During his first journey to Europe since the outbreak of fresh tensions with the West in 2020, president Xi Jinping only paid a visit to Hungary and Serbia. The times of receptions in Warsaw, Prague and Athens are over. In 2008, erstwhile Europe and the US were undergoing a major economical and financial crisis, respective countries set their eyes on China. At the time, China was seen as the rescuer for many ailing European economies. The countries that opened their doors to Chinese investment included a full scope of countries from the Baltic states to Greece.
In an effort to accomplish better integration with the region, China launched the alleged 17+1 partnership. The geo-economic plan appeared to be a win-win situation for both sides: Central and east Europe (CEE) was in urgent request of investment and China was far from posing a threat to the countries’ sovereignty. Simultaneously, it was advantageous for Beijing to establish a road to penetrate Western European markets via the east Corridor. Sixteen years later, the only countries that stay strong supporters of the Chinese are Hungary and Serbia. The 17+1 partnership has suffered the withdrawal of the Baltic states in fresh years, followed by a cooldown by the Polish government under Tusk. The fresh administration in Warsaw supports further integration with the EU, as opposed to the different way preferred by the erstwhile PiS government.
Chinese commitments did not translate into investments or real economical growth. Moreover, the Russian war in Ukraine, in which China managed to rescue the Russian economy from collapse, made the Central and east Europeans cautious about further engagement with China.
Shortage of real investments
CEE and the Balkan countries were erstwhile viewed as China’s gateway to Europe. As a result, China pledged investment as part of the Belt and Road Initiative. For instance, the number of Chinese investments in the Balkans reached 136, but 61 of them were located in Serbia. All these investments have not promoted local employment, as Chinese companies recruit workers either from China or another Asian countries. In terms of investments, China is inactive behind the EU. In 2021, 61 per cent of abroad direct investment in the Balkans came from the EU. In 2021, China injected around 1.4 billion euros into various investment projects in the Western Balkan countries that are not EU members, while only 1.3 billion euros were poured into the remainder of the alleged 17+1 bloc.
The majority of Chinese investment flows into either infrastructure projects or the energy related sector, which are 2 key sectors where local economies do not have adequate resources to invest. any of these investments are controversial. For example, the celebrated Bar-Boljare road in Montenegro was nicknamed ‘the road that takes you nowhere’. This task nearly drove the tiny Balkan state into bankruptcy. At the same time, it is hard to forget the inhumane surviving conditions of Vietnamese workers in the northern Serbian city of Zrenjanin, 1 of China’s largest investments in country. In contrast, the Pelješac Bridge in Croatia and the Port of Piraeus in Greece were successfully delivered with small controversy. erstwhile it comes to investment and trade, China has a virtually negligible presence in CEE. The EU and any associate states specified as Germany, Italy and Austria are the main engines for investments, loans and another projects. China saw CEE as a gateway to the larger markets in the west of the continent. any experts saw this Chinese decision as a debt trap, by offering investment in exchange for sovereignty. Despite this, the nightmare of a debt trap seems to have been exaggerated.
Russia always matters most.
The Russian attack on Ukraine in February 2022 disrupted China’s plan to smoothly penetrate CEE. Despite tacitly accepting Putin’s actions, China has not supplied the Russian army straight with ammunition or weapons, in contrast to Iran or North Korea. This attitude was taken in order to avoid massive sanctions that the EU and the US might impose upon a stagnating Chinese economy. The acquisition of oil and gas by China has saved the Russian economy from collapse, even though China is not the only country buying Russian gas and oil, India and Turkey do as well.
However, what truly brought an end to 17+1, which might likely be followed by a withdrawal or lower engagement starting with the Czech Republic, Poland or Albania, was Beijing’s failure to condemn Russia’s actions in Ukraine. This raises a question in CEE of what China will do if Russia attacks another country in the region. While Russia might not be a danger to Greece or Albania, it is an existing threat to Poland, the Baltic states and Moldova. In addition, China is undertaking a further step by launching a informing run against the recently elected government in Prague. Chinese investments were so low that Estonia decided to prosecute an open rapprochement with Taiwan by letting Taipei open a typical Office in Tallinn. This crossed 1 of China’s red lines. Prague followed rapidly by dispatching Czech legislature leader Milos Vystrcil, making him the highest-ranking Czech authoritative to visit Taipei in decades.
For many governments in CEE, to have China as a major investor may have been a pleasant dream, peculiarly for those with an authoritarian kind like VIktor Orbán or Aleksandar Vučić. This was good as long as China did not bother them with concerns about the regulation of law or the strength of civilian society. For many others, however, China was always a partner as long as sovereignty was not in the equation. erstwhile the war in Ukraine was followed by Chinese unwillingness to criticize Putin’s actions, many CEE countries saw China from a different perspective, in peculiar those that Russia considers part of its sphere of influence.
Was China truly a serious challenge for the EU in Central and east Europe.
During the period of the EU’s worst economical and financial crisis, China provided essential loans and investments. Even at this point, China never reached more than 5 per cent of investment or trade, with the exception of Hungary and Serbia. However, for a large number of right-wing governments, specified as Orbán in Hungary, PiS in Poland, Vucic in Serbia, Andrej Babiš in the Czech Republic and the economically troubled Greece under Aleksis Tsipras, China was seen as a bargaining chip to gain leverage in disputes with Brussels. Conversely, China’s entry into CEE and the Balkans established a corridor to scope larger markets specified as Germany or the Netherlands and offered Beijing a high-profile position in an area that was considered America’s overseas backyard.
In the present circumstances, erstwhile Russia is moving a brutal war in Ukraine it is highly improbable that any country in CEE or the Balkans is going to choose the China in case of a direct conflict between the US/EU and China. The US-led NATO is vital in preventing any kind of conflict in this region, including for those who are not members of the Alliance. The EU is the largest economical partner that can barely be replaced, not even by openly EU-critical states specified as Hungary.
Dr. des. Rigels Lenja is simply a journalist, columnist and historian. He holds a BA/MSc degree in East and Southeast European Modern past from the University of Tirana. In April 2024, he defended his PhD thesis at the University of Munich’s Institute for East and South-East Europe. His investigation has focused on dictatorship, modern warfare, democracy and modern religion in the Balkan countries.
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