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What’s Next for the China-CEE 16+1 Platform?

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What’s Next for the China-CEE 16+1 Platform?

After the China-CEE Summit in Sofia, the “16+1” initiative is heading toward the EU.

What’s Next for the China-CEE 16+1 Platform?

Bulgarian Prime Minister Boyko Borissov welcomes Premier Li Keqiang of China at the National Palace of Culture in Sofia for the 7th Summit of Heads of Government of CEEC and China (July 7, 2018).

Credit: AP Photo/Valentina Petrova

On July 6 and 7, the seventh summit of the heads of governments of the countries of China and Central and Eastern Europe (CEE) took place in Sofia, Bulgaria. Despite the rumors that have been circulating for the last few months about reducing the frequency of meetings, it was announced that Croatia will host the summit next year. In 2020, the role of host will again fall to China, for the second time in five years.

At the meeting in the Bulgarian capital, over 20 cooperation documents were signed, and Prime Ministers Li Keqiang and Boyko Borissov opened the “China-CEE agricultural demonstration zone.” Although Li suggested that the CEE countries should participate in the construction of various types of industrial parks, the agricultural emphasis seems to be symbolic in the light of all the achievements of the “16+1” format so far, and the general developmental offer of the CEE region.

So far, the six-year history of the Chinese initiative in Central and Eastern Europe consists of growing trade exchange (in favor of Beijing) and consolidation of political influence in Serbia, the Czech Republic, and Hungary, combined with relatively small Chinese investments (according to Li $10 billion, though, as in the case of Serbia or Montenegro, mostly in the form of loans) and negligible CEE investment commitment in China ($1.4 billion). Therefore, it is worth paying attention to the wider (geo)political context in which Central and Eastern Europe has found itself over the past year, and what position the region currently occupies in the China-EU-U.S. triangle.

The declaration announced after the summit is quite unambiguous in this respect, placing China’s pursuit of diminishing tensions with the EU in the context of Beijing’s growing trade conflict with the United States. The document underlines the complementarity of “16+1” with China-EU relations; member states will fulfill the commitments undertaken under the Belt and Road Initiative, maintaining openness based on market rules and norms, which will complement the relevant EU policies and projects. Moreover, Sofia will become the headquarters of the Global Partnership and Cooperation Center, where, as the Chinese prime minister explained, the “16 +1” states will seek ways to incorporate their collaboration into EU principles in the context of globalization. Therefore, one may conclude that China will try to integrate the “16 + 1” more closely into the framework of its relations with the EU.

An important issue in this respect is the signal sent to the largest opponent of the format — Germany — by inviting Berlin to create a tripartite formula of cooperation with the CEE and China. Such a political hierarchy of Chinese partners in Europe is confirmed by the fact that, after the Sofia summit, Li went to Berlin where, in contrast to Donald Trump’s antagonistic rhetoric toward Beijing, Chancellor Angela Merkel praised China for opening itself to foreign investments. Merkel further confirmed that Germany (that is, the EU) and China want to maintain the status quo regarding Iran’s nuclear agreements, which have been undermined by the United States. On the occasion of the meeting in Berlin, BASF SE signed a preliminary agreement for the construction of a chemical complex in Guangdong province (worth $10 billion). Importantly, the German conglomerate will be the sole owner of the enterprise, the first foreign company in China to have such an arrangement.

In this context, it is worth paying attention to the list of absentees at the meeting in Sofia. It has become a practice of “16+1” that the vast majority of countries send their prime ministers to attend its annual summits. The exceptions in this regard are Poland and Lithuania, represented this year by Deputy Prime Minister Jarosław Gowin and Finance Minister Vilius Šapoka, respectively.

The absence of the head of the Lithuanian government was connected with the celebrations for the 100th anniversary of the country’s regaining independence. Because there is no position of deputy prime minister, Lithuania was represented at the “16+1” meeting by the head of the Ministry of Finance, which is the department most actively involved in cooperation with China. In Sofia Šapoka declared that Lithuania wants to become the gateway to Chinese financial services for Europe. Actions in this direction are confirmed by the decision of the summit to establish the “16+1” center for the coordination of financial technologies in Lithuania and the announcement of the organization of the China-CEE Fintech Forum next year.

In contrast, Polish Prime Minister Mateusz Morawiecki missed the summit in order to attend a pilgrimage gathering of the religious and politically ultra-conservative radio station Radio Maryja at Poland’s Jasna Góra Monastery in Częstochowa. Inevitably, such an ostentatious rejection of a meeting with the Chinese prime minister will not have gone unnoticed in Beijing. On the other hand, Deputy Prime Minister Jarosław Gowin, representing the Polish government, emphasized in Sofia that “Poland appreciates the multidimensionality of the 16+1 summit,” adding that the Polish government is “aware that for some European countries, the summit is a unique opportunity to conduct high-level political dialogue with China.”

Was this phrase meant to indicate that “16+1” is not necessary for Warsaw to conduct relations with Beijing? If we assume the logical consistency of such a statement, it means that, in Morawiecki’s view, Poland is too big and significant a country to be treated in line with the other 15 European member countries of the format in its relations with China. How, then, should one comprehend the later part of Jarosław Gowin’s speech about the usefulness of “16+1” for uniting the region, in which Poland wants to be a leader:

16 + 1 may be one of the instruments to build greater cohesion in the region, alongside the Visegrad Group or the Three Seas initiative, of which Poland is an active promoter. It can also play a constructive role in the context of the development of geographically balanced transport routes and logistic links between the European Union and China.

The Sofia Declaration also refers to the Three Seas initiative as being consistent with the implementation of the Belgrade-Budapest railway project and its potential connectivity with the ports in Albania, Montenegro, Croatia, and Slovenia. What is more, the participants of the summit declared their willingness to increase the synergy between the BRI, Trans-European Transport Network (TEN-T), and their extension to the Western Balkans, for the benefit of European integration. These activities are to take place based on “16+1,” the EU-China Connectivity Platform and Eastern Partnership.

If, in order to create a political consensus with Brussels, Beijing starts to operate in CEE in accordance with the acquis communautaire (which is already evidenced by the changes in the regulations for the Budapest-Belgrade railway construction), if it opens its market to European investments (as seen in the example of Germany), and if it inputs “16+1” projects directly into the mechanisms of Chinese-EU relations, it may turn out that “16+1” will fulfill its formula. This might occur without Poland’s active participation, but with a significant, though discreet, role for Germany.

Bartosz Kowalski is Assistant Professor at the Department of East Asian Studies of the University of Lodz and Research Fellow of its Centre for Asian Affairs.  He is the co-author of the forthcoming book China’s Selective Identities: State, Ideology and Culture (Palgrave Macmillan, 2018).