The Chinese Communist Party has long tried to exert influence over Central and Eastern European countries through investment, hoping the region would become a fulcrum for Beijing to pivot to Europe. But analysis points to a lack of results in the investment arena, and the CCP’s increasingly assertive stance in the international community has further scandalized its image.
The Voice of America reported that Lithuania officially announced on Saturday (May 22) that it was withdrawing from the “17+1” cooperation mechanism formed by the Communist Party of China and 17 Central and Eastern European countries, saying the mechanism had brought no tangible gains and urging other members to leave as well, adding that the EU should unite to meet the Chinese Communist challenge.
Lithuania’s move is the latest sign of deteriorating relations between the Communist Party and the CEE countries. But in the view of Andreea Brînză, vice president of Romania’s Asia-Pacific Institute, relations between the CCP and most CEE countries had already deteriorated before that.
There is a sense of disillusionment in the region because China’s (CCP) economic promises have not been kept,” she told the Voice of America. At the same time, EU-China (CCP) and U.S.-China (CCP) tensions have affected China’s (CCP) relations with CEE countries, as some of them have decided to choose sides in this emerging conflict.”
China’s unfulfilled economic promises to Central and Eastern Europe
The CCP launched its cooperation mechanism with CEE countries in 2012, when it promised to finance the development of the Central and Eastern European region. After Greece joined in 2019, the initiative has absorbed a total of 12 EU member states and five Balkan countries, which are slightly less developed compared to Western European countries.
But the region is gradually realizing that Beijing has failed to deliver on its promises. Data show that of the $129 billion in Communist Party investments in Europe between 2000 and 2019, less than $10 billion went to Central and Eastern European countries. By contrast, Germany, Japan, South Korea and the United States are the most important investors in CEE.
Meanwhile, many officially announced projects have been severely delayed or canceled, including the 17+1 flagship project, the Hungarian-Serbian railroad, which barely got off the ground after eight years, and Romania, which announced last year that it had canceled a deal with a Chinese company to build a nuclear power plant. The report also recently revealed that some of the projects are not being implemented.
A recent report also reveals that some officials have tried to exaggerate the impact of Communist Party investments in CEE in order to cover up the lack of progress and quell national skepticism.
This report writes that CEE governments tend to exaggerate the CCP’s presence in their respective countries. Official figures often include investment plans previously proposed but never implemented by the Chinese, infrastructure projects financed by CCP loans, and the results of international mergers and acquisitions.
This is mainly for political reasons, as both the Chinese (CCP) side and politicians in Central and Eastern Europe are interested in presenting success stories from the region to their constituents,” Tamas Matura, author of the report and founder of the Center for Asian Studies in Central and Eastern Europe in Hungary, told Voice of America. Expectations of capital inflows from Beijing have been very high since the cooperation began, and the actual results have been disappointing, so there is a gap that politicians are trying to fill.”
Indeed, this exaggeration has long fueled suspicions that China (the CCP) has successfully bought off Central and Eastern European countries to trade and invest in exchange for political influence over Europe. But experts stress that the CCP’s influence in CEE has never been as strong as many believe, and has been waning over the past few years.
Emilian Kavalski, a professor of China-Asia-Europe relations at Jagiellonian University in Krakow, Poland, told Voice of America, “Both the EU and China [the CCP] seem to be plagued by a common misconception that the participating CEE countries are allied with Beijing. The reality is much more complicated; most CEE countries are not allied with China (CCP), but rather find themselves awkwardly co-located with Beijing and trying to make the most of the opportunity. Initially, many of the participating countries were keen on Chinese (CCP) investments, but when those investments failed to materialize, the annual summits became empty talk clubs.”
The latest “17+1” summit was held online in February, after being postponed due to the outbreak of the New Coronavirus. As a testament to Beijing’s strong commitment to the region, Communist Party President Xi Jinping himself, rather than Premier Li Keqiang, who usually makes an appearance, attended the online meeting.
On the other hand, despite China’s diplomatic efforts, Slovenia, Bulgaria, Romania, Latvia, Lithuania and Estonia sent only ministerial-level officials to the conference.
Central and Eastern Europe emerging as a counterweight to the Chinese Communist Party
The analysis also suggests that as the Chinese Communist Party becomes more aggressive in the international arena, CEE countries will move closer to the EU as a counterweight to the Chinese Communist Party.
Relations between China and Europe have fallen off a cliff in the past few months. In March, after the EU teamed up with Western countries to sanction a number of Chinese Communist Party officials over human rights issues in Xinjiang, the CCP then sanctioned a number of MEPs, European think tanks and academics. They had been active in speaking out on human rights issues in the CCP.
This even angered those in Europe who were neutral or moderate toward the CCP, and negative sentiment toward the CCP grew across the continent, culminating in the European Parliament’s high-vote resolution last week to freeze the China-EU Comprehensive Investment Agreement (CIA), which had been tentatively negotiated over seven years.
What is easily overlooked is that some Central and Eastern European countries are keen to defend human rights, with the Czech Republic, Slovakia, Lithuania, Latvia and Estonia among the few countries in the world that have parliamentary support for the Tibetan group.
Most recently, Lithuania is considering opening an economic representation office in Taiwan to expand the country’s ties with Taiwan. Lithuanian government officials and parliamentarians have also called for support for Taiwan’s participation in the World Health Organization.
Lithuania’s decision confirms the country’s values-based foreign policy …… Lithuania’s departure from the 17+1 is not a surprise or a significant change and can be seen as a natural progression of a broad domestic dialogue about national identity and the role it should play in the world,” said Varski. “
Even for those Central and Eastern European countries that are considered pro-China, the degree of closeness between the CCP and them is largely based on the good relations between their leaders. Budapest may reconsider its current pro-China stance if the opposition wins next May’s Hungarian elections, while the new government cabinet has already begun to revisit the issue of the huge debt from the CCP after the weakened Socialist Democratic Party led by the president of the Republic of Montenegro after last August’s general elections.
In addition, amidst criticism from the EU and the United States over the past few years, Central and Eastern European countries have become more wary of the political risks associated with their dealings with the CCP.
While the EU accuses the CCP of adopting a “divide and rule” strategy in Europe, the 17+1 mechanism does not operate as a collective, and CEE countries do not share a common position on the CCP or China-EU relations. On the contrary, the EU has a greater influence on China-CEE relations.
Against the backdrop of heightened EU security scrutiny of foreign investment, Romania, Lithuania, Croatia and the Czech Republic are applying varying degrees of scrutiny to Chinese investment; Poland, the Czech Republic, Romania and Estonia also plan to restrict Chinese telecom giant Huawei’s operations in their respective countries.
Matula said, “In the future, the EU’s position will carry even more weight in China-Central and Eastern Europe relations, as the region must choose between EU values and economic help and largely unfulfilled Chinese (Communist Party of China) promises.”
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