13/11/2019

The China-Central and Eastern European Countries Initiative: What we need to know about it

The China-Central and Eastern European Countries Initiative, colloquially known as the 16+1, is an initiative launched by the Ministry of Foreign Affairs of the People’s Republic of China in 2012. It is aimed to strengthen and expand cooperation between China and 16 post-communist countries of Central, Eastern, and Southeastern Europe particularly in the fields of investment and business. The first summit was held in Warsaw and since then the representatives from the member countries meet annually to set new goals for future cooperation. In April 2019, Croatia hosted the 8th summit in Dubrovnik and Croatian Prime Minister Plenković welcomed Greece, which previously had observer status, as the 17th member of the 16+1 Initiative.

Outcomes of the 8th Summit of Central and Eastern European Countries and China in Dubrovnik

The Summit in Dubrovnik, under the title ‘’Building Bridges of Openness, Innovation, and Partnership’’, was particularly significant as it brought important changes to the 16+1 initiative. First of all, the inclusion of Greece is expected to foster transport projects in the Balkan peninsula. The Piraeus port in Athens, where the Chinese Shipping company Cosco is the primary operator, will become an entry point for Chinese products to Central and Eastern Europe.

During a series of bilateral meetings, China signed nearly 40 bilateral agreements covering areas such as agricultural and food exports, technology and education cooperation. The China-CEEC Inter-bank Association, which groups together financial institutions of Central and Eastern European countries, was further supported by its member states and gathered momentum. The website for the China-CEEC SME Coordination Mechanism, which aims to increase the overall trade volume, was established by Croatia. Also, the 16+1 Global Partnership Centre was officially established during the summit in Bulgaria. The member states were encouraged to participate in its operation to provide policy and legal advice.

In the Dubrovnik Guidelines, it is stated that China and the member states supported the early stage of EU-China negotiations for Comprehensive Agreement on Investment (CAI) and that 16+1 the initiative complements the EU-China Comprehensive Strategic Partnership as well as the EU-China 2020 Strategic Agenda for Cooperation.

Concerns from Brussels

Brussels has voiced concerns about the initiative as undermining the European integration process and unity. The number of EU member states joining the initiative reached twelve with the addition of Greece. The participation of Greece is indeed significantly different than other members of the initiative as Greece is neither post-communist nor Central and Eastern European. It is possible that the participation of Greece will dilute some of the regional dimensions of China and Central and East European cooperation. It indicates that Chinese interest is shifting to the Mediterranean region and that the regional format may be extended further. It could be considered as framing a new regional context within the European continent.

In March 2019, the European Commission and HR/VP contribution to the European Council jointly issued EU-China – A Strategic Outlook. It is stated that “neither the EU nor any of its Member States can effectively achieve their aims with China without full unity” and that “all Member States, individually and within sub-regional cooperation frameworks, such as the 16+1 format, have a responsibility to ensure consistency with EU law, rules, and policies” (p. 5). Although the EU is committed to engaging with China in various fields, it affirmed that China is “a systemic rival promoting alternative models of governance” (p. 1) and reminded its member states to be fully in line with the EU consensus.

The EU is also concerned about China’s industrial practices in this region in the long-term. The 8th Summit was accompanied by a business forum of representatives from the member states. During the 9th China-CEEC Business Forum, Premier Li Keqiang reaffirmed Chinese commitment to progressing projects such as the Budapest-Belgrade railway, the South -North expressway in Montenegro, the China-Europe Land Sea Express Line, as well as the E763 highway in Serbia. Premier Li said that “China’s trade with the CEE countries increased by 21 percent, hitting a record high of 82.2 billion US dollars in 2018”. Although Chinese investment in Central and Eastern Europe is still low compared to the core EU countries, Beijing will continue to progress more investment and projects financed by Chinese loans.

In March 2019, Italy became the first G7 state to join China’s Belt and Road Initiative (BRI) by signing a non-binding memorandum of understanding (MoU). The Italian government hopes that participation in the BRI would open up greater access to the Chinese market and bring new opportunities in investment and infrastructure projects. However, in the long term, one should consider that Chinese investment in critical sectors such as energy, technology, and ports could mostly benefit Chinese companies. Beijing has been accused of accumulating economic leverage through lending, while developing countries have become heavily indebted. The West concerns that China’s growing investments will increase its political power within the bloc. China may be hoping to apply this debt leverage as a tool to achieve its longstanding strategic goals as it did in Africa and Southeast Asia.

About the author

Da Yeun Lee has recently completed her internship as a research assistant at the Institute of International Relations Prague. She holds an MA in East European Studies from the Free University of Berlin.

More information

KREUZER, Peter - Dealing with China in the South China Sea -http://bit.ly/2oUm0CW

DUTTON, Peter A. ed. - Cooperation from strength - http://bit.ly/2PVVcNY

TURCSÁNYI, Richard Q. - Chinese assertiveness in the South China Sea: power sources, domestic politics, and reactive foreign policy - https://1url.cz/tMnkL

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