Chinese Balkan Policy – Is it Purely Economics?

Trying to decipher China’s core views towards the outside world is still quite a guessing game. It may well be a game of educated guesses based on careful analyses of previous moves, facts, and other elements, but unlike many other nations, there are no leaks, insiders, or barely any work of investigative journalism coming from China that enables reliable read of China’s inner thoughts about the outside world.

What is the Chinese Balkan Policy?

Attempts to understand Chinese political/economic moves in the Balkans is full of analytical hurdles. There are those that think that more active Chinese role in the Balkans came with the NATO bombing of former Yugoslavia, when in May 1999 the Chinese Embassy in Belgrade was hit, producing multiple victims and serious damage. In many ways, the facts can support this claim. Since 2000 the Chinese trade grew on average 30 percent annually, both with the Balkans, and with the neighboring countries in Central and Eastern Europe. Yearly cooperation summits between China and the countries of the Balkans and other Eastern European regions, like the one held this year in Riga Latvia, produce multi-million dollar Chinese investments, with Serbia in particular leading the pack. As Kovacevic points out, this is much more than the EU can offer these countries in recent years, and with its many internal problems, EU cannot grow trade with China any further.

Of course, there are some more far-fetched theories, like the one that China is helping Russia and Turkey keep influence on their civilizational/religious spheres in the Balkans, where China as a ‘middleman’ that can help, as a “grease in everybody’s palms in order to reach as peaceful accommodation as possible”.

In light of the first moves of U.S. President Donald Trump towards China and Russia, this scenario does not seem very likely.

By all accounts though, no matter how little ‘insider info’ is available, hard economic facts can give a certain outline of the Chinese policy towards the Balkans and further towards Europe: and that is that the Balkans are to be the Chinese economic/ transportation gateway to Europe.

The Balkans as the Chinse Entry Point to Europe

As far as the Chinese are concerned, the Balkans are an insignificant market for their products, and the Chinese interest in securing a reliable source for commodities is secondary, even beyond the fact that the Balkans are rich in natural resources. The focus is definitely on infrastructure and access to Western European markets.

The key partner chosen seems to be Serbia, both due to its geographical position, but also due to its current attempts to balance between the West and becoming a part of the EU and keeping good political and economic ties with Russia.

That is particularly seen through the Chinese participation in building the railway between Belgrade and Budapest, which is supposed to be finished in 2017. As reported, the project is worth 2.5 billion euro ($3.1 billion) and it will be financed by the China Development Bank and executed by Chinese state-owned enterprises.

As far as the Chinese are concerned this railway will have a starting in the Greek port of Pireaus which is practically a suburb of Athens, and will give China a competitive edge, since the shipping costs would be dramatically reduced, which in turn would give China the possibility to circumvent trade restrictions and export products directly to a market of 800 million people.

These assessments also speculate that there is also an EU interest in this Chinese involvement. The route of this Balkan-Central European railway is important for the development of the so-called Pan-European Corridor 10, which itself is to play part for drawing the Balkan region closer to the EU.

But the Chinese economic involvement in the Balkans is to grow further. In a East European/Balkan summit held in Belgrade in 2014, China committed to establish a $ 3 billion fund for Chinese investments in Central and Eastern Europe. This economic expansion is definitely not going to stay without attempts at forming possible political alliances. Again, it seems Serbia is one of the primary players that China is aiming for. After all, it is currently getting the lion’s share of Chinese investments in the region.

For its part, Serbia is reciprocating in the political field as much as it is able to at the moment. At the recent November summit in Riga, the two foreign ministers signed an agreement on mutual abolition of visas between the two countries. When the Serbian Parliament ratified this agreement mid-December 2016, Serbia became the first, not only Balkan, but also European country to abolish visas with China.

While further moves might not be that easy to predict, the freedom of movement for the Chinese within the Balkans, right on the EU borders, gives them a new set of economic possibilities, while for Serbia and other countries a more solid approach to enabling more Chinese investments in the region.

By Ljubinko Zivkovic
Source: The Geo Strategists

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