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Opinion
May 10, 2019 www.intellinews.com I Page 24
If anything, Western European states are more dependent on China, with many Western European economies having opened to China much earlier than in CESEE. Even then, Western Europe and CEE have the lowest relative trade shares with China compared with OECD countries and other emerging markets.
Side-entrance rather than gateway?
The idea of CESEE – especially the Balkans – as a gateway region has become culturally engrained over centuries. It provides a compelling narrative to fit this stereotype into the context of China developing a new Silk Road. However, it is not yet clear whether the region will act as anything more than an optional side-entrance. There are two reasons for this.
First, there is little evidence that CESEE is grow- ing in economic relevance for China on a long- term basis. There is a clear commitment to im- proving maritime, road and railway infrastructure as part Beijing’s vision to diversify trade gateways away from the northern ports of Hamburg, Ant- werp and Rotterdam, which handle the majority of Europe’s trade, including that of the south. Piraeus is a key port which Chinese interests have acquired to advance this end. However, other southern European gateways are now preferred, with Italy emerging as a more important partner owing to its extensive maritime infrastructure and already functioning connections to core Western European destinations.
Second, the 16+1 initiative in CESEE has arguably under-delivered. Numerous flagship projects have turned out to be damp squibs. The Budapest- Belgrade high-speed railway, which was announced with much fanfare in 2013, has been scaled down
to the point that it will no longer even high-speed. Political instability in Romania has disrupted the Cernavoda and Rovinari thermal power plant projects. No single major project has yet been completed. Those that are in the pipeline, such as the port of Piraeus, Croatia’s Pupin Bridge and Montenegro’s Bar-Belgrade motorway, are at this stage one-offs that do not join up geographically.
This underwhelming picture is partly the product of a challenging region that is more volatile politically. Yet Beijing also squandered its chance, failing
to communicate to the EU in particular what its objectives were in CESEE. Furthermore, focusing its diplomacy on regional forums such as 16+1 generated more noise than action, with many mooted projects losing steam and falling by the wayside. At best, China has positioned itself with strategic opportunism in CESEE, without any
clear grand plan.
Certainly, China has established itself as a
niche player in CESEE. Its import penetration
of the region’s markets provides an important foundation for further investment. In selected Western Balkan countries (Serbia, Bosnia), its investment sums in the last years were similar
or close to those of the EU. But its muddled strategy raises the question whether CESEE
will be anything more than a side-entrance in China’s global supply chain, as Beijing outsources low-value work to focus on industries that will facilitate its transition to a high-value economy. Although CESEE is sprinkled with digital hubs, Western (and, to a lesser extent, Central) Europe is better positioned to take advantage of higher end opportunities from China.
Geopolitics trumps economics?
The paradigmatic rebalancing of Europe from the US towards China occurred within a geopolitical climate in which multilateralism was taken for granted. With the hardening of US attitudes towards China, this has clearly changed. Moreover, Europe is not a passive actor, but an increasingly autonomous bloc with sufficient unity to uphold its own strategic interests. Current events – such as Russia’s military interventions and Brexit – suggest that CESEE states will tend (if begrudgingly) towards unity and toe the EU line.
Policy in Germany, France and possibly Italy will therefore be important bellwethers of CESEE attitudes towards China – and the current mood in Berlin and Paris, in particular, suggests
that qualified Sino-scepticism is beginning to