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The Balkans: China’s Business In The US Zone Of Influence

The Balkans: China’s Business In The US Zone Of Influence
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China’s economic presence in the Balkans does not pose a risk for the United States and the European Union, although some Western officials warn the region can easily become one of the chessboards where the big power game can be played. In spite of such a fearmongering, Chinese influence in the region remains rather limited even after Beijing sent medical teams and protective equipment to Balkan countries battling the coronavirus.

It is quite questionable if China’s “mask diplomacy” resulted in increased Chinese political influence in the region. According to the European Enlargement Commissioner Johannes Hahn, the EU might have overestimated Russian and underestimated Chinese influence in the Balkans. However, unlike Washington and Brussels, Beijing is quite refrained from positioning itself on political matters in the Balkans. Before the COVID-19 pandemic it was mostly focused on growing investments and increasing its economic footprint in this part of Europe. 

In April 2012, just a year before Xi Jinping became president, China launched the 16+1 initiative, a platform bringing together China and 11 EU member countries in Eastern Europe as well as five candidate states in the Balkans. Lately, Greece, too, has made an effort to join this grouping of post-communist states, which has been rebranded 17+1. Ever since, China started making important investments in infrastructure in Serbia, North Macedonia, Bosnia and Herzegovina, and also in Montenegro where Chinese Road and Bridge Corporation is building a highway that is intended to link the Adriatic port of Bar to Serbia’s capital Belgrade. According to the official statistics, the Montenegrin government’s borrowing from China to finance the road’s cost, estimated at €1.3 billion, has sent the country’s debt soaring from 63 per cent of gross domestic product in 2012 to almost 80 percent. Reportedly, if Montenegro were to default, the terms of its contract for the loans give China the right to access Montenegrin land as collateral. China is also making large investments in other parts of the Balkans, namely in infrastructure and energy. Since 2009, Chinese company COSCO has been in charge of the main Greek port of Pireus, first as an operator and then as a majority owner. Until 2017, COSCO was also bidding for the Thessaloniki port.

Chinese investments in Balkan countries that are out of the EU are primarily concentrated in Serbia, which has the region’s largest economy and accounts for 44% of regional GDP. Beijing’s projects related to Serbia mostly include the modernization of the country’s infrastructure, as well as Chinese’s Huawei offers to help Belgrade build its 5G network. So far Serbia has been pinpointed for projects worth more than 2.5 billion euros. The most significant project is the upgrade of the Belgrade-Budapest railway. By modernizing the railroad, Beijing would establish a transportation corridor between Piraeus in Greece and Western Europe via North Macedonia, Serbia, and Hungary. It remains to be seen if this project will be implemented, since the EU is attempting to block it.

Besides that, in 2019 Serbia has reportedly agreed to the delivery of nine Chinese combat drones who are able to strike targets with bombs and missiles and can be used for reconnaissance tasks. Also, last year Chinese police started joint patrols with their local counterparts in three Serbian cities. Officials said the measures would help a growing number of Chinese tourists feel safe when they visit Serbia, although two of the target cities – Novi Sad and Smederevo – are better known for Chinese investment than for tourism. Even though borders are closed due to the outbreak of COVID-19, Serbian officials recently launched a campaign to attract Chinese tourists to the country. It remains to be seen if a potential return of Chinese travelers will also mean a return of the Chinese police officers. It is worth noting that in 2016 Chinese police started patrolling the streets of Italian cities such as Venice, Rome and Milan. Last year, law enforcement officers from China joined Croatian colleagues apparently protecting Chinese tourists in the former Yugoslav republic. Many analysts argue that Chinese police patrols, although unarmed, directly undermine remnants of the countries’ sovereignty. However, when it comes to Balkan states that are out of the EU, any form of sovereignty is a wishful thinking, as the region is a de facto protectorate controlled by the Western powers.

In spite of its growing economic influence, China still has little cultural appeal to young people in the Balkans, who are emigrating to Western countries in large numbers, driven away by the lack of job opportunities at home. Still, Chinese cultural influence in the region is reportedly growing. The government of Republika Srpska, the Serb-dominated entity in Bosnia and Herzegovina, has authorized the Ministry of Education and Culture in the entity to sign an agreement on the provision of Chinese classes with the Confucius Institute in Beijing. Chinese language was already introduced in some schools in Republika Srpska as an optional language in September 2017. Some universities in Serbia, such as the University of Belgrade and the University of Novi Sad, have cooperation agreements with Chinese faculties which enable their students to come and study in Serbia.

According to pro-West apologetics, there is no public debate in the Balkans about the opportunities and challenges related to increased Chinese presence in the region. On the other hand, there is no public debate on the Western economic, cultural and military presence either, which puts the Balkan countries in a position of modern colonies where various global powers are fighting for more influence. Due to its relatively small size, the Balkan market is not of particularly high interest for Chinese firms when it comes to trade and investment. China is far more interested in doing business with big and rich EU countries. However, since in the years ahead the world will likely see the geopolitical rivalry between the US and People’s Republic intensify, China’s access to Western markets may become quite limited, which means that for Beijing the Balkans can become some sort of consolation prize.

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1 comment

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Show me May 22, 2020 at 8:15 pm

Considering that the Balkans are poor, verging on poverty, and China’s new found wealth, Chinese Communist money will likely be welcome, but there are likely strings attached.

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