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What to Expect at the 2018 China-CEE 16+1 Summit

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What to Expect at the 2018 China-CEE 16+1 Summit

What to watch for as the premiers of China and Central and Eastern European countries gather in Sofia.

What to Expect at the 2018 China-CEE 16+1 Summit

Chinese Premier Li Keqiang, left and Serbian Prime Minister Aleksandar Vucic arrive for a group photo during China – Central and Eastern Europe meeting of heads of government in Belgrade, Serbia (Dec. 16, 2014).

Credit: AP Photo/Darko Vojinovic

It is always a big show when the premiers of China and 16 Central and Eastern European countries meet, and Sofia 2018 will be no different. China-CEE watchers (and the rest of interested folks) should be focused on whether and how the platform addresses the issues of economic underperformance, strained relations with the EU, options of new members, the question of the final document, and the location and timing of the next premier summit.

The economy has been at the heart of the platform, and most likely it will remain there. At the same time, the lack of economic success stories is also its biggest challenge. Major headlines notwithstanding, China-CEE trade has mostly stagnated since the 16+1 platform was initiated in 2011-2012 and Chinese investments in the CEE region have grown only very modestly. The reality has been simply far lagging behind expectations and some early announcements.

It should be one of the main issues to watch whether China and the CEE countries address the issue of economic underperformance or choose to look elsewhere. So far, the latter has mainly been the case, with perhaps the only exception being the organization of various types of forums, fairs, and the like. What is missing, however, are indications that systematic steps would be taken to fix the problem. This would for instance include announcements of improved market access for CEE products (agricultural products may be a candidate here, although with mostly symbolic importance), or adjustment of Chinese infrastructure construction offers (which so far have been not in line with EU regulations, or simply not interesting for the EU members).

It may be even less likely that something can be done about the elephant in the room — the fact that Chinese investors by and large seek something that the CEE countries offer. While Chinese FDI in Europe is mostly acquisitions of high-end technology or brands, the CEE offers the greenfield location for serving the EU market.

When it comes to the narrative (as opposed to the ‘real’ development), the point of focus should be whether China (and to a lesser extent CEE countries) try to manage the inflated expectations. The previous premier summit in Budapest 2017 already showed some indications that this might be happening but there is also contradictory messaging in Chinese media, which continue to paint the picture of China being a leading economic player in the CEE region — something which is apparently out of the question for the foreseeable future.

Politically speaking, the platform has been accused of affecting the unity of the EU and being a case of China’s “divide and rule” approach in Europe. While these voices have been around since the very beginning, they have grown stronger more recently.

Some CEE countries give enough reasoning for this, with their supportive stances of China going against the EU common position (Hungary in the case of human rights lawyers, for example) or offering controversial flattering (Czech president calling his own country an “unsinkable Chinese aircraft carrier” and wanting to learn from China how to stabilize society).

China, for its part, did not communicate clearly enough either. On the one hand, the official position appearing in the summit documents and formal communication is that 16+1 platform is part of EU-China relations. Elsewhere, however, Chinese experts and even officials invite the EU to cooperate in developing the CEE region together (the twist being of course that most of the CEE is actually part of the EU) or even seeing itself as a better alternative for the development of the CEE region. China is sometimes also said to be testing whether the EU rules are really valid in the CEE region, such as when it comes to public tenders.

The question for the 16+1 summit, therefore, is what kind of signalling will be conveyed to the EU, ahead of its own summit. China might choose to comfort the EU with some additional assurances and perhaps concrete reforms, but we may also see a continuation of the mixed messaging if not escalation of the opposition rhetoric.

Membership of the platform has been an issue since the beginning, namely the question why precisely these 16 countries are part of the process. In reality, China has been the decisive factor in inviting countries, and it is largely expected to be so at present. In the run-up to the summit, Greece announced its interest in joining the platform, with Ukraine trying to join for years already. Belarus, Moldova, and even Austria, might have similar aspirations.

The membership question is important because it sets the direction for the platform. Currently, the platform groups together former communist countries which either are the EU members (11 of 16) or which have membership aspirations. Any of the new members would shift the balance either toward the EU (Greece, possibly Austria, or another EU country) or another way (Ukraine, Moldova, Belarus).

Finally, it has become the norm that the premier summit would finish with the release of guidelines, including the announcement of the location of the next leader’s summit. Yet there are some question marks about whether Sofia will continue in the same vein. The first novelty is the timing of the Sofia summit, taking place in July — only about a half a year since the summit in Budapest convened. There is a legitimate doubt whether the platform has produced enough new development to deserve new guidelines and the assessment of the previous one (it has also been a custom to include the list of “achievements” of the previous year in the summit guidelines).

There are further rumors that perhaps the summitry custom would be adjusted. Already, Reuters has reported that there is an idea to change the annual premier summit to one occurring on a biannual basis. Scaling down may be a concession to the EU, but also it would beg the question of whether the change is because of the lack of substance the platform is producing.

Still, there are suitable face-saving options if scaling down does happen. It might be that the next summit would take place on the sidelines of a more significant event (the EU-China summit, Belt and Road Forum, Expo, etc). This would also ease the problem of finding time in the busy schedules of leaders for a meeting to take place.

Besides the issues discussed here, it is quite likely that the summit will yet again announce some major openings, like new financing mechanisms or memorandums about some grand infrastructure projects. These should be taken cautiously, as the track record of the previous years show. At the same time, it may well be the case that besides the “usual” business, the Sofia summit would bring some signals about the adjusted direction of the 16+1 cooperation.

Richard Q. Turcsanyi, Ph.D. is an Associate Research Fellow at the Institute of International Relations Prague and Assistant Professor at Mendel University in Brno.