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25th Jun 2018

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China's 16+1 foray into Central and Eastern Europe

  • A Chinese New Year celebration in Prague. For Central Eastern European countries, the Chinese partnership is "a pragmatic question". (Photo: EUobserver)

Half a decade after it was launched, the network of cooperation between China and 16 Central and Eastern European countries has brought uneven economical and political fruits so far.

The so-called 16+1 was established in 2012 as Beijing's initiative to cover various issues such as investment, trade, but also culture or education.

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The group includes 11 EU countries: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia; and five non-EU countries from the Balkans: Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia.

It fits into China's global strategy to engage new partners in political and economic ties in different formats.

Despite having a permanent secretariat, the Cooperation between China and Central and Eastern European Countries - the initiative's official name - is more a series of bilateral relationships with no overall coherence, as experts pointed out in discussions at the Prague European Summit conference earlier this month.

"It's not really a multilateral format," Petr Kratochvil, the director of Prague's Institute of International Relations, told EUobserver.

"It's more a group of countries that China took to have bilateral ties with. It's mainly Poland and Hungary in terms of investment, and Romania and Serbia for building projects."

China's interest in the 16+1 countries is different from one country to another.

In the Czech Republic, Kratochvil noted, the Chinese have mainly invested in real estate, a football club - Slavia Prague, which just won the Czech championship - or the media.

"It's not really the kind of investment the country wants, because it doesn't produce anything," he said.

In Budapest, meanwhile, the government announced last week that Hungary and China would soon start to cooperate in the healthcare industry – from making medical equipment to developing biotechnologies.

Kratochvil noted that the amount of Chinese investments in the region had remained limited and was concentrated on a few high profile infrastructure projects, such as the Budapest-Belgrade high-speed railway that Chinese companies plan to build.

The focus on infrastructure shows that China considers Central and Eastern Europe (CEE) a full part of the One Belt-One Road initiative – an investment and infrastructure plan, spanning from China to the Middle-East and Africa through to Central Asia.

"Southern and Eastern Europe are a testing ground for the Belt and Road," Anastas Vangeli, from the Polish Academy of Sciences, told EUobserver.

He said that 16+1 was more an "experiment" than a "Chinese plan", and that Beijing tries "to see whether this type of diplomacy can help them boost economic relations."

"To put it very simply, the whole idea is to find ways to boost the economy outside China, to generate demand for Chinese goods," Vangeli said, adding: "And these are not cheap goods: high speed railways, satellites systems or nuclear technology."

Agatha Kratz, from the European Council on Foreign Relations, a London-based think-tank, told EUobserver that: "The first idea was to treat CEE as Asia and Africa."

"That was a big shock, they explained that loans for projects that China would build were not going to happen."

For Kratz, the success of the 16+1 initiative is to be found on the political side than in the economic side.

She pointed out that annual summits between the 17 leaders, usually in Europe, constitute a "formal channel of communication".

A pragmatic question

After five years, the 16+1 format "has shown its limits, but it will continue," Kratz added.

For China, the forum is "high-level enough and it helps to understand how best to promote what it can do in Europe".

For CEE countries, the summits are "one more bilateral forum, one more way to have meetings with China and explain what they [CEE countries] need from it."

For countries that are either part of the EU or willing to join it in the future, the Chinese partnership is "a pragmatic question", Kratochvil insisted.

Although some leaders, such as Hungarian prime minister Viktor Orban or Czech president Milos Zeman, are supportive of certain Chinese positions – for instance Beijing's territorial claims in the South China Sea – the region is not going to become a Chinese "ally".

"The idea of a strategic shift is nonsense," Kratochvil said.

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