|The European Network of Corporate Observatories (ENCO) is pleased to invite you to a webinar on its new publication “The Corporate Silk Road”, on Wednesday 27 January 4-5.30 pm. To attend, please register by email: contact (at) corpwatchers (dot) eu|
The newly formed European Commission had just presented the European Green Deal when the world was hit by the Covid-19 pandemic. The goal was to reframe infrastructure investments in order to achieve net-zero carbon emissions in Europe over the next ten to thirty years. However, it soon became clear that the pandemic was going to have a massive impact on the global economy, with unimaginable effects on business and on people’s lives.
Much had changed since March 2019, when Chinese President Xi Jinping visited Europe for a series of institutional meetings. Behind his visit was the “Belt and Road Initiative” (BRI), sometimes also called the “New Silk Road”, an international cooperation programme launched by China in 2013. Various investment contracts were signed at this occasion between Chinese entrepreneurs and European corporations and governments. The BRI was finally reaching the Old Continent, with potential big changes ahead.
China’s reemergence has had a significant impact on world trade. It has, since the 1980s, become the gateway to globalised production chains dominated by American, Japanese and European multinational corporations. China’s fast-growing industrial and manufacturing output has supplied the world with a myriad of products and services. It has become the powerhouse of globalisation, initially serving companies based in the Global North, but now increasingly asserting its own interests as well as the interests of its homegrown corporations.
The infrastructure required to transport goods and services around the world (maritime ports, railways, airports, factories and warehouses, antenna systems and data centres) has developed at a similar pace. More goods and services are being transported through these "veins of globalisation" than ever before. E-commerce is being further developed through blockchain technology and automation and security systems. There is an increased focus on product localisation and follow-up. AI technology is used to ensure port security, and algorithms optimise product flow, facilitating intermodality and consolidation. And data and data centres play a key role in all this.
According to some authors and activists, infrastructure “mega-corridors” are reshaping the world. “Logistics-driven systems” are resulting in global production being reorganised along mega-corridors, with the goal of maximising corporate profits and exploiting workers as much as possible.1 These systems are constructed around just-in-time delivery systems, and are facilitated by a constantly evolving relationship between state and capital, the impacts of which remain to be seen.
Corporations and new forms of public-private partnerships play a key role in the development of these mega-corridors, with capital more concentrated, more vertical and more mobile than ever. The opaque complexity of corporations means they are able to evade their social, environmental and tax responsibilities, leaving communities to pay the heavy toll of Globalisation 2.0.
After a century of world trade dominated by the US and Europe, China’s economic and political players are now catching up. China’s private and public companies (the line between them can be blurred) are now on equal footing with their European and American competitors, even in their own backyards. There has been a degree of irony to see Chinese public companies buying up European infrastructures that had once public but which are now largely privatised due to decades of neoliberalism.
The BRI involves major infrastructure investments in order to connect Chinese markets with the rest of the world via maritime and rail routes and through data. Many see the BRI as a symptom of China’s new assertiveness on the global scene. In Europe, it has been greeted both by enthusiasm (by governments or corporations eager to attract investments or to tap into the Chinese market) and by prejudice and suspicion about the perceived threat of “Chinese imperialism”. There is also the more obvious rivalry between China and the United States that comes into play, both countries vying for economic power. The European Union’s stance has been somewhere in-between. It lacks a coherent economic strategy, but has veered on the side of private corporations, thus enabling them to be well positioned to take advantage of potential opportunities. The media and the public have, however, voiced concerns regarding the growing presence of Chinese capital in the EU, including in its bordering countries, and the risk of losing control of precious economic assets and becoming dependent on new Asian masters.
This report, however, gives a more complex picture of the situation. It shows how European and Chinese capital are aligned, and are developing global trade and infrastructure in Europe and throughout the world in a hybrid spirit of cooperation and competition. This is taking place at the expense of people and planet through an ongoing, profit-oriented commodification of public and common goods.
“From Marseille to China, through Africa”, written by Observatoire des Multinationales, shows how attracting Chinese investments has become a key priority for the business and political leaders of Marseille, in the South of France, as well as a convenient excuse to push their own agenda. The port of Marseille has been extended to accommodate growing trade relations with China, which may never eventuate. Meanwhile, major corporations based in Marseille, such as CMA-CGM, are seeking to cash in on its historical position as a trading hub with Africa in order to develop strategic alliances with Chinese corporations.
In “The Promises of the New Silk Road in Italy”, Re:Common shows how Chinese investors’ interest in expanding ports in Italy has been used by the government to push legislation that would establish investor-friendly "special economic zones", conveniently located close to ports, especially in the South of Italy. The article looks into the real beneficiaries of infrastructure mega-corridors. With the COVID-19 pandemic and the ensuing economic crisis, it has become even more evident that the shipping sector is now a key player, with a handful of companies operating in a quasi-oligopoly due to acquisitions and commercial alliances, including with Chinese corporations. Among them is Swiss-Italian corporation MSC, famous for its tourist cruises but also a key global player in shipping, port services and logistics. Corporate Watch examines the MSC business model and company structure.
Gresea’s report, based on two case studies, illustrates how Belgium, which for a long time was an important European logistics hub, has recently become the home to major Chinese companies active in the sector, which plays an essential role in globalised capitalism. The report details the arrival of private e-commerce giant Alibaba in Liege as well as public shipping company COSCO in the port of Zeebrugge. It looks at their respective investment projects, the role these play in the companies’ overall strategy and, more broadly, in the Belt and Road Initiative, and lastly, identifies their impact on the regions concerned.
In its report “Smart security in Catalan ports: Towards a new model of Surveillance, Privatisation and Human rights’ abuses”, the Observatory of Human Rights and Business in the Mediterranean Region (ODHE) shows how ports, as critical infrastructure for essential services and the functioning of global supply chains, are developing new security ecosystems to confront and deter new challenges and threats such as cyberattacks. ODHE provides an overview of the security ecosystems of Catalan ports, analysing how the legal framework has changed and how this has affected threats and risks. The report looks at the main private security companies currently operating and the technologies they use, revealing how developments in port security are serving as a backdrop for severe human rights violations as well as other controversial activities.
There is a cross-cutting dimension to the global infrastructure agenda, in which the Belt and Road Initiative plays a major role. Striving for ever more logistics and connectivity in order to ensure global just-in-time delivery is extremely energy intensive and heavily reliant on the fossil fuel economy. Although an increasing number of logistics players claim to be committed to the climate and to reducing their carbon footprint, the plain truth is that an economic model based on maximising extraction, exploitation and profit, for the benefit of a few, just can’t be sustainable or in any way “climate friendly”.
This is highlighted in the report “How the BRI and the availability of Chinese finance weakens the rule of law in the Western Balkans". The case of Tuzla 7 lignite power plant in Bosnia and Herzegovina”, by Bankwatch Romania and Re:Common. The report delves into one of the most polluting projects in Europe, now being expanded by both Chinese and European public and private capital, jeopardising the health of communities in Tuzla and neighbouring towns, and endangering water reserves and the environment.
Inequality between regions and countries, as well as between social classes and populations, is another aspect that needs to be addressed. If this trajectory towards mega-infrastructure is manifesting itself in different ways in Europe, how is it taking shape in other parts of the world? How is the development of roads, railways, factories and warehouses playing out in the global economy’s historically-marginalized countries? Despite its far-reaching grip, however, the world of logistics is showing some cracks; the COVID-19 pandemic rang alarm bells and exposed the winners and losers of global production. While local shops and smaller businesses were temporarily paralysed, larger corporations and certain sectors, including industrial and retail logistics, still benefited from state support and reaped huge profits. There is also the question of how the rest of the world will react to this new restructured global capital and the even more pervasive issue of accessing the last remaining natural resources. Is the trade war, which is very much about technology, only the beginning of a more serious conflict?
Probing into and finding answers to these questions will enable us to prevent an infrastructural avalanche that is set to destroy the planet. It seems that history is accelerating and that we are set to become active witnesses of changes that were once unthinkable.