The ninth “17+1” summit between China and Central and Eastern European countries was held by video on September 9, affected by the Epidemic. To restart relations with the 17 CEE countries, Xi pledged at the video summit to import $170 billion in goods from the CEE countries over the next five years and to provide them with a vaccine against the Chinese Communist virus. But an analyst at a German think tank said the summit could not prevent CEE countries from being disillusioned with Beijing‘s economic promises.
The 17+1 summit was attended by heads of state and government and high-level representatives from 16 CEE countries, but the official Chinese media did not specify which heads of state were not present. The spokesman for Lithuania’s permanent representative to the EU confirmed that officials at the level of president and prime minister would not attend the summit, while Estonia and Latvia each sent their foreign ministers to the summit. Estonian Prime Minister Kaja Kallas, who just took office at the end of January, said through a spokesman before the summit that he would prefer to be more involved in the “EU 27+1” mechanism, which uses the EU-27’s common policies to deal with the Chinese Communist Party.
At the summit, Chinese Communist Party leader Xi Jinping pledged to import $170 billion in goods from Central and Eastern European countries over the next five years and to provide them with vaccines against the Chinese Communist virus. He also stressed the need to “join hands with these countries to build a Belt and Road with high quality.
But the response from Central and Eastern European countries has been less enthusiastic than before. An unnamed European diplomat told Bloomberg that while Beijing said trade with Eastern European countries was growing, some countries were experiencing growing trade deficits with China, making them less enthusiastic about the “17+1”.
The German newspaper “Handelsblatt” earlier quoted sources familiar with the matter as saying that the CEE countries have turned to a wait-and-see approach to the “17+1” mechanism, not only because they are disappointed that many Chinese promises to invest in infrastructure have not been fulfilled, but also because the summit is too political and lacks economic and trade content.
“Beijing is eager to portray the summit as a victory for China (Communist Party of China) and to imply to the Biden administration its close ties with the region,” according to analysts at Berlin-based think tank Mercator Center for China Studies (MERICS), but the summit “could not prevent the CEE countries from being disillusioned with the economic (benefits). At the same Time, these countries are increasingly aware of the security and geostrategic implications of cooperation with China.”
Beijing Fails to Deliver on Economic Promises CEE’s Growing Trade Deficit with China
The summit between China and CEE countries began in 2012 with 16 countries initially joining, including Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Romania, Bulgaria, Albania, North Macedonia, Estonia, Lithuania and Latvia, and was upgraded in 2019 thanks to the addition of Greece to “17+1”, of which 12 countries are EU member states.
The Chinese Communist Party promised that the cooperation mechanism would bring economic benefits to the participating countries, but this has not been the case. Poland, an important partner in the 17+1 project, initially participated actively, but later showed disappointment and dissatisfaction, and finally chose to stay away from China. According to the report, Poland’s trade deficit with China has been growing between 2013 and 2017 (with only a small decline in 2015). Poland’s imports of Chinese goods exceeded its exports by about 10 times, and the cumulative trade deficit from 2013 to 2017 exceeded $106 billion. In addition, other CEE countries participating in the “17+1” project are also experiencing increasing trade deficits.
In addition, Communist China’s infrastructure investments in the small Balkan country of Montenegro have caused the country’s debt to soar. Former EU Enlargement Commissioner Johannes Hahn told AFP that Montenegro’s public debt soared to more than 70 percent of gross domestic product after borrowing heavily from China to build highways in the mountains. “These investments by Beijing often come with strings attached,” he claimed. If Montenegro is unable to repay Beijing’s loans within a specified time frame, the Communist Party will reportedly be entitled to parts of its country’s territory. This is also known as “debt trap diplomacy.
Chinese Communist Party Using “17+1” Model to Divide EU
European think tank Egmont Royal Institute of International Relations, based in Brussels, Belgium, has reported that Beijing’s economic relations with these Central and Eastern European countries are extremely unequal, and that in addition to economic considerations, the platform is also a foreign policy tool and a way for the Chinese Communist Party to exert influence. Some of the countries participating in the “1+17” project are subject to the Chinese Communist Party on major international issues in order to maintain cooperation with China, which often prevents the EU from adopting important resolutions in a timely manner.
As a result, some European countries see the 17+1 as a wedge for the Chinese Communist Party to embed itself in the EU, and the EU believes that the Chinese Communist Party is using the 17+1 model to divide the EU.
Security interests of 17+1 allies exclude Chinese companies from key sectors
Security reports issued by Estonian and Latvian security agencies in early 2020 and late December 2019 made the first mention of the Chinese Communist threat. The report published by Lithuanian security agencies in February 2020 is the second mention of the CCP threat after 2019.
The Czech Republic, a 17+1 participant, excluded state-owned China General Nuclear Power (CGN) from the tender for a new nuclear power plant at the end of January this year due to national security concerns; Croatia called off the tender for the operation of the country’s only deep-water port when a Chinese company was expected to win the tender; and the new Romanian government announced in January this year The new Romanian government also announced in January this year that it would no longer consider Chinese companies’ participation in the country’s highway and railroad construction.
In addition, as of November last year, Romania, Bulgaria, Greece, the Czech Republic, Poland, Estonia and Latvia have signed security agreements with the United States on high-speed wireless networks as part of the Trump administration’s “clean network” plan, excluding huawei from the construction of 5G networks.
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