Officially, the Cooperation between China and the Central and Eastern European Countries (CEEC), referred to as the “16+1,” is an anodyne concept, designed to facilitate links between Asia and Europe and spur the economies of less-developed nations in Europe and its periphery. Some observers warn, however, that the CEEC seeks to split those countries from the European Union.
While Beijing would like to increase its leverage in the 16 countries, fears are outpacing the reality of Chinese power and influence. Nonetheless, the 16+1 forces Europeans to confront dilemmas that Japan and other countries have faced as China’s “One Belt, One Road” initiative moves forward. This is an opportunity for Japan and like-minded countries to consult and share assessments of Chinese behavior and cooperate to ensure that the good that China does for some countries does not come at too high a price.
In 2011, then Chinese Premier Wen Jiabao proposed that 10 EU members (Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) and six nonmembers (Albania, Bosnia-Herzegovina, Croatia, which has since joined the EU, Macedonia, Montenegro and Serbia) deepen cooperation with China. A year later, Wen oversaw the launch of the CEEC, which would focus on finance, infrastructure, investment, trade and people-to-people relations. The group set up a secretariat to implement its efforts and held regular high-level meetings to coordinate efforts, including a heads of state summit.
The sixth summit convened in Budapest late last month. In addition to the seventh China-CEEC Economic and Trade Forum, leaders discussed connectivity and cooperation in trade and investment, sustainable growth and innovation, and signed agreements between China and the 16 Central and Eastern European countries in those areas.
China sees these efforts as a natural part of the Belt and Road initiative, an attempt to link increasingly distant countries to the dynamic economies of Asia. Consistent with that logic, the CEEC was absorbed in the Belt and Road project when it was announced in 2013.
For those less-developed economies, China’s interest is much welcome. The CEEC has set up a dedicated state fund in 2016, and several projects have been launched. Many of those governments feel slighted by Europe and see Chinese interest not only as good in its own right but as a way to refocus European attention on them.
Fears that Beijing will overshadow Brussels (and other European capitals) are overblown. At the Budapest summit, China promised to invest €3 billion in infrastructure projects in the region — a promise that has been made in three previous years. Thus far, CEEC countries have received just 10 percent of China’s European investments, and an estimated 90 percent of regional investment comes from EU members and the United States. Many of the largest promised ventures have not materialized and the terms of Chinese largesse are heavy. Investments are only in strategic industries — which may be grounds for domestic sensitivity — and the Belt and Road initiative requires that projects be substantially executed by Chinese companies and that a local government guarantee the loan, both of which reduce benefits to the recipients. Fears of rising indebtedness have already prompted some Belt and Road project recipients to rethink engagement with that initiative.
There is no denying that China has a larger design behind this project. The 16+1 secretariat is located within China’s foreign ministry and all top officials are Chinese, clear signs of a diplomatic agenda. Many CEEC countries are former members of the Soviet bloc, have mixed feelings about Western values and are more comfortable with socialism and authoritarian governments. They may be troubled by the prospect of Russian expansionism, but Beijing offers no such concerns. And many of them have ties to China that date back to the Sino-Soviet split.
Reportedly, there are already instances in which governments with close ties to China have taken positions that favor Beijing in EU internal deliberations. Those include the watering down of an EU plan to screen external investments in strategic companies, an authority that would intensify scrutiny and increase transparency of deals in strategic sectors — and largely targets Chinese attempts to buy up increasingly critical technologies. In addition, in 2016, Hungary and Greece, both of which have received significant amounts of Chinese money, blocked a strong EU Council declaration on Chinese behavior in the South China Sea.
European governments are increasingly concerned about the inroads Beijing is making, as are Japan, other governments in Asia and the U.S. But the bottom line is that there are unfulfilled needs in these countries and China is trying to address them. While history suggests that China will overplay its hand as it courts those countries, Tokyo, Washington and other capitals would be better served by more aggressive attempts to meet those local needs themselves.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.