China's belt and road strategy into the EU

4 minute read

Beginning eight years ago and in pursuit of its so-called Belt and Road initiative, China established or re-established relations with a group of Central, East European and Balkan countries known as the 16+ China Group; this later grew to 17+ China with Greece’s own desire to join the Group in 2019.

As regards Balkan countries, those targeted for close involvement and cooperation with China included Greece, Albania, Macedonia, Serbia and Montenegro. Greece would be considered the only ‘outsider’ as it was never part of a previous communist regime. Meanwhile, Albania was the only country that had maintained close relationships with China back in the 60s and 70s, at a time when both countries were deeply isolationist and dominated by extremist communist ideology. The rest of the Eastern European countries within the Group tended to be under the influence or control of the USSR until the 1990s.

China’s motivation in establishing these relationships was not altruistic but arose from its strategy of using some European nations as a kind of back door into the EU, taking advantage of the strategic location of these countries as an access point and of their relative poverty and openness to financial support with strings attached.

In the case of the Western Balkans, its strategic geographical location (notwithstanding substantial and mainly unexploited mineral wealth including copper, chromium, nickel, crude oil and hydroelectric capacity of certain member states) was the main motivation for China. Coastal locations were particularly important to the Belt and Road plan for a highway from Greece, up through their ‘old friend’ Albania and the rest of the Adriatic coast and deep into the EU.

China’s intervention in these countries began with and largely continues by the provision of loans as distinct from grants or direct investment by Chinese companies. These loans, mainly to fund much-needed infrastructure projects, such as highways and power plants, were readily accepted, particularly by North Macedonia and Montenegro. In the former case, 39% of external debt is due to China and, in the latter case, 20%.

These loans, which have been described as ‘debt trap diplomacy’, were often clouded by lack of transparency and, in many cases, allegations of possible corruption; they have had very little effect on the level of trade between China and the Balkan countries. The EU accounts for 73% of foreign trade, including tourism, versus only 6% for China, with which anticipated inbound tourism has not really taken off significantly, despite the attractions of the region, particularly the Adriatic and Ionian coastal and historical destinations.

Of late, China has enhanced its links with the Balkans in terms of cultural exchanges and media influence and there have been recent examples of direct investment (as opposed to loans) by Chinese state-owned companies. However, it remains true that its main motivation is the Belt and Road EU access strategy.

It would be easy and opportune to criticise the Belt and Road initiative and rank it alongside other claimed examples of malign Chinese influence in parts of Africa (Nigeria and Zimbabwe for instance) involving financial support in exchange for vital mineral resources and underhand payments; unfair terms of trade with the USA; aggressive Chinese actions in the Eastern Pacific and Hong Kong and against ethnic minorities as well as recently against Australia etc. 

But we have to argue that Chinese involvement in the Eastern European and Balkan countries is not all bad for the following reasons:

  • It is certainly the case that China has played a positive role in repairing decaying infrastructure and undertaking ambitious new projects with speed and efficiency.
  • Unlike the EU, China is not bound by bureaucracy and broader geopolitical considerations such as ‘nation building’. It operates instead according to a system of ‘pragmatic bilateral cooperation’ with ostensibly no broader objectives.
  • Neither does China harbour any military ambitions for the region (viz the USA and NATO), nor ‘spoiler power’ (Russia).
  • Perhaps most of all, and paradoxically, a degree of consternation amongst leading world powers about China’s influence, particularly in the Balkans, is likely to smooth and accelerate EU access to those Balkan countries seeking entry, at worst as the result of a kind of defensive/protectionist strategy.

In that regard, certain of the still non-EU countries within the 17+ China Group are anticipating EU entry in the near future with preparations already in place. 

Some, however, are also in a state of democratic imbalance with a high proportion of the young and ambitious population having left or planning to do so, and with a very large diaspora in many cases outnumbering the resident population. This is such that pressures to speed up EU accession as a result of China’s Belt and Road strategy would be somewhat welcomed by the EU.

To use a well-worn expression, these countries should hope to have their cake and eat it, by taking what China has to offer without being subjugated and by maintaining their close connections with the USA, the EU, NATO and others.