World

Observers raise concerns over China's investments in Balkans amid growing trade deficit

ANI | February 23, 2021 10:29 AM
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Beijing [China], February 23 (ANI): A decade after the establishment of the 17+1 initiative, many European countries are increasingly dissatisfied with the results, citing a growing trade deficit with China, a failure to create jobs and Beijing's slowness in opening up its markets to agricultural exports, reported South China Morning Post (SCMP).

"For a long time, China was seen as a new exciting potential investor that would bring a new impetus to [Central and Eastern European] economies," said Filip Sebok, an analyst with the Prague-based think tank the Association for International Affairs. "But in most cases, the actual results of the Chinese investments have fallen behind expectations.

"The fact that a lot of the investment was not actually job-bringing greenfield investment also made the situation worse. So the expectations that China will be a new promising investor are much more muted now," he said.

17+1 refers to the 17 Central and Eastern Europe (CCE) states with which China (the "+1") is developing ties: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia, and Greece.

"In both geopolitical and market terms, the Chinese leadership perceives the Balkans as something of a bridgehead or an open door towards Europe. This is the product of the region's strategic geography that places it at the crossroads between Europe and wider Eurasia," said Vuk Vuksanovic, a researcher at the Belgrade Centre for Security Policy.

"Moreover, some countries like Serbia are EU membership candidates which is useful in Chinese ambitions to connect themselves more with the EU markets," he said. "The political ties are a product of this Chinese ambition and desire by local nations to explore opportunities offered by China."

Laura Zhou, writing in an article in SCMP said that Beijing sees the region as a gateway to the EU, but the eagerness for Chinese cash is tempered by growing caution about whether it can fulfill its promises.

A number of government leaders stayed away from the latest '17+1' summit with President Xi Jinping.

This year leaders from six EU countries - Bulgaria, Romania, Slovenia, Lithuania, Latvia and Estonia - all failed to attend the 17+1 summit with Xi, sending more junior representatives instead, reported SCMP.

Earlier, Xi promised China would import USD 170 billion worth of goods and double the purchase of agricultural products from the region over the next five years, but the pledge may not be enough to dispel concerns. A 2012 promise to boost trade with the region to USD 100 billion by 2015 was not met until last year, reported Laura.

"This is not simply about increasing trade, but actually about meeting [the 17+1] halfway and improving trade access. Once on the market, CEE agricultural goods also face tough competition, e.g. from Australia or New Zealand, which have free-trade agreements in place with Beijing," said Sebok. (ANI)

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