China has benefited from the differences that prevented the EU from forming a united front. Antonia Colibasanu writes that this is why relations with EU member states Hungary and Poland, and especially with the Western Balkans and Serbia are getting stronger.
Antonia Colibasanu Geopolitical futures‘Chief Operating Officer. Geopolitical Futures (GPF) was founded in 2015 by George Friedman, an international strategist and author of The Next 100 Years.A longer version of this article can be found here.
Earlier this month, a diplomatic dispute broke out between China and Lithuania. In fact, the dispute began in May when Lithuania decided to withdraw from the 17+1 initiative, a project established by Beijing in 2012 to strengthen ties with Central and Eastern European countries.
Then, in July, the Vilnius government stated that it would allow Taiwan to set up a representative office in Lithuania in its own name instead of in the name of “Chinese Taipei.” Beijing criticized this decision as violating its “one China” policy. In response, Beijing recalled its ambassador to Lithuania on August 10 and asked Vilnius to recall its ambassador to China. A week later, it also suspended freight train services to Lithuania.
This seems to be a small quarrel between Beijing and a relatively small European country, but as a member of the European Union, Lithuania’s foreign policy measures have a broader impact on the European Union.
Its dispute with Beijing may make it more difficult for the EU to reach a consensus on how to manage relations with China. But for Beijing, this is a good thing. It benefits from disagreements that prevent the EU from forming a united front.
This is why although its relations with the Baltic states are becoming increasingly tense, its relations with other EU member states—that is, Hungary and Poland—and the Western Balkans are getting stronger. In these places, China sees an opportunity to expand the growing wedge and strengthen its foothold in Europe.
Under China’s flagship “One Belt, One Road” initiative, the 17+1 model is designed as a way for Beijing to establish economic ties with Central and Eastern Europe through investment and a promise of better access to the Chinese market. However, since the launch of the project, China’s participation in the region has not achieved a balance among all participants.
Beijing has always been eager to cooperate with European countries that want to keep their foreign policy options open. Chief among them is Hungary, which may be China’s closest ally in the region.
Earlier this month, Budapest and two Chinese companies-China Civil Engineering and China Railway 11th Bureau-signed a contract to complete the upgrade of the railway connecting Hungary and Serbia-this is Hungary’s latest financing for China.
Hungary is an important ally of China because it is willing to challenge Brussels in many ways. Hungary has a long history of maintaining a balance between major powers-the most famous are the West and Russia, but China is also growing. By avoiding standing on top of a power, Budapest found that it could get the most benefit.
Poland is another country that has developed closer relations with China. Like Hungary, Poland and Brussels have disputes about the rule of law and EU values.
In the past, Poland has been worried about getting too close to China because of its strategic relationship with the United States. However, since this year, Poland’s relations with Beijing have improved.
According to data from the Polish Institute of Economics, Poland is one of China’s major investment destinations in the EU in 2020, with a total estimated value of US$1 billion. Bilateral negotiations have also intensified.
Warsaw’s goodwill to Beijing is sending a message to Washington that it needs to continue to engage with its traditional allies in Eastern Europe.
After Lithuania withdrew from 16+1, other EU member states also expressed dissatisfaction with the initiative-Bulgaria, Estonia, Latvia, Romania and Slovenia chose to send ministers instead of heads of state to participate in the last 17+1 summit in February-but so far So far, no one has left the group.
China and the Western Balkans
Although most Eastern European countries are most interested in increasing exports to China, Beijing’s interest in this group has always been focused on building infrastructure.
China’s investment goals are transportation, energy, and telecommunications. It supports China’s ambitions to extend its tentacles to distant markets and, more importantly, gain significant influence in disputed regions.
Manufacturing investment is usually linked to supporting infrastructure investment. In EU countries, such investments need to comply with environmental and transparency rules, which is a complicated factor for China.
In contrast, the Western Balkans is open to China’s large-scale investment projects. Serbia has always been the most welcoming country for Chinese investment. In terms of value, more than half of all Chinese projects in the 16+1 Group are located in Serbia.
Most of these involve the construction of major transport infrastructure, including parts of the EU pan-European transport system (corridor X railway and highway sections, corridor XI highway, Mihajlo Pupin bridge and Belgrade metro network).
Chinese companies have also acquired some of Serbia’s largest industrial complexes, including the Smederevo steel plant and the Bol copper mining and smelting complex. China has invested in the modernization of the Kostolac B3 and Kolubara B power plants, the two largest lignite power plants in Serbia.
The lack of economic progress and socio-political instability in the Western Balkans makes it vulnerable to external forces promised to save. Until recently, people expected the European Union to become the savior of the world, providing funding for reconstruction after the war in the 1990s, and demanding reforms to support democratic rule.
Others want the United States to lend a hand, and others still believe that Russia can be a better ally on security issues.
The hope of joining the EU is fading, so these countries can only ask for help from Russia and China. Russia has its own problems, but China seems to be ready and willing to intervene. Although China is not a direct challenge to the European Union, the United States and Russia in the region, its influence is growing and will give full play to its advantages.
At the same time, Beijing portrays these domestic relations as an important step in realizing the ultimate Chinese dream in which China plays a central role on the world stage.
