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BRI China: BRI in Central and Eastern Europe: China’s gateway to EU

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China has been exploiting the BRI, to focus on the Central and Eastern European Countries (CEEC) for land connectivity with the European Union (EU) and increase its influence in the region. Yet Slovenia after Lithuania has taken a stand on Taiwan that has irked Beijing. Slovenia will allow Taiwan to open a representative office in its capital under the name Taiwan.

In his visit to Greece, Serbia, Albania and Italy in November 2021, Chinese Foreign Ministry Spokesperson Wang Wenbin highlighted that these countries are important ‘corporate’ partners of Beijing in Europe. Notably, Greece, Serbia and Albania are part of ‘17+1’ (now 16+1 after Lithuania’s exit) mechanism comprising China and 16 CEECs.

Earlier, Chinese State Councillor and Foreign Minister (FM) Wang Yi, in his meeting (Oct 27) with the Prime Minister of Greece, had cited that stable Sino-Greece relationship was a key factor of Greece’s development. China continues to push Athens to advance BRI — developing the Piraeus Port into a “world-class port” and constructing the ‘China-Europe Land-Sea Express Line’.

But the BRI figures for CEECs are plagued by confusion. There exists a gap of about $ one trillion between the rhetoric and reality in context of the Chinese investments in the 16+1 countries. According to the MERICS BRI database, Beijing has since 2013 co-financed $ 715 million worth of infrastructure projects which have been completed in the ‘16+1’ countries and has earmarked $ 3 billion in the under-construction projects and between $ 7 to 10 billion for the planned projects.

Loans advanced by Beijing to the CEECs have also created potential for their financial instability. Smaller countries, like Albania, lacking institutional capacity to assess agreements are vulnerable to Chinese financing, according to experts who follow the BRI model closely.

According to a 2018 report of the Centre for Global Development, several BRI countries are vulnerable to debt crisis induced by the Chinese investment. CFR’s Belt and Road Tracker’ has also indicated that, since 2013, Chinese debt has soared, surpassing 20 per cent of the GDP in some countries.

Countries find it difficult to repay their loans given the non-viability of the BRI projects. The bidding processes for these projects are opaque and costs get inflated.

Expectations from the BRI in the CEECs, regarding the economic cooperation have not been fulfilled. In recent years, Chinese activities in the context of the BRI have raised concerns in the EU as this will undermine the EU’s economic position.

The recent developments indicate increasing divergences in EU-Chinese relations. Amid China’s increasing military pressure on Taiwan, the European Parliament (EP) passed a resolution to “intensify EU-Taiwan relations”. The EP passed another resolution condemning China’s treatment of Uyghurs and its action in Hong Kong, followed by EU sanctions against Chinese individuals. This invoked Chinese counter-sanctions against EU institutions and MEP culminating into suspension of the EU-China Comprehensive Agreement on Investment.

China has been bolstering its bilateral relations with EU members, creating a divide in the EU using its economic prowess. Beijing’s efforts saw a favourable public opinion in several CEECs. According to a PEW survey last June, opinion in Greece favoured China, while opinion in other EU countries including, Sweden, the Netherlands, Germany and France, Italy and Spain was unfavorable.

Lithuania exited from the erstwhile ‘17+1’ group, urging other EU members to follow. The Lithuanian FM called upon the other EU countries in ‘16+1’ to abandon the initiative adding that “from our perspective, it is high time for the EU to move from a dividing ‘16+1’ format to a more uniting and therefore much efficient ‘27+1’ and the EU is strongest when all 27 members States act together along with the EU institutions”.

Beijing continues to increase influence on weaker EU countries, eroding their state institutions through its political, economic and soft power. China would focus on CEECs as an entry point to the Union and push its BRI. In view of its influence on ‘16+1’, China would influence policies and trade regulations from the governments of the region in its favour, exacerbating the EU’s ability to reach consensus, undermining its political and economic stability.

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