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of analysis. Levels of political, economic and BRI dimensions of looking on the 16+1 process, can be utilized as lenses for further discussions.
4.1.1 Political dimension – explanation of multiple levels of China-CEEC’s engagement
To whether the discussed cooperation format moves beyond “nominal” multilateralism is largely depended on involvement of each participating state, together with their level of political willingness in the regional context. There are several approaches to look on the issue of “lateralness” of this partnership framework.
Map 7. Multiple levels of lateral China-CEEC’s engagement
Source: Created by this author from a creative common license map.
Greece
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These, among others, can be based on the geography, political obligations and competences, development, and cultural and historical backgrounds. Although there are strong voices from the EU that China doesn’t allow any subgroupings within the 16+1 that would undermine its leadership (Godement 2017), the platform (China) began to recognize the geographical differences in potential, just after the Riga Summit in 2016135.
Based on above general “subgroupings”, and discussed arguments in literature review, this author developed the following approaches, that can help to discussed the format and tackle differences in individual perceptions. This approaches as a derivative of the already present subgroupings of identifications visible in the Central and Eastern Europe (based on history, economy, geography and others). Due to “specific national conditions” impact their industrial capacity and overall development they differ in the potential and preferred sub-regional (China-CEEC) and cross-sub-regional (China-EU) cooperation, and influence the identity
“state” in the research relationship (*excluding Greece):
• 16+1 – the mechanism is a platform of engagement of 16 CEEC’s and China;
nominal multilateralism;
• 16x (1+1) – the mechanism is a platform of sixteen bilateral relations of each CEEC and China;
• (11+1) +(5+1) – the mechanism is a platform of engagement of 11 EU countries and 5 non-EU (yet candidate) countries;
• (3+1) +(4+1) +(9+1) – the mechanism is a platform of engagement of three Baltic states, four Visegrad states, and nine Balkan states.
• (11/28+1) +(5+1) – the mechanism is a platform of engagement of 11 out of 28 EU countries and 5 EU candidate countries (non-EU) with China.
In spite of the above differences in the political dimensions of 16+1 cooperation, political relationship is where format achieved the most. Today many of the 16 CEEC’s have
“lifted” their diplomatic relations to the strategic partnership status, and the political relations and mutual political understandings are on their best levels136. The political dimension is also
135 Exchanges of this author in Shanghai, 2016.
136 This argument is often presented at the beginning of the bilateral exchanges of leaders of the PRC and CEEC’s.
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one of the key drivers for the mechanism creation, embodied in the losses in mutual political and economic understanding that decreased during the 1990’s and 2000’s.
Table 5. List of specialized cooperation platforms of 16+1 process
Leading Country/ Location Name of action/platform Albania China-CEEC Youth Development Center (TBC) Bosnia and Hercegovina China-CEEC Veterinary Science Cooperation
Center (TBC)
Bulgaria
China-CEEC Global Partnership Center (NGO think-tank) China-CEEC Association on Promoting Agricultural Cooperation China-CEEC e-Commerce Logistics Hub and Pavilion for Agricultural and Other Products
Czechia China Investment Forum China-CEEC Civil Aviation Forum
Croatia China–CEEC SME Coordination Mechanism Estonia
Hungary
China-CEEC Inter-Bank Association
Customs clearance facilitation cooperation mechanism for the China-Europe Land-Sea Express Line (with Chinese, Hungarian, Serbian, Macedonian and Greek Customs)
China-CEEC Association of Tourism Promotion Agencies and Businesses Latvia CEEC-China Secretariat on Logistics Cooperation
Lithuania China-CEEC Fintech Coordination Center
Montenegro China-CEEC Environmental Protection Cooperation Mechanism North Macedonia China-CEEC Coordination Center for Cultural Cooperation
Poland China-CEEC Coordinating Secretariat for Maritime Issues Contact Mechanism for Investment Promotion Agencies China-CEEC Business Council (SME)
Romania China-CEEC Energy Projects Dialogue and Cooperation Center Serbia China-CEEC Association on Transport and Infrastructure Cooperation Slovakia China-CEEC Virtual Technology Transfer Center
Slovenia China-CEEC Coordination Mechanism for Forestry Cooperation
China
China-CEEC Think Tanks Network China-CEEC Library Union
China-CEEC Higher Education Institutes Consortium China-CEEC Music Academy Union
China-CEEC Arts Creation and Research Center
China-CEEC Association on the Promotion of Health Cooperation China-CEEC Hospital Cooperation Alliance and China-CEEC Public Health Cooperation Mechanism
Source: Compiled by this author based on the Guidelines documents and summary (listed in Annex 2).
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Core of the pragmatic political cooperation within the mechanism are the annual Summits of Heads of Governments. The highest working level meetings are the National Coordinator137 Meetings, which according the first ever Midterm Agenda for Cooperation (for years 2015-2019) issued in 2015 in Suzhou should be conducted twice a year. As indicated by the above document, there are also quarterly working meetings between the 16+1 Secretariat in Chinese MFA and the Embassies of individual CEEC’s in Beijing, where progress on implementation of the guidelines is discussed. There are also many areas of individual “presidency” based on topics and particular interests, which aim at enhancing the multilateral aspects of cooperation in the given real of cooperation under leading role of the hosting country.
The above list (Table 5.) shows the distribution of interests of particular Participants, which in a way can be regarded as a “survey” of political interests within the format from its multilateral perspective. It is also reflecting the “tricolor” characteristic of the division of the region of the CEEC’s, which had been drafted in the parts above (vide Map 7). Since it is widely accepted argument that these platforms are highly Chine-led process, it is also arguable that areas where China is willing to share the coordination with other countries, and which are the areas fully under the control of the Chinese counterparts. Even by brief analysis of the above list it can be noted, that majority of centers located in China are directed for people-to-people exchanges and cultural bonds. There is of course disruptive relevance of this actions to which category of lateral relationship of CEEC’s and China they refer. By analysis of the achievement list of the platform listed in Appendix 2, it can be also noticed that there is quite high degree of intra-regional center of cooperation between China, Serbia and Hungary, with particular references to the Sea-land Express line described at the end of chapter two, with already evident presence of Greece (since 2015, in position 34).
137 National Coordinators: on Chinese side is the Deputy Foreign Minister responsible for European Affairs, and on the side of CEECs the Ministers, Deputy Ministers or Director Generals of Departments in ministries responsible for international affairs with Eastern Asia.
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The Economic dimension is one of the key elements of the analysis of the China-CEEC cooperation mechanism, mainly associated with the demand and supply sides of the cooperation needs in the region, pointing to the aftermath of the 2008 economic crisis. It is also the main dimension referred to by the Western Europe scholars as the “silver bullet” to the goal of transparent and sustainable economic development.
Encouragement for closer relationship of some CEEC’s with China, as presented by the Chinese leadership may be linked with demand for new sources of development, which after the 2008 economic crisis in Europe was also a position among other counties like the so-called PIGS138grouping. The stated crisis was also a strong contributor to the growing interest of China in CEE and vice-versa, becoming an element potentially bridging China with the EU139. The above notion points to what lays perhaps among the main misconceptions of 16+1 today, that is its aim, deliverables, and role, both nationally (to each of its participants), regionally and from the unilateral perspective of China.
The cooperation mechanism is centered in the crossroads of what Samuel Huntington called a border of Western and Orthodox Christianity140 (concept rejected by Xi Jinping during the Civilization Forum in Beijing in 2019, where referred to this concept being a “huge mistake”141), a border of European Union with its eastern neighbors, area of frictions of the two sides of the Cold War, and a region, that through many centuries experienced shifts and instability related to its geographical (in)significance and comparatively low level of industrialization and development. This unique legacy, as pointed in the literature review, brings the attention of many stakeholders from and outside of it, that in a natural way introduces multiple concepts of what is the 16+1, and where does or will it lead too.
An important determinant for stated cooperation refers to how Beijing classifies the CEEC’s in case of development needs, which link the regional significance as an element of the so-called developing “South” or the developed “North”. More differences (between EU, 16
138 Portugal, Italy, Spain, Greece.
139 Invitation to cooperate with China on addressing the demand for development in CEE region for fist offered to Germany during the visit of chancellor Merkel in Beijing.
140 Or Western and Orthodox Civilizations.
141 “Xi Jinping Attends the Opening Ceremony of the Conference on Dialogue of Asian Civilizations (CDAC) and Delivers a Keynote Speech”, PRC MFA, May 15, 2019.
https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1664312.shtml.
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CEEC’s and China) reflect to what extend to the 16+1 project China’s diplomacy priority pattern of “South-South” cooperation in the cross-regional relationship, that could also contribute to support claims of practical segregated regionalism. It has been already established, that China’s interest in CEE region is associated with the geographical location and logistic potential to access Western Europe, where “the implementation of BRI in the CEE resembles China’s policy in Africa and Latin America”142. The question which is debated frequently in this context is whether China considers CEEC’s and the gateway to Europe, or adapts more of the backdoor approach.
As indicated on various occasions by the Chinese leaders in the years 2016-2018, the main potential for cooperation as well as conduciveness of 16+1 to the UE development and integrations (on Chinese side) is the possibility to address the demand for structural aid and developmental gaps between new and old EU members, in which the Western European states should take an active role, “hand in hand” with China. That help and support, largely associated with financing opportunities provided by PRC has influenced how the EU and other Western observers view Beijing engagement in the region, as well as how positive or negative it is. The “no strings attached” financing provided by China and the characteristics of the investment model offered in the first eight years of 16+1 significantly limited the possibilities for successful projects within the 11 EU states, mostly due to lack of understanding (proclaimed by China in this timeframe, but with some opposing evidence) of the general procurement procedures within the EU, as well as the questions of sustainability of the projects (mostly in case of financing).
As stressed in one of the briefings to the EU Parliament on the 16+1, “empirical evidence shows that China-CEEC trade had actually jumped prior to 2012, whereas afterwards it increased at much slower pace, with Chinese exports to CEEC’s expanding much quicker than CEEC exports to china, thus generation an unbalanced trade that is heavily tilted in favor of China”143 . This assessment is reflecting the lessons learned from the shifts in the trade
142 B. Kowalski, “China’s foreign policy towards Central and Eastern Europe: The “16+1” format in the South–South cooperation perspective. Cases of the Czech Republic and Hungary”, Cambridge Journal of Eurasian Studies, April 2017.
https://www.veruscript.com/api/files/e6b66e59-1a85-11e7-b3ad-0242ac110002/download.
143 “China, the 16+1 format and the EU”, European Parliament, September, 2018.
http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/625173/EPRS_BRI(2018)625173_EN.pdf.
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development, which point that the increase in trade is the same or even smaller144 in years 2012-2017 than before the 16+1 and BRI were created.
By analysis of trade flows between individual CEEC’s and the EU28 with China during years 2010-2018 (2017 for non-EU countries; Eurostat, WITIS 2019) one can see that there is absolutely no correlation in trade before or after establishment of 16+1 platform or creation of concept of BRI. Furthermore, it can be argued, that in many cases years 2013-2017 are the time when instead of development of more balanced trade exchanges with China, the deficit of almost all CEEC’s, and EU28, increased. The most balanced trade as well as positive effects can be seen in Bulgaria (individual figures are listed in Appendix 3).
With the assessment of the flows presented in the below Table 6., it is possible to note the differences in the statistics of China and Europe, exclusion of re-exports from other EU members in which chain of supplies CEEC’s have a significant role, as well as e-commerce trade, which is largely undervalued (due to taxation) but in case of small CEEC economies can have significant impact in further extension of that deficit.
Figure 6. Dynamic and trend of trade deficit as % change year-on-year [2010-2017]
Source: Developed by this author based on EUROSTAT and WITS.
According to the press releases of Ministry of Commerce of PRC on the occasion of Dubrovnik Summit (2019), the bilateral trade between China and CEEC’s see steady growth, where bilateral trade reached 82.23 bn. USD in 2018 (21 percent year-on-year). China's exports to the CEEC (59.19 bn. USD) expanded by 19,6%, while imports expanded by 24,6% to
144 See previous footnote.
2011 2012 2013 2014 2015 2016 2017
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23 bn. USD. This release indeed shows the trade growth, but also underlines the 40% gap in trade balance on the side of CEEC’s which narrowed by modest 5%145. During the visit of Minister of Foreign Affairs of PRC in Warsaw in 2019, his Polish counterpart pointed out that
“both sides agree, that the biggest challenge in Sino-Polish relations remains the unbalanced trade”146. In case of Poland, the largest economy in the format, in 2018 according to Polish statistic office two-way trade totaled 33 bn USD, out of which only 2,5 bn were Polish exports (28bn USD deficit grown further 14% year-on year). This is another empirical evidence, that there is almost no progress in search towards the balanced trade relationship, which on the current level can be already called a political obstacle, and has been officially signaled both in Sofia and Dubrovnik Summits (already in early 2018).
Figure 7. Trade of 16 CEEC’s and China 2010-2017 – Import, Export, Balance (million EUR)
Source: Created by this author based on data from EUROSTAT and WITS.
There are also interesting links associated with analysis of the voting patterns within the EU Structures associated with the trade relationships. As proved by Matura (2019), there is also no evidence that would suggest there is any link between China receiving political favors from CEE EU MS and trade. Furthermore, there is a pattern suggesting that countries that present better political relations with China are experiencing considerably slower development of export. This means there is also no correlation between the political support of CEEC’s and the trade benefits as well.
145„China, CEEC see steady trade growth”, China Daily, April 6, 2019.
http://www.chinadaily.com.cn/a/201904/06/WS5ca85931a3104842260b4a69.html.
146 Polska Agencja Prasowa (PAP), in Polish: https://www.pap.pl/aktualnosci/news%2C480594%2Cczaputowicz-wyzwaniem-w-relacjach-polsko-chinskich-brak-zrownowazonej.
-40000 -20000 0 20000 40000 60000
2010 2011 2012 2013 2014 2015 2016 2017
Import Export Balance
DOI:10.6814/NCCU201900729
Table 6. Trade flows and dynamics of trade between China and CEEC’s (in millions of EUR)
Country/
Source: Compiled and calculated by this author based on data from Eurostat and WITS; data in USD adjusted to EUR by average annual exchange rates.
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Figure 8. Strength of Political Relations (2014) Compared to Change of Export Dependency vis-à-vis China (2009/2014)
Source: Copied by this author from Matura (2014).
4.1.3 Belt and Road dimension – the overarching perspective
As described in literature review and discussed in following Chapter 5., there are some empirical evidence to the commonalities referring to investments and role of involvement of large Chinese state-owned enterprises. That SOE’s activity is mostly related to buildup of industrial capacity and connectivity, and have significant impact on EU-China relationship.
Although the 16+1 summit in Budapest in November 2017 signaled passing milestone, in which all of the 16 CEEC’s have signed cooperation agreements on cooperation in BRI with China (all of which are not legally binding), there is yet no agreement to weather 16+1 should be attributed as the element of BRI. Also, lack of agreement on what the BRI is, and what is its main propose, especially in the Western Europe (so far only Portugal, Italy and Luxemburg signed an MoU’s on BRI with China in 2018 and 2019) requires to mind the presented conceptual nature of both BRI and 16+1 to find the common elements. There are many shared measures of analysis, including shared objectives, common geographical area, and presentation of same often bilateral only achievements as the outcomes of both the initiative and the platform.
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Much of security and economic dimensions are associated with the creation of the idea to connect Europe and Asia with land economy belt and maritime silk road which in years 2013-2016 evolved to the Belt and Road Initiative. This points to shared objective of support of development in the region, which as said earlier is considered (by CPC) as conductive to the EU overall development and integration processes. The long-term debt and adherence to EU tender procedures, including the EU candidate 5 Balkan countries also isn’t without the cross-regional impact. Therefore, it could be argued that 16+1 cooperation acts not only as a mean of cooperation of the 17 stakeholders participating in the format, but also as the proxy toward an overarching trans-continental cooperation between Asia and Europe.
4.2 China-CEEC’s Cooperation - South vs. North misconceptions
Establishment of the mechanism, referred to by some scholars as „the newly open window of opportunities” at its early stages was considered as a new tool to build a European hub for further economic expansion of China. But in spite of the significant time since establishment of this mechanism, there is still no consensus on the format purpose. Among the most widely agreed is the assumption, that within the past four decades of advancement in Chinese development, there was a significant decrease in the knowledge and engagement with the Central and Eastern Europe (CEE), the region that was among the first to recognize the People’s Republic of China government and sharing the socialist post world-war two
“traditional friendship”147. Certainly, there is also a play in the increase of CEEC’s related to its role in the European Union, as well as materializing of idea of the Belt and Road connecting China with the European continent.
Encouragement for closer relationship of some CEEC’s with China, due to demand for new sources of development after the 2008 economic crisis in Europe was also a strong contributor to the growing interest of CPC in CEE and vice-versa, becoming an element potentially bridging China with the EU148. The above notion points to what perhaps lays among the main misconceptions of 16+1 today, that are its aim, deliverables and role, both nationally
147 In the year 2019 almost half of the members of 16+1 will celebrate to 70th anniversary of the establishment of diplomatic relations with PRC.
148 Invitation to cooperate with China on addressing the demand for development in CEE region for fist offered to
148 Invitation to cooperate with China on addressing the demand for development in CEE region for fist offered to