When the European Union and Japan signed an agreement on supporting “quality infrastructure” last week, no one mentioned China or its Belt and Road initiative. Then again, they didn’t need to. The terms of the agreement, and the speeches of its signatories, dripped with disapproval of everything that BRI opponents fear the scheme embodies.

Concern one: “Connectivity must be sustainable in financial terms” and not create “mountains of debt,” warned Jean-Claude Juncker, the head of the European Commission, amid worries that the BRI puts an unmanageable burden on financially vulnerable countries.

Concern two: Juncker argued that infrastructure should create “interconnections between all countries in the world and not merely dependence on one country.” The BRI, by contrast, would perpetuate China’s position as the hub of global merchandise trade.

Concern three, this time from Prime Minister Shinzo Abe: The Indo-Pacific must be “free and open” in order for connectivity to work, he said. Most of China’s neighbors are concerned that its aggressive maritime strategy will intrude on the sea lanes of the Indo-Pacific, which carry a large proportion of the world’s trade — not to mention most of Japan’s energy supply.

Concern four: Juncker and Abe also talked of environmental sustainability, even as critics of the BRI warn it will water down the high standards associated with multilateral infrastructure lending.

None of these concerns will come as news to the leaders of the countries that have signed up to Chinese President Xi Jinping’s infrastructure program. For cash-strapped developing countries, Chinese finance is sometimes the only option. Three years ago, the United Nations estimated that the emerging world would have to invest $2 trillion a year in infrastructure until 2030 “just to support expected rates of growth.” That’s probably a significant underestimate — and even that will be nearly impossible for most developing countries to manage out of their own resources.

To many nations, therefore, Beijing’s lines of credit and aggressive timelines look very much like offers that can’t be refused. At least, not unless there’s an alternative.

Western finance should have provided one. Unfortunately, finance is failing at its job, partly because of stupid and counter-productive policies at home. Unconventional monetary policy and extra-stringent regulations on finance since the 2008 global financial crisis mean that Westerners’ savings are sloshing around in their home countries, earning pitiful rates of interest, while the real need (and returns) are in the developing world.

It is this problem that Abe and Juncker think they might have a chance to remedy. Japan and Europe are home to two of the largest pools of idle capital. Unless regulators and governments work harder to put that money to work in the rest of the world, it’s not going to move — and both the global south and the global north will be poorer as a result.

The truth is that Japan is already a big lender to Asia. Here in New Delhi, over 5 million people a day ride on a world-class metro built in record time; the majority of the financing came from Japan. When its third phase is completed, Delhi’s metro will have 330 kilometers of lines — 70 percent more than Tokyo’s.

Nor is India an outlier. Japan is still the largest lender to projects in China’s own backyard of Southeast Asia, financing projects worth $367 billion as compared with China’s $255 billion.

But Japan’s approach so far has failed on three counts. It hasn’t expanded sufficiently into Africa. It hasn’t built a brand with international significance to compare with the BRI. And it hasn’t made enough of a case for the values that it embeds.

Brussels can help with all three. Buy-in from the European Commission needs to be followed up by a hard look at the post-2008 regulations and requirements that prevent pools of European capital from leaving the continent. If Europe is serious about competing with China in the emerging world, its private sector needs to be incentivized to take risks there.

This isn’t just about power politics, or future income streams, or common economic benefits. Allowing the BRI to water down environmental standards for global infrastructure — letting poor countries build white-elephant thermal power plants for lack of financing for renewable energy, for example — would render Europe’s commitment to fighting climate change virtually meaningless.

Above all, building infrastructure is about values. Financing projects that are sustainable, have buy-in from the local communities, account for gender and other social deprivations, and respect the rule of law and global norms is the best way to proselytize for and defend the values that Japan, Europe — and countries such as India — have in common.

Mihir Sharma is a Bloomberg Opinion columnist.

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