build Peljesac bridge, which was signed with China Road and Bridge Corporation back in April 2018, was seen by many as the first proverbial swallow of the coming spring in Sino-European economic cooperation. It was the first time a Chinese company had managed to ”win” a job co-financed, in a high percentage, by European Union funds through an entirely transparent public tender, offering some of the most desirable, favourable conditions a company engaging in such a job might want.
Of course, the winning of the tender by a Chinese company didn’t go without raised eyebrows and very fierce objections from numerous European construction companies and political representatives from various countries, but in the end, the European Union reluctantly replaced the whole arrangement by recognising the Chinese company as the legitimate winner of the Peljesac bridge tender.
The move was supposed to mark the grandiose entry of a Chinese construction operative into a market that had been unavailable to the Chinese for many years, but while those dealing with geopolitics dealt with the sum of the financial and indeed reputational benefits that would be gained by little Croatia owing to the matter, the coronavirus pandemic occurred.
The cranes have, more or less, continued with their work on Peljesac bridge’s existing projects which were unfinished before the epidemic broke out, but the venturing onto new ones has been halted. Once the pandemic begins to dwindle back down, whenever that may be, and investments start up once again, does anyone honestly believe that the story in which Peljesac bridge plays the main role could be repeated?
The changes that will follow in relations between the European Union, Europe as a whole and most of the Western world, with China after the coronavirus crisis, have already been more than vividly evidenced by a statement given last week by the Vice-President of the European Commission, Margrethe Vestager, who made it clear in an interview with the respected Financial Times that EU member states would , and should, protect their strategically important companies from Chinese takeover.
One might rightly note that such protectionism already existed in the European Union, in a de facto sense, but nonetheless, a public mandate for its implementation by a leading liberal politician high up in the European Commission is a clear signal in which direction the European economic pendulum is turning in regard to China.
That isn’t the only signal, either. Even in their ”neglect” of the ongoing conflict between China and the Donald Trump administration, it’s interesting to note that the Japanese Government has announced, as part of its anti-recession package, that it will spend $2.2 billion on co-financing the withdrawal Japanese production facilities from Chinese territory. These Japanese-owned factories aren’t necessarily expected to be returned home to Japan, but this co-financing (admittedly to a lesser extent) is also available to those companies that wish to move their operations on to third countries.
These perceptions of the risk posed by economic dependence on China, either as a manufacturing base or indeed as an economic partner, will remain a lasting consequence of the coronavirus pandemic. The need to redefine economic relations between China and the West has been a kind of elephant in the international community’s room for years now, long before any talk of a rapidly spreading new virus.
While, on the one hand, China’s involvement in the international economic and trade system has brought enormous economic benefits to the world over the past few years, it’s hard to shake the impression that China has increasingly practiced what William Nobhaus, an economic Nobel laureate, said along the way, and that is that China is free riding, meanin that the secretive nation is enjoying the benefits of public good, but it’s enjoying them without having to pay an adequate portion of the associated costs.
This cost is not only financial, but it also involves engaging in the establishment of generally accepted social norms and international standards for the functioning of social services in general. In economic terms, it has long been clear that China has been taking advantage of open trade access to foreign markets, while carefully limiting the entry of anyone else to its own. Intellectually, China has profited significantly from the selective transfer of knowledge, ideas and technologies from the West, while closing reciprocal flows off in the other direction by censoring the internet and banning foreign services.
Finally, if the growing suspicion that China’s various forms of negligence and abuse have contributed to the transformation of what could have remained a local epidemic into the global pandemic we’re now witnessing, its credibility as a responsible international actor will absolutely be called into question. A nation that, through its leadership in multilateral organisations, seeks to lead the implementation of international policies, such as those related to health, cannot credibly do so unless it is itself capable of demonstrating the implementation of these policies and measures at the national level, at home in China.
Coronavirus-induced sino-skepticism will spark a lot of debate in the future about what the optimal levels and models of economic cooperation with China should be, and in the European Union, where this crisis has been perceived as an existential threat, these discussions will be of a far more serious nature than they will elsewhere.
At a time when the nationalisation of individual European companies is already openly advocated as a better option than ”becoming Chinese”, one can now find it easy to entertain the thought that in the post-coronavirus era, whatever shape that takes, the Chinese will no longer build bridges in the EU.
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