EU’s ruffled feathers

The EU has demonstrated jealously right from the start of the 16+1 format. The EU claimed China had not consulted with it prior to launching the initiative and accused the Asian economy of trying to divide and conquer the already struggling union. Western Europe has repeatedly expressed concerns that the Central, East and Southeast Europe (CESEE) governments will lobby for Chinese interests and provide access to the union without China having to uphold EU’s legislation and technical standards.

At a time of internal divisions within the union, where the old members are still much richer, and the new ones are still poorer, the arrival of wealthy China with a global vision of its own and the promises of generous investments unsurprisingly attracted the CESEE countries. They suddenly had a global superpower at their side with whom to forge their own bilateral relations without having to co-ordinate everything within the EU. Rather than becoming proxies for Chinese interests, the CESEE countries, it would seem, are using this opportunity to pursue their own interests for once. Will China reap some geopolitical benefits? Most likely.

Heart of Eurasia

So, why did China pick the CESEE countries for the project? First, the entire philosophy behind BRI and, consequently, of the 16+1 initiative, is the development of regions. The 16 CESEE states have not been unified under the umbrella of an international entity and projects are being developed as part of bilateral relations between China and each respective country. However, all these projects are part of a more comprehensive concept for regional cooperation at the geographical point of entry of the BRI corridors into Europe, both land and maritime.

Second, the cross-border initiatives to establish land and sea transport corridors between China and Europe, thus in essence restoring and expanding the ancient Silk Road, are an integral part of the BRI’s infrastructure pillar. CESEE plays a pivotal role in this project as it is geographically adjacent to Russia, Central Asia, Turkey and the Mediterranean, and on top of that it is an entry point to the European Common Market.

The implementation of this ambitious development programme requires regional thinking and demands the alleviation of discrepancies in the regions through which the transportation and economic corridors pass.

Walking the walk

The 16+1 format, which is now turning into one of the landmark projects of China’s foreign policy during the Xi Jinping era, is a form of co-operation that has been unheard of until recently. The idea, conceived only in 2009, was formalised in 2011 during a meeting in Budapest and was established in 2012 in Warsaw. It was later reassigned as part of the BRI.

At the time the 16+1 notion was perceived, China already had strong economic ties with the Western European states, but post-communist Central and Eastern Europe had remained outside the scope of China’s business on the continent and the forging of relations had to start from scratch. The Warsaw meeting was the first time China vowed to shower the countries from the Balkans to the Baltics with billions of dollars in loans and investment. Bosnia and Herzegovina was the state that was promised the largest lump of money, followed by Serbia and the Czech Republic.

In just five years the initiative has expanded massively. One of the success stories is the development of rail transportation as existing and new railways have linked dozens of Chinese cities with European ones, providing a major boost to bilateral trade. Now that the initial excitement has passed, several trends have become apparent. Chinese investments in the region and bilateral trade have grown exponentially but are still a fraction of those between China and Western Europe.

As the poorer European continues are struggling to overcome their economic problems, China’s BRI framework is a welcome opportunity for improving infrastructure and enhancing economic relations. The price that Brussels is paying for its inability or unwillingness to help these countries is the soaring importance of China as a provider of funding and a foreign trade partner in a region, which is already somewhat immune to EU optimism. True, the 16 countries are complaining about the discrepancy between the objectives and the outcomes of the 16+1 projects, about China’s proclivity to provide loans rather than invest and about the restricted opportunities for European business in the still closed Chinese industries.

The critics should remember however, that this project started only six years ago and since its scale is massive, its development will require some time. Surely there will be failed projects and delays, but overall the 16+1 forum has the potential to go far beyond the realm of infrastructure construction by laying the foundation for future economic development and growth.

 

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