An ongoing debate here in Britain has been hotting up recently. It revolves around a simple question: should the government OK a £33 billion ($53 billion) project to deliver a high-speed rail link between London and England's second city, Birmingham? Those against argue that it’s a monumental waste of money at a time of austerity, and a service that will only be used by an 'elite' minority. Those in favour say it’s a crucial element of Britain's future transport and regional economic strategy.
So those opening their newspaper in Britain yesterday morning would probably have found it interesting to read about China's new 819-mile high speed rail link between Beijing and Shanghai, completed in barely three years. The contrast between China and Britain on this, and many other technology/infrastructure projects, is striking: even if the British rail project goes ahead, it won’t happen until 2019, and won't open until 2026. What's more, the London-Birmingham line is a one-off project, not a component of a major national railway strategy as in China.
Perhaps it was no mere coincidence, then, that Premier Wen decided to fly directly into Birmingham (rather than London) to kick off his visit to Britain last week. After all, it’s assumed that when Britain puts the high speed project out to tender there will be a bid from China. Indeed, the Chinese ambassador to the UK is already reported as having affirmed that China has the necessary ‘knowledge, expertise and experience.’
More broadly, though, China's high speed rail initiative highlights wider political issues relating to how Chinese business is sometimes perceived in parts of Europe:
China & Public Works: Some European capitals feel that there isn’t a level playing field between China and the EU on procurement and infrastructure projects, with the EU opening up to international actors but arguing that it’s denied the same opportunities to compete in China, where numerous major infrastructure projects are underway. This frustration has been simmering for some time, and has intensified as a result of the economic downturn. Just this month, for example, a controversial Polish highway contract with a Chinese vendor will be scrapped. The agreement, for a 30 mile highway from Warsaw to the German border, was awarded to China's COVEC in 2009 amid accusations of dumping by the Chinese company (its bid was 60 percent lower than the guide price). Adding to the controversy was the fact that the European Investment Bank, an institution funded by Europe's taxpayers, was financing the project.
Made in China?: Major question marks also remain over China's commitment to respecting intellectual property, an issue that will no doubt come up during Wen's talks with German Chancellor Merkel this week. As the Beijing-Shanghai bullet train was completing its tests, both Germany's Siemens and Japan's Kawasaki accused the Chinese train manufacturers of using stolen technology. The Times, meanwhile, reported that the Japanese Ministry for Economy, Trade and Industry would consider mounting a legal challenge against any rail bid won by China in Europe, where Japanese companies could more effectively sue for intellectual property infringement.
For now, the politics of public Chinese business projects in Europe remains fraught with the tension between rational free trade economics and China's reputation on intellectual property, reciprocity of access to markets and commitment to local job creation.
Perhaps by the time the London-Birmingham link opens this will all be a distant memory. Of course, we won’t know that until 2026.
Stewart Watters is an editorial assistant with The Diplomat