With the sixth premiers’ summit of China-Central and Eastern Europe (CEE) 16+1 cooperation in Budapest, there seem to be growing tensions between China and Western Europe over this initiative. There is little economic rationale for that attitude, and it is in no one’s interest.
Even from the beginning of the 16+1 process in 2011-12, Brussels, Berlin, and elsewhere in Western Europe (and perhaps beyond) had concerns about the initiative. These were fueled by the somewhat opaque organization and non-transparent nature of the unusual cooperation. Yet since 2013 the situation had calmed down a bit, partly due to the regular presence of European External Action Service (EEAS) officials at the official meetings of the platform and their involvement in drafting the documents. Comments in recent months, however, suggest that the truce might be over.
Voices from Germany and EU institutions see Chinese activities in the CEE region as affecting the unity of the EU, undermining high-level standards, and exercising negative influence over EU members and potential members’ strategic choices.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
China, for its part, used to stress that 16+1 cooperation does not go against the EU but is in line with the EU-China “strategic partnership” agenda. However, this may be changing now. Wang Yiwei, professor of Renmin University, commented to the Global Times that “currently, the EU and the U.S. can no longer provide help to boost CEEC economies.” Director of Department of European Studies at CIIS Cui Hongjian, in his piece for the same outlet, used unusually strong words when he suggested that “sophisticated” outsiders” and “onlookers” do not understand the true feelings of the people in CEE. Cui further observed that “China’s economic presence in Central and Eastern Europe is too strong to be shaken.”
What is similar in these and a number of other voices from China is that they treat the CEE region as a playing field for China and the West – hence not a part of the Western developed world per se. In fact, Chinese politicians, scholars, and media casually refer to the 16+1 platform as “South-South” cooperation. This is problematic at various levels and is not going to do good for anyone involved, including China.
First of all, contrary to what China appears to claim and Western Europe seems to take for granted, the economic presence of China in CEE is very limited and has not seen any significant growth in the past five years. This has been shown by various media, including The Diplomat, but so far this has had little impact on the general perception of the issue, which sees China as a major player in the region. China is helping to sustain this discourse and at times is being supported by voices from CEE. Hungarian Prime Minister Viktor Orban, for instance, mentioned in his speech at the Budapest summit that “Central and Eastern Europe has become the most competitive investment environment on the continent.” Similarly, Macedonia’s president talked recently about the failure of the EU in Balkans, which China can help to undo.
Although these voices seem to suggest that the role of the Western Europe in CEE is declining and China’s is growing, the reality is that Chinese economic presence in the region is minimal from the perspective of both FDI and CEE exports, and little has changed in these regards since the founding of the 16+1 platform.
Even in the countries that are seen as experiencing a major wave of Chinese investments, such as the Czech Republic, Chinese FDI is below other investors’ and falls far short of headline announcements. As an example, during Xi Jinping’s 2016 visit, investments of more than 3 billion EUR were supposed to arrive by the end of that year and more in following years. Today, the Czech Republic is still waiting on those investments, and a consensus has formed that the expectations were inflated.
Hence, the previous five years of China-CEE cooperation have produced little in the way of actual economic outcomes, and it is difficult to speak of a Chinese economic presence in the region that could play any significant influence or that has been at a considerable rise. This may perhaps change, but today’s rhetoric is no different from that of five years ago – we are still looking toward the future when talking about the Chinese economic presence in CEE.
The Budapest summit of 16+1 premiers, which concluded on November 27, did not alter the situation in a significant way. The highlight is that China promised to invest 3 billion EUR in infrastructure projects in the region – something which China has been consistently saying since at least 2014. Another outcome was the announcement that the construction deal for the Budapest-Belgrade railway will be offered in a public tender. This is clearly a response, perhaps a positive one, to the EU objections (although it remains to be seen to what extent the tender will be only a formality), but it also moves the whole project a few years back.
While it remains questionable what role China will play in the economic development of the region, it is almost guaranteed that Western Europe will sustain its dominant position in the area. It may not be the best position for CEE to be so dependent toward one direction, but there is little that can be done in this regard – geographic and structural economic factors talk stronger than wishful thinking.
If China continues raising its stakes ever higher, it risks that the fall-out in terms of disappointment will be even worse. The same applies to the CEE countries – if they sacrifice too much for the development of relations with China, they may find themselves with far worse relationships with their main partners in Western Europe and little substantial benefits coming from China. Hungary is a good case in point — it supported China in its South China Sea position and blocked an EU statement on human rights, but has not received anything in return.
China and CEE should take into account Western Europe’s worry – it is not in the interests of any of the three to have a divided region. On the other hand, Western Europe should acknowledge that the CEE countries have legitimate right to develop separate relations with China, be it within a purely bilateral setting, the 16+1 (which actually is a network of bilateral relations more than anything else), or perhaps other platforms (such as, for instance, the V4+China could be one, although that is not likely at present). Naturally, these separate relations should follow the EU’s common approach to China, in the same way as any Western European country should do in its independent dealing with China. At the end of the day, China is a hugely important partner for the EU in whole and can be an important complementary partner of the CEE countries as well.
Richard Q. Turcsanyi is the Director of STRATPOL – Strategic Policy Institute in Bratislava, and Assistant Professor at Mendel University in Brno. The text was produced as part of the ChinfluenCE project (www.chinfluenCE.eu), run by Association for International Affairs (AMO).