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Foreign Policy Governance and Multilateralism

The “16+1 Cooperation”: China’s door in Central-Eastern Europe

*This article is an excerpt of the author’s Master’s Degree thesis, discussed on 2 July 2019 at the University of Florence.

Chinese relations with Central and Eastern Europe Countries (CEECs) have seen an improvement in the past three decades. After the fall of the Berlin Wall in 1989 and the subsequent collapse of the Soviet Union, several windows of opportunity were opened for China and CEECs to engage more with one another. However, the path to mutual engagement has not followed a straight line: it can be divided into three periods after 1989 with different characteristics. During the first period, which goes from 1989 to 1998, there was actually mutual disengagement between China and CEECs. While China did not focus a lot on the region, CEECs were turning westwards.

The new élites in CEE considered China a classic communist state, thus in a certain way connected to their countries’ most recent past, from which they were trying move on. In the second period, from 1999 to 2008, China and CEECs were striving to find their respective places in the world system. While China was rising to become an increasingly global economic power – with the 2001 WTO accession as a landmark during these years – CEECs started to become part of Western security organisations (such as NATO) and members of the European Union. The third period, from 2009 onwards, has seen a considerable improvement of China-CEECs relations, which were crystallised in the April 2012 measures (also known as the Warsaw Initiative) promoted by then Chinese Prime Minister Wen Jiabao for friendly cooperation among these countries. The measures gave impetus to the creation of the so-called 16+1 Cooperation.

The 16+1 Cooperation is a regional format gathering the countries’ respective Prime Ministers, through which China engages in economic cooperation with 16 Central and Eastern European countries, among which there are 11 EU Member States – Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania Poland, Romania, Slovakia, and Slovenia – and five Western Balkans’ countries – Albania, Bosnia-Herzegovina, Montenegro, North Macedonia, and Serbia. The sectors in which the members of the format cooperate are connectivity, trade and investment, financial cooperation, scientific and technological innovation, energy cooperation, education, youth and sports, health, and agriculture cooperation. Thus, it is a wide and comprehensive agenda that grants China an important position in vying for influence in economic affairs.

Although launched under the aegis of regional multilateralism, the format has been mainly bilateral in nature: as a matter of fact, it is pushing CEECs to compete with one another in order to gain more advantages and funding from China. As a consequence, the share of investments allocated to each country varies considerably: indeed, roughly 95% of all investment in the 16 CEECs has been directed to only six of them (in decreasing order, Hungary 32.79%, Poland 19.41%, Czech Republic 14.31%, Romania 11.28%, Bulgaria 10.04%, and Slovakia 7.53%). Thus, more than being a bloc of countries, the 16+1 Cooperation is a forum that enables talks between CEECs’ and Chinese officials in order to be granted and implement common (bilateral) projects in the region.

Even though not officially linked to the Belt and Road Initiative, the 16+1 format can be seen as its natural projection, considering the important position of all CEECs involved for the land and water corridors of the BRI towards Germany and Western Europe. During the last summit of the format in Dubrovnik, Croatia in mid-April 2019, the participating countries decided to accept Greece as the 17th full-fledged member of the platform. Indeed, this can be considered a move to bring together the two initiatives since Greece (with the port of Piraeus) has been the bridgehead of the BRI in Europe. Fears of Chinese promotion of the “divide and rule” strategy inside the EU have been overcome, since from now on the now 17 members of the cooperation framework will work together with Brussels in all connectivity areas, including customs and trade. On the other hand, however, China is obviously pushing for its own agenda that is quite close to the configuration of a flourishing trading Intermarium: from Latin, “region between seas”, namely the Baltic, the Black and the Adriatic seas. Through land and sea trading corridors – such as one that connects Greece (Piraeus), North Macedonia, Serbia, Hungary, all the way up to Germany – Beijing is enhancing overall infrastructure of the region as the final “rib” of the BRI, and thus its global projection.

Moreover, there are also several economic factors that push Beijing to invest in CEECs: favourable labour cost-quality ratio, geographic proximity to Western Europe, and growing economies in most of these countries. Other reasons are related to the aim of China in pushing its companies into working according EU rules, so that they can later present themselves in Western European countries with records in following EU standards. There is, however, a mismatch between what CEECs expect in terms of economic outcomes and development through this format, and the actual Chinese investment: it must be noted, in fact, that the platform follows more the long-term geopolitical agenda of Beijing, directed towards the integration of regional/global resources. CEECs’ economies are more concerned with encouraging local employment, thus favouring and promoting so-called greenfield projects. They are also very careful in enhancing democratic governance, sustainable employment and social safeguards. Notwithstanding, since 2011 Beijing has shifted from greenfield projects and investments in the region in favour of acquisitions. In any case, in general greenfield investment has been more common in the EU Member States’ participants of the 16+1 than in the countries belonging to the Western Balkans.

Ultimately, the 16+1 Cooperation presents several main features, which it shares with other regional platforms that China has put in place with countries in East Asia, in the Middle East, in Africa, and in Latin America. These features include: (1) normative basis relying on consensus-based decision-making, voluntarism, and win-win results; (2) multilateralism considered as a tool of boosting bilateral ties; (3) loose (although expanding) institutionalisation, based on multi-level meetings; (4) Beijing-led agenda-setting; and (5) “no strings attached” funding from China (that usually comes under the form of loans).

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The Western Balkans are an important chain link in the Western ending route of China’s Belt and Road Initiative. Indeed, the projects undertaken by Beijing in this region are connected to the enhancement of transport infrastructure and the boosting of resource extraction. Another key feature is that, even though the region does not represent a big exporting market, nevertheless it can provide skilled and cheap workforce, fast developing economies in need of foreign investment, and geographic closeness to the European Union single market. However, it is not the only possible route that can bring Chinese goods to Europe and vice-versa. For the time being it is not even among the two key routes, which are the land corridor passing from Ankara/Istanbul up to Germany (or, alternatively, from Moscow to Central and Western Europe) and the maritime one from the port of Piraeus to Venice or Trieste in Italy. Hence, first and foremost, the creation of an efficient infrastructural network, which can cut transports’ costs and thus provide a cheaper alternative to other land or maritime routes, is of paramount importance for the region. Until its completion and functioning, the Western Balkans will still lag behind other preferential routes. Moreover, if Chinese economic growth will soften in future years, investment flows in the region would probably follow the same path and undergo significant reductions.

The Eurasian landmass represents for China the end-market for its excessive production capacity and for its investments. Moreover, Beijing is trying to increase the economic development of the neglected Western parts of the country, since they have historically been considered as conquering territories for the Han people. Economic development could lower the marginalisation of these regions and dismantle separatist uprisings and violence (as for example in Xinjiang). On the other hand, China can secure energy supplies from Central Asia and the Middle East, even from possible US military disruption. Since territorial integrity is one of the main Chinese national interests, it can expected that the region holds a significant (if not vital) importance for China’s strategic calculations. Investments for major projects have already been poured into the region. If this flow of investments will continue (or increase) it could hinder a greater engagement in the Western Balkans.

Similarly, a great challenge for the present and future of China is the type of relationship it will build together with the United States. The Asian continent and the Pacific Ocean are becoming the main theatres of world politics and international economy, even more so after the shift in American foreign strategy towards this region, with the renowned “pivot to Asia”. Therefore, China could focus even more eastwards, in opposite direction with BRI’s projection.

Too many interrogatives envelope the future of Chinese involvement in the Western Balkans, even because this relationship is still quite fresh and thus cannot rely on strong historical, political and economic ties, and on a possible path dependency. It remains to be seen if all factors involved – completion of the projects under construction, loans’ (in-) solvency, tightening economic standards and procedures, political reluctance etc. – will undermine Beijing’s posture to the region and vice-versa.

By Fabio Seferi

Fabio holds a Master's Degree in International Relations and European Studies from the University of Florence, Italy. His Master's thesis focused on the role and influence of Russia, Turkey and China in the Western Balkans. He has been Programme Assistant Intern at the European Policy Centre, a Brussels-based think tank, and Ad-Hoc Research Assistant for The Global Initiative against Transnational Organized Crime. Fabio’s main research interests focus on conflicts, political violence, hybrid warfare, intelligence analysis and organised crime.

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