The European Union Chamber of Commerce in China (European Chamber) acknowledged that the Belt and Road Initiative (BRI) proposed by China to enhance connectivity along the ancient silk road is an enormous driver of global growth in a report released on Thursday that also highlighted the relatively peripheral role currently played by European businesses and urged their greater involvement.

At the beginning of the report, named The Road Less Travelled: European Involvement in China's BRI, the European Chamber admitted that "BRI is a very powerful proposition, and the plan is clearly designed to deliver economic benefits through infrastructure development." 

The economic benefits brought by infrastructure development is not an urban myth. The World Bank argued that for every additional one percent of global GDP spent on infrastructure, global GDP grows by two percent and developing countries by seven percent.

BRI is much needed by the world

"There is a need for programs like the BRI, particularly to boost connectivity in the developing world," the report said. The new infrastructure being developed along the BRI could bring meaningful opportunities to many, as long as projects are pursued under the right conditions, it said.

"China does have the best experience in infrastructure development," said Joerg Wuttke, the president of the European Chamber. "China has the ability in building with high efficiency. Countries around the world are interested in having Chinese contractors and local economies benefit from it."

Take China-Europe freight trains for example.  The report argued that the railways across the Eurasian continent present new opportunities to European businesses by improving access to various markets, and providing cheaper logistics that would facilitate increased trade in goods.

"It provides better access to customers (such as many inland markets in Central Asia and the Middle East that are otherwise out of reach to maritime shipping) for many European companies," said in the report. "It is also potentially positive for producers in those regions that had not previously been able to competitively export their own goods due to prohibitively expensive logistics options."

On top of that, for European businesses which are increasingly more environmentally conscious, the railway is also the greener choice.

According to the statistics provided by the European Chamber, carbon emissions from shipping one 12,000 kg container from Inland China to Inland Europe by air, sea and rail are respectively 54, 3.2 and 2.8 tonnes. 

Railway transportation, which nearly halves that by sea, also lowers operational costs for its corporate users, and for consumer products, such as clothing and electronic products, the shorter transportation time also helps the products to cater to changing consumer trends better.

However, the fact is that many lines of Eurasian trains are heavily subsidized by the Chinese government, and it makes organizations like the European Chamber and its users wonder how financially sustainable it is.

"The infrastructure will certainly benefit trade and the economy, but will it be sustainable with 50 percent of the shipment cost subsidized?" Wuttke said.

China's Ministry of Finance previously said that the subsidization level will drop to 30 percent and will be completely abolished by 2022.

EU urges for more involvement in BRI

Despite delivering many benefits and making progress that has been acknowledged by international parties since the scheme was launched in 2013, the BRI still has big room for improvement and bringing in more international players might just be one area.

"After BRI was launched, a lot of our members have been very interested in the program and were asking us urgently where they can get project information; is there an information service number they can call," said Wuttke.

Companies in Europe have been very eager to join the program and share a piece of the cake, according to him.

However, according to the European Chamber's report, only 20 of 132 survey respondents report having bid on a BRI-related project. Participants are also overwhelmingly multinational corporations (MNCs), with only five identifying themselves as small and medium-sized enterprises (SMEs).

More than half say that there is insufficient information available to companies seeking to make bids and nearly 40 percent say that procurement systems for BRI-related projects are not transparent enough, according to the report.

China's Foreign Ministry responded that for the six years since the BRI was launched, many international companies including European businesses have participated in many projects, so the European Chamber's report may be one-sided.

European companies such as Siemens have cooperated with hundreds of Chinese companies to explore BRI markets, Schneider Electric also conducted deep cooperation with many Chinese companies in infrastructure development projects along BRI countries, and many European logistics companies such as DHL also participated in the construction of logistics systems in many countries, Geng Shuang, the ministry spokesperson, said Thursday at a press conference.

Geng emphasized that the Chinese government will continue to encourage and lead Chinese companies to participate in BRI projects based on market rules and encourage them to work with local companies in the third market to jointly achieve a bigger development space.

(Video by Liu Yang who also contributed to this story)