China Slipstitching Western Balkans in New Silk Project

@Kunal_Chonkar

With no requirement for structural reforms beforehand, the Chinese investments are becoming increasingly attractive to the government of the Western Balkans and further afield. Several projects are awarded without a bid, without the inclusion of anti-corruption measures, and are not always based strictly on cost estimates, which is an ideal model for greasing the palms of the Western Balkan elites

New Delhi: The political and economic links between Beijing and the Balkan nations have been firmly rooted since the time of the Cold War. China has direct and fluid relations with Yugoslavia under the influence of Tito and Albania under Enver Hoxha. Although remote, sparsely populated, and yet to prosper economically, the Western Balkan nations have found a cardinal role in China’s New Silk Road, an ambitious strategy announced by Chinese President Xi Jinping back in 2013. An expressway strategy with which China intends to create a single interconnected market for entire Eurasia.

The Western Balkans, a region situated at the crossroads between the Mediterranean Basin and Europe. Devoid of large-scale infrastructure, and strategic investments – these regions are currently under the lead by questionable political elites. They are ideal puppets for Beijing in its quest to expand and enrich its footprint across Europe. Taking into account the socio-political scenario in the arid lands, China has decided to develop a strategy in this region at the economic, cultural, and political levels, with emphasis on ‘soft power’ to establish a variety of bilateral relations with national governments and local leaders.

Currently, China communicates with Central and Eastern Europe within the ’17+1 mechanism’ which brings together all the countries of post-communist Europe, some of which are members of the European Union (EU). It is a platform for cooperation that includes Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia. The group was soon joined by Greece, thus the configuration of ’17+1.’ Following the notable success of the group’s meeting in Dubrovnik in April 2019, more progress is now expected in China’s cooperation with 17 European partners. The 2016 visit of President Xi to Prague, Belgrade, and Warsaw sent a strong message that China wants to play a significant role in this European belt. The ’17+1′ initiative aims to expand these countries’ cooperation with Beijing in trade and investment, develop multi-modal transportation links, finance, agriculture (satellite-supported), science and technology, health, education, and culture. China considers this initiative an integral part of its major global project recognized as the ‘New Silk Road.’

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From the eyes of Berlin and Brussels, this new trend coincides with a political turnabout in some Eastern European nations, specifically EU member countries – Poland and Hungary. China’s interests are currently of an economic nature, in an attempt to create an infrastructure network that will serve to expand its markets in Europe, especially in the developed Western region. However, China’s presence in the Western Balkans is an opportunity to consolidate diplomatic relations and strategic interests as well. Uncertainty remains over Brussels’ promises to the Western Balkans, which has enabled China to weaponize its strategy to offer countries in the region, especially those that have already lost hope of full EU membership, a more favorable alternative. According to some noted West European analysts – Beijing’s main interest in becoming engaged with that part of Europe is ‘to undermine EU unity.’

Given that the wars of the 1990s, when Yugoslavia fell apart in bloodshed, stripped the newly emerged countries of their international reputation and political and economic power, China recognized this fact very early and reacted promptly. At the same time, Beijing’s engagement with this part of Europe coincided with the growing dissatisfaction and frustrations among the region’s population over the results of the post-socialist transition. Beijing’s leadership immediately focused on the development and implementation of specific projects in the transportation and energy infrastructure network, and in boosting trade-investment links. These tactics are slowly and patiently scoring points with tangible results as China builds roads, power plants, or steel mills, some of which are under construction or have already been completed. Most of the finance, well over $10 billion, has gone to Serbia. At the same time, China openly advocates and encourages talks about new projects in various political and academic forums. One such example is the agreement signed between the Serbian and Chinese Academies of Science. President Xi does not want the world, including the Western Balkans, to see the New Silk Road as a means of imposing policies. He wants to portray the New Silk Road as a ‘peaceful projection of Chinese power.’

In August 2018, Chinese Foreign Minister Wang Yi in his official statement indicated that ‘the New Silk Road originates in China but belongs to the world.’ Beijing sees the former Yugoslav countries as part of a wider region defined by ‘structural similarities.’ In defining China’s strategy toward this area, it should be emphasized that it is based on the common recognizable feature of the countries of Central and Eastern Europe, which were under the socialist regime during the Cold War. However, China’s growing presence in the Western Balkans is not only a result of its global strategy and positioning in the world, but also of the EU’s poor, confusing, and one-way policy toward that part of Europe. While the EU is yet to figure on the plans to integrate the Western Balkans nations, for China the ’17+1′ group is already showing all the characteristics of a ‘traditional friendship’ and a ‘common past’. The accession of Montenegro, North Macedonia, and Albania to NATO has a negative impact on boosting their cooperation with China. However, at the same time, the Western Balkan nations are rather very reticent with regard to bolstering the alliance against China. This is seen, for instance, in their willingness to have a partnership with the Chinese firm Huawei.

As for initiatives for political cooperation in the Western Balkans, they are primarily backed by Serbia. Serbia’s best-known project in cooperation with China is the high-speed railway line between Belgrade and Budapest. However, it is part of the deal for the same route that Hungary signed with China but which should remain confidential until 2030 given that Hungarian Prime Minister Viktor Orban has classified it a state secret. Beijing and Belgrade signed a strategic partnership in 2009, which five years later resulted in 13 agreements in the fields of infrastructure projects, transportation links, finance, telecommunications, and agriculture. Serbia pocketed a 195-million-euro loan from the Exim Bank for the Pupin Bridge. In addition, 538 million euros were also borrowed for the construction of the B3 Kostolac coal-fired power plant. Belgrade has a great opportunity to become China’s hub in the region.

When it comes to Croatian-Chinese economic relations, Beijing observes the Peljesac Bridge project as a positive example where the interests of China and the EU overlap for the benefit of all. The contract worth 282 million euros was signed in April 2018. The bridge will connect the southern Adriatic peninsula of Peljesac with mainland Croatia. About 85 percent of the construction costs are being funded by the EU. China has also announced investments in the Port of Rijeka and the Zagreb-Rijeka railway line. The Chinese are counting on investments in Zadar and the Port of Ploce. Meanwhile, Croatia hopes to attract more Chinese tourists to its Adriatic resorts. There was also talk of investing in Croatia’s shipbuilding industry. Since 2019, Montenegro has owed China 671 million euros or 22 percent of the country’s total external debt. Montenegro has become a textbook example of a debt trap.

With no requirement for structural reforms beforehand, the Chinese investments are becoming increasingly attractive to the government of the Western Balkans and further afield. Several projects are awarded without a bid, without the inclusion of anti-corruption measures, and are not always based strictly on cost estimates, which is an ideal model for greasing the palms of the Western Balkan elites. China’s approach to this area of Europe is growing concerns to the EU. It fears that Beijing could provide and prove to be an alternative to its presence and performance in the region. If the EU intends to snip the slip-stitching of the Balkan region by China, then it should proactively and primarily strengthen its own position in the region – as an economic developer and a decision-maker.