Strategic Rivalry over Eastern and Southeastern Europe

With Deliveries of Vaccines, Beijing strengthens its position in Eastern and Southeastern Europe –to Berlin's dismay.

BELGRADE/BEIJING/BERLIN | | chinajugoslawien

BELGRADE/BEIJING/BERLIN (Own report) - China, in view of the EU's vaccine disaster, is offering Covid-19 vaccines also to other Eastern and Southeastern European nations, in addition to Serbia and Hungary. This is the result of yesterday's "17 +1" summit meeting, to which representatives of 17 Eastern and Southeastern European countries met with China's President Xi Jinping in a video conference. Over the past nine years, Beijing has been strengthening its relationships in the region with the "17 +1" format. Last year, trade with the participating countries had increased by 8.4 percent, in spite of the corona crisis, to reach a volume of more than US $103 billion, and Chinese investments in the area have again increased, despite the massive pressure being applied by both Brussels and Washington to persuade the countries to, at least, limit their cooperation with China. According to a recent survey by the European Council on Foreign Relations (ECFR), the People's Republic of China has "become the most prominent third actor" in non-EU Southeast European countries, including Serbia. Berlin is also struggling against U.S. attempts to strengthen its influence in the region.

"17 + 1"

The "17 +1" cooperation format with China has provided some economic benefits to the 12 EU and 5 non-EU countries of Eastern and Southeastern Europe, who have been involved since its inception in 2012. For example their trade volume has since grown with the People's Republic at an annual average of eight percent. Last year - despite the corona crisis, which otherwise provoked a slump in economies - their bilateral trade volume increased by 8.4 percent to US $103.45 billion. Estimates vary on the amount of direct investments in the countries of the region. According to the Berlin-based think tank Merics (the Mercator Institute for China Studies), direct investments for the 12 EU member countries in the "17 +1", during the period from 2010 to 2019 were at €8.6 billion.[1] In addition, the project financing and loans also figure in the billions. Significant Chinese investments have been made in Greece and Hungary, among others. Since the China Ocean Shipping Company (COSCO) bought the Greek port of Piraeus, it rose from ranking 17th to 4th place among European container ports, thus making it the largest container port at the Mediterranean.[2] Chinese companies are also working in Hungary, particularly on the rapid rail line between Budapest and Belgrade.

"Most Prominent Third Actor"

Within the "17 +1" framework, China is cooperating particularly closely with the five non-EU member countries in Southeast Europe (Bosnia-Herzegovina, Serbia, Montenegro, North Macedonia, and Albania). Serbia has become a site of significant Chinese investments. In 2016, the Hesteel Group, one of the world's largest steel mills, took over the long-established Smederevo steel mills, one of Serbia's largest enterprises. The steel mill, previously owned by U.S. Steel, had fallen into a crisis with heavy losses, and was then sold by the US company. Already in early 2019, according to reports, Hesteel had not only pulled the company out of the crisis, but even transformed it into the most competitive steel mill in Europe.[3] Of course, Hesteel in Smederevo is not without controversy. Since some time, residents have been protesting against the pollution the steel mill is creating. The protests are being instrumentalized by the Green MEP Reinhard Bütikofer and his Inter-Parliamentary Alliance on China (IPAC), to incite animosity toward Beijing.[4] The People's Republic is, nevertheless, enhancing its influence in Serbia and the neighboring non-EU member countries. Recently, a study by the European Council on Foreign Relations (ECFR) concluded that Beijing has "become the most prominent third actor" in the region.[5]

Pressure from Brussels and Washington

Particularly the EU members among the "17 +1" countries have been made to feel the massive pressure not only from Brussels but also from Washington, to draw back on their cooperation with Beijing and, at least, to pull out of their independent cooperation formats. From Berlin and Brussels is often heard, the EU must not let itself be divided - an argument that the "17 +1" reject pointing to the fact that the powerful countries in Western Europe, particularly Germany, cooperate themselves, independently with China. Poland's former Minister for Foreign Affairs, Radoslaw Sikorski recently remarked that "Western Europeans have their longstanding commercial relationships with China […] and they are not letting us, Central Europeans into those relationships."[6] Should the "17 +1" be phased out, then "the rest of the European Union" must cease their unilateralism. This would particularly pertain to Germany. Furthermore, the pressure from Brussels and Washington are repeatedly targeting specific Chinese projects in Eastern and Southeastern Europe. Recently, Croatia was forced to cancel its call for bids for the country's only deep-sea port, because Chinese companies stood good chances of winning the contract. Whereas, in Rumania, the government decided to exclude companies from the People's Republic from participating in its highway and rail construction projects.[7] Chinese participation in the construction of a tunnel from Helsinki to Estonia's capital Tallinn is being bitterly opposed.[8]

The Three Seas Initiative

In their strategic rivalry for influence in Eastern and Southeastern Europe the major western powers are, of course, also divided among themselves. Berlin, which considers the region to be its exclusive sphere of influence, seeks to consolidate the EU into a uniform foreign policy block - so far without much success - and maintain its paramount influence over the five non-EU member countries in Southeast Europe. Over the past few years, Washington, on the other hand, has sought to reinforce its influence in the EU's east and southeast through the "Three Seas Initiative," - at Germany's expense. The initiative dates back to a thrust from Washington during the Obama administration. It had been initiated in 2015 by Poland's President Andrzej Duda and the President of Croatia, at the time, Kolinda Grabar-Kitarović and officially launched at a summit meeting in Croatia's Dubrovnik on August 25 - 26, 2016. (german-foreign-policy.com reported.[9]) One of its objectives is to strengthen the bonds between the participating countries with infrastructure. Like China's "17 +1" cooperation efforts, the "Three Seas Initiative" is also based on the fact that over the past 30 years, the countries of Eastern and Southeastern Europe had been oriented on the economic interests of the rich countries in the west of the continent - particularly Germany - but otherwise they were largely neglected. This has opened opportunities for outside powers to strengthen their influence in that region through economic cooperation.

China, the Vaccine Provider

The situation is no different in the current fight against the Covid-19-pandemic. Already in the spring of 2020, the EU had effectively cut off support for the five non-EU countries in Southeast Europe, by imposing an export ban on protective medical equipment. China then stepped in, at least partially, providing Serbia with the appropriate relief supplies. Berlin and Brussels reacted with the accusation that Beijing was engaging in "mask diplomacy."[10] The development is similar in regards to the Covid-19 vaccines. The EU had flamboyantly announced its intentions to seek to supply the world with vaccines, when in fact, it has not even been capable of providing its own member countries with the necessary doses of vaccines.[11] For the second time, China is coming to Serbia's aid. It has now delivered a million doses of vaccine to that country. Serbia has now been able to immunize 8/100 members of the population - placing it in third place behind Great Britain (18.86 immunizations per 100 inhabitants) and Malta (8.89/100). Germany has immunized 3.91/100. Recently, Hungary became the first EU member country to order vaccines in China and expects to receive the first installment of the five million doses in the course of this month. That will suffice to immunize around one quarter of the population. At yesterday's "17 +1" summit, China's President Xi Jinping promised further deliveries.[12]

 

[1] Grzegorz Stec: Central and Eastern Europe and Joint European China Policy: Threat or Opportunity? merics.org 01.10.2020.

[2] Beth Maundrill: Piraeus becomes top Mediterranean port. porttechnology.org 21.05.2020.

[3] Vedran Obućina: Incredible rise of Serbian steel industry. obserwatorfinansowy.pl 19.03.2019.

[4] MEPs concerned over increasing Chinese influence in Serbia. emerging-europe.com 20.01.2021. On IPAC see also The Green Cold War.

[5] Vladimir Shopov: Decade of Patience: How China Became a Power in the Western Balkans. ECFR Policy Brief. February 2021.

[6] Grzegorz Stec: Central and Eastern Europe and Joint European China Policy: Threat or Opportunity? merics.org 01.10.2020.

[7] Andreas Mihm: Chinas Charme-Offensive im Osten. Frankfurter Allgemeine Zeitung 08.02.2021.

[8] Mette Larsen: Chinese-backed Finnish venture of world's longest undersea rail tunnel back on agenda. scandasia.com 27.01.2021.

[9] See also Osteuropas geostrategische Drift.

[10] See also The "Politics of Generosity".

[11] See also The EU's Vaccination Disaster.

[12] China bietet Osteuropa Impfstoff an. n-tv.de 09.02.2021.