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This report assesses Chinese economic activities in the Western Balkans based on open-source data collected by CSIS and identifies key trends and China’s main avenues of influence.
The president of Serbia recently greeted a Chinese medical team arriving to assist the fight against COVID-19, underscoring Beijing's diplomatic efforts to give aid and advice to countries participating in its Belt and Road Initiative, Nikkei reports.
President Xi Jinping recently floated the idea of creating a "health silk road" paralleling the Belt and Road, which could further China's "mask diplomacy" efforts to provide medical supplies abroad and portray itself as a provider of international public goods. However, experts note that disinformation efforts by Chinese officials about COVID-19 are prompting pushback and could hinder such efforts.
China's Belt and Road Initiative has led to an increase in infrastructure investment in Serbia, and this past month Serbia purchased Chinese military equipment and Huawei security infrastructure as well, signalling a growing partnership between the two countries, Nikkei reports.
Through means, motive, and opportunity, China's expanding economic footprint and political avenues of influence in the Western Balkans have deepened and widened with profound implications for the region’s economic development and long-term dependency.
The European Commission has become increasingly critical of various Chinese investments within the EU, fueling an ongoing debate within Europe about investment screening. While the EU released a framework for foreign investment screening implicitly aimed at China in November 2018, the debate has exposed cross-cutting divisions within Europe. Looking ahead to 2019, we should not expect a clear resolution anytime soon.
China's Belt and Road is commonly visualized as a train carrying commerce across Eurasia. But a train does not adequately capture BRI’s significance or scope. Instead, a Chinese flag is a better representation. Whether it is China’s intention or not, the increasing connectivity the BRI brings comes hand in hand with exposure to Chinese culture.
The EU became wary of China's infrastructure investment in Central and Eastern European countries. Hungary was forced by the EU to conduct a public tender for the Hungarian segment of the Belgrade-Budapest High-Speed Railway, which would delay the project completion until 2023.
"China has lavished investment pledges on Balkan states as it prepares for a summit with 16 EU countries and aspiring members, stoking fears in Brussels and influential national capitals of an effort to divide the bloc" reports the Financial Times, citing data collected in collaboration with the CSIS Reconnecting Asia Project.
In the past decade, China has opened an investment bridgehead and is building a transport network in Central, Eastern, and Southeastern Europe. The level of engagement by Chinese state-owned companies, political leaders, diplomatic representatives, lending institutions, universities, and cultural organizations is gradually redefining the relationships between China and these regions of Europe.
China has achieved remarkable infrastructure progress in recent years. As the Chinese say, if you want to develop, build the road first; and as investors say, no infrastructure, no FDI.
Broad generalizations about “Belt and Road projects,” whether positive or negative, are not particularly helpful and could even be dangerous when formulating policy. A more successful approach is likely to involve nuanced and localized policies in the same way that China has adopted localized approaches to infrastructure investment under the BRI umbrella.
The political damage Chinese investment in the CEE has created for the EU is already visible in its inability to act cohesively vis-à-vis China on trademark foreign policy issues, namely upholding the international rule of law and protecting human rights.
Chinese investments in Central and Eastern Europe are raising concerns about transparency and accountability, but for now, the risks are relatively manageable given the modest scope of investment.
Premier Li sees the region as key to Belt and Road push
At the onset of Beijing’s sixth 16+1 forum, China’s involvement with Central and Eastern Europe under the Belt and Road is beginning to take shape. Results on the ground have proven mixed so far, and a more nuanced local picture is slowly emerging; with some reasons for concerns but also much reassurance provided.
Beijing’s star is rising in central and eastern European nations,” reports the Financial Times
The magnitude of the Balkan Silk Road project poses a mixture of opportunities and policy challenges for countries engaging in or seeking to benefit from its implementation.
Our “Big Questions” series brings together leading scholars, former policymakers, and top industry experts to tackle critical questions. In the seventh part of this series, we asked a group of experts to comment on China's growing infrastructure investment in Central and Eastern Europe (CEE).