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How China lost Eastern Europe

Ten years ago, China launched its new policy towards Central and Eastern European (CEE) countries. It is known today as the 14+1 initiative, though its previous incarnation as the 17+1 is suggestive of the grouping's recent travails.

Ten years ago, China launched its new policy towards Central and Eastern European (CEE) countries. It is known today as the 14+1 initiative, though its previous incarnation as the 17+1 is suggestive of the grouping’s recent travails.

On paper at least, cooperation continues and the next summit in 2023 was mentioned during the last conversation between Polish President Andrzej Duda and the Chinese leader, Xi Jinping, on July 29. But the Russian war in Ukraine is redefining global geopolitics, including Chinese involvement in the region.

As long as the Sino-CEE relationship was ruled by pragmatism, relations continued to develop during regular negotiations. Washington was sceptical and the EU was just an observer in the process, while some Western European diplomats expressed concern about a potential Chinese Trojan horse emerging in the region, but this has not materialised.

Yet today, pragmatism and the economy have been replaced by security and values – and the new reality is forcing a rethink of the old policy.

Fraying of ties

Except for Budapest, in all other Central European capitals the principle approach towards China today is limited trust, or even anger.

The turnaround moment was the 2021 spat between Vilnius and Beijing over the opening of a new Taiwan trade office in the Lithuanian capital. The open attack on a small EU member state as well as on the EU ‘s single market led to an increase of suspiciousness across the Old Continent.

After the incident, “relations with China begun to deteriorate fast,” says Justyna Szczudlik, a leading China expert with the Polish Institute of International Affairs (PISM).

Around the same time, the EU introduced sanctions against four Chinese officials in response to human rights violations against ethnic Uighurs in Xinjiang province, which some Europeans and Americans have labelled as genocide. China responded with its own sanctions against five Members of the European Parliament.

Then Lithuania departed the 17+1 scheme in 2021, to be followed by Latvia and Estonia on August 11 in a show of Baltic solidarity. The remaining countries have become much warier.

The breakdown has clearly been exacerbated by the Russian invasion of Ukraine with the role of China regarded as ambiguous at best. Effectively, many see Beijing as being politically and diplomatically supportive of Russia.

MEP Reinhard Butikofer, who chairs the China delegation in the European Parliament, told BIRN recently: “China, in their support for the Russian war of aggression, have shown their true colours. They tried to pretend at the beginning they are neutral. But they were not neutral in any meaningful way. Traditionally, China has always preached the gospel of national sovereignty and territorial integrity. When it came to the national sovereignty of Ukraine, all of a sudden that principle went down the drain.”

During the EU-China summit on April 1, “the Chinese did not want to talk about the Russian aggression,” says the China expert Szczudlik.

Ahead of the summit, the Chinese diplomats were apparently lobbying for the war not to be even mentioned. They failed. Ursula von der Leyen, president of the European Commission, admitted to having had an “honest conversation” with President Xi about the situation in Ukraine. Central European diplomats were pleased.

Following June’s NATO summit in Madrid, China became “a partner, competitor and systemic rival,” says Matej Simalcik, who follows China-CEE relations for the Bratislava-based think tank, the Central European Institute of Asian Studies (CEIAS).

Chinese diplomacy is fully aware of the worsening of ties with CEE states. In April and May, a special envoy was dispatched to eight countries of the region. Ambassador Huo Yuzhen’s mission was to test the regional waters. The Polish Foreign Ministry refused to meet her, even at the working level.

“Poland is disappointed with the Chinese approach to Russia,” says Szczudlik, noting Warsaw now perceives its ties to China through the lens of the Moscow-Beijing axis.

In Bucharest, the government “canceled all the remaining Chinese projects in Romania and narrowed the possibilities for future cooperation,” says Andreea Brinza, a leading expert on China, who testified on the matter in the European Parliament. Today, it is impossible for Chinese companies to participate in Romanian tenders.

CEIAS, the Bratislava-based think tank, monitors support for China in the region. By the end of 2020, the positive perception of China was already on the wane, linked to COVID-19. At the beginning of the pandemic, the EU was not visible, while China’s initial involvement was very evident in countries like Slovakia.

“Some people thought at the time that China is supporting us more than the EU,” recalls Matej Simalcik, a researcher at CEIAS, though this perception changed rapidly when people realised the Chinese assistance was mere “ordinary trade relations”.

In 2021, wariness towards Beijing was on the rise in Bratislava. “The civil intelligence agency made a lot of mention of China as an active actor on hybrid warfare, cyberattacks, spreading influence in innovative companies and universities,” notes Simalcik.

There are three governments in Central Europe that differ from the rest. Lithuania and Czechia are the most vocal critics of Beijing foreign policy. Hungary, on the other hand, “has the most pro-China government in the EU,” says Simalcik.

The dominant approach of CEE governments is to keep their heads down. In Romania, “the government doesn’t want to create frictions with China, so it tries not to undertake measures or say things that might infuriate China, like criticism of human rights abuses in Xinjiang or Hong Kong, or developing relations with Taiwan,” says China expert Andreea Brinza.

Belt and Road to nowhere

In the wake of security replacing the economy as the primary framework for relations between China and the region, Central Europeans are expressing disappointment with the economic cooperation. Since 2012 there have been many promises of investment; most of them were never kept.

With the notable exception of the Peljesac Bridge in Croatia, constructed by a Chinese company and opened in July to great fanfare, few projects have been implemented. The flagship Belt and Road project is the Budapest-Belgrade-Thessaloniki high-speed rail link, yet there is little sign of it even being started.

In Romania, all Chinese projects have been frozen. For example, in 2020, the Romanians halted discussions with the Chinese about the Cernavoda nuclear power plant after seven years of negotiations.

In Slovakia, there was brief mention of a direct freight train connection from China to Slovakia. “Even before the war it was problematic. Now it is completely irrelevant,” says Simalcik.

The only major investment in the country to date has been a new Volvo plant for electric cars currently being built in eastern Slovakia. Volvo was taken over by a Chinese investor in 2010.

In Poland, the most significant project is the freight rail from China. The trains continue to operate despite the 2021 problems on the Polish-Belarusian border and the Russian war in Ukraine.

Still, the biggest economic problem of Poland is the trade deficit. “The Chinese promise the reduction of their market access barriers and to increase imports, but those promises are not fully implemented,” says Szczudlik.

“Officially, we want Chinese investments, but we are careful. We will not accept investments exclusively controlled by the Chinese side or those that concern critical infrastructure,” she adds – an approach evident in relation to 5G and the role of Huawei in the region.

It is obvious that the trade conflict between China and the US is contributing to the failure of Chinese policies in CEE. Andreea Brinza is blunt about her country’s primary policy: Romania “wanted to prove that it is a staunch ally of the US” and this is why a Chinese company was changed for an American one in the Cernavoda power plant project.

What future for relations?

2021 was the last 16+1 summit and many wonder whether the initiative will run out of steam like so many in the region would prefer.

To judge from recent events, perhaps. Not only was ambassador Yuzhen snubbed in Warsaw, but three weeks ago there was a meeting at the Chinese Foreign Ministry to which 16 European ambassadors had been invited to participate in to discuss 16+1 issues. Only 11 bothered to turn up.

Apparently during the 2021 virtual summit, the then-Slovak prime minister Igor Matovic wanted to boycott the meeting altogether. Ultimately, he was persuaded to participate, but the situation reflects the poisoned atmosphere. “China is not a priority; we have other priorities,” a senior Polish diplomat tells BIRN.

So far, the Poles, Romanians, Czechs or Slovaks show little sign of preparing to follow the Lithuanians, Estonians and Latvians out the door of the 14+1. Paradoxically, some argue this now diminished political format might still be bringing certain benefits to the region.

“The West Europeans were afraid of a Chinese Trojan horse inside the EU,” says Simalcik. On the contrary, he explains, “more and more CEE countries are becoming critical of China on their own, [and] this can be beneficial for one EU policy on China.”

Furthermore, “one never knows when this mechanism, today inactive, might be useful again,” says Justyna Szczudlik.