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European Union

For the EU to connect with Asia, it must learn the ‘Asian way’ of doing business

  • The European Commission proposal does not talk about building ties based on business
  • European policy talks about pushing Asia to adopt rules and the Western way of doing things
PUBLISHED : Sunday, 28 October, 2018, 8:02am
UPDATED : Sunday, 28 October, 2018, 11:57am

In September, the European Commission and the European High Representative of the Union for Foreign Affairs and Security Policy released a joint communication regarding a “vision for a new and comprehensive strategy to better connect Europe and Asia”.

The motivations behind this move are easy to spot. As the connectivity strategy notes, Asia represents 60 per cent of the world’s population and accounts for 35 per cent of EU exports (€618 billion) and 45 per cent of the EU imports (€774 billion). Plus, the region might require over €1.3 trillion per year for infrastructure development to sustain its current economic pace (against €1.5 trillion in Europe between 2021 and 2030).

Yet, things do not add up. On the one hand, a press release illustrates a major connectivity potential with a practical, promising and exciting map. On the other hand, the policy proposal itself does not convey the message it is supposed to convey.

The European Commission does not talk about building ties based on business, it does not look for shared interests and does not think in terms of pragmatic mutual interests.

Instead, the commission talks about applying the EU model of rules-based institutions and mindsets to Asia. European institutions see connectivity as a matter of promoting market access principles and insist on making Asia “adhere to high standards of transparency and good governance”. In short, European policy talks about pushing Asia to adopt rules and the Western way of doing things, which leads to an important question: how can we bridge the gap?

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The European mindset is mostly one of business stability and business certainty, therefore the current policy message unsurprisingly focuses on creating rules and building certainty. This is not a bad thing, as many Asian countries are not, for instance, famous for the strength of their legal standards or the stability of their financial systems.

Yet, Europe is so focused on building rules that the connectivity policy only mentions that the EU “intends to support platforms for matching European and Asian businesses, with a focus on small and medium-sized enterprises, and envisages creating a Business Advisory Group for Euro-Asian connectivity” at the last paragraph, immediately before the policy document's conclusion. Doesn’t it sound surprising?

If the purpose is to create a real connectivity with Asia, the European mindset needs to evolve

From the Asian perspective, what matters is whether there are opportunities to construct tangible win-win business relationships. Said differently, building connectivity based on principles – “the European way” – seems far from an Asian connectivity model based on business, people and networks.

Don’t get us wrong, the Europe-Asia potential is immense and rules will matter. But the difference will come from operational relationships more than from rules-based ambitions.

What that means is simple. If the purpose is to create a real connectivity with Asia, the European mindset needs to evolve and the discourse will have to change. The key, perhaps, is to realise that things get done in the region because the modus operandi is, precisely, to get things done.

Dr Antoine Martin and Philippe Bonnet, co-founders, Asia-Pacific Circle