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One Belt, One Road Project Causing Concerns Within The EU

October 9, 2017 12:05 am Published by

In his recent State of the Union speech, the European Commission President Jean-Claude Junker warned that foreign direct investment (FDI) in the European Union (EU) should be made "with transparency, scrutiny, and debate." Many believe the comment was directed mainly towards China and its aggressive acquisition strategy throughout Europe.

Concerns have been growing within the European Union since 2013, when Chinese President Xi Jinping unveiled a huge infrastructure program across Eurasia, known as the Belt and Road Initiative, or the One Belt, One Road project. This project aims to develop a vast network of energy hubs and transport corridors by air, land, and sea. Although it is not yet clear to what extent Eurasian trade by land is expected to take business from the traditional sea routes, but it is certain to have a major impact on the world economy.

One of the main One Belt, One Road corridors in Europe will be the so-called Balkan Silk Road, which will connect the Greek ports of Piraeus and Thessaloniki to Budapest, Hungary, through the Former Yugoslav Republic of Macedonia and Serbia. At the core of the Chinese expansion into the Balkans is Hungary, the third-largest destination of Chinese FDI in Europe, with nearly €2 billion having been invested between 2000 and 2015.

This push from China has meant that Europe has become the top destination for Chinese FDI, accounting for 23 percent of the total in 2013. In 2016, the United States exceeded the European Union by just $2 billion ($48 billion versus $46 billion).

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