China’s drive to win political friends was stumbling over unmet trade expectations and mounting public debt, until the COVID-19 pandemic’s impact on economies offered Beijing new possibilities in Europe, two foreign policy experts said Monday.
The 17 Central and Eastern European nations in a loose trade arrangement with Beijing – the Cooperation between China and Central and Eastern European Countries founded in 2012 — now may be less insistent on transparency in future agreements to spur investments to resuscitate their economies than they were but a few months ago, said Ivana Karaskova editor of a new report on European-Chinese relations said.
The financial calamity in Europe raised concerns for five countries in the group, outside of the European Union, that they may not be able to stop the economic freefall without large amounts of outside investments from places like China, Karaskova said during the Wilson Center online forum.
The question for the 12 other nations in the trade agreement is what the EU will do to help them. For the past eight years, when nations from the Baltic to the Balkans and the former Soviet Union signed on with China, the EU generally ignored non-member economic problems, arising from the financial collapse of 2008, panelist Mikko Huotari said.
He traced that attitude back to the “Old Europe” — led by France and Germany — lacking interest in “New Europe,” countries in the former Warsaw Pact or the Soviet Union.
He added that, at the time, the EU didn’t consider China either a competitor or rival, but a trading market.
Karaskova said, “somehow we [the EU] pretend it’s not there,” even now.
Unlike the EU or NATO, the European trading bloc with China “is not a treaty organization,” so other European countries can join, stay or leave. “The reason to join was economic benefits to members” coming from a power far from their borders to nations.
“What [the 17 members fear] is Russia,” politically, militarily and diplomatically, so China, who was already offering its Belt and Road Initiative, was an attractive wealthy partner when it came courting.
“There is no clear blueprint” as to the goals China or the 17 European nations have set for themselves, Karaskova said, and the report, “An Empty Shell No More,” details. That flexibility also increased its appeal to Central and Eastern European governments.
Although the pandemic forced the postponement of this month’s group meeting, she added that the official gatherings are less important than what the individual members work out with the Chinese over trade, people-to-people exchanges and financial investment. The European members don’t share the financial information among themselves in what is a hub-and-spoke arrangement with China as the hub.
In setting up the arrangement in 2012, Beijing’s long-range goal was to win influence in Europe, Huotari said. But “to some extent” the Chinese are getting what they want politically from the 17 European nations. He cited the Europeans’ push to weakening EU condemnations of human rights violations and leaning toward Beijing’s territorial claims in the South China Sea.
Karaskova said, “the good news” for the West has been that the 17, with the exception of Greece, Hungary and Serbia, “don’t seem to have moved farther to China’s side” in almost every arena. It is also clear that “China is the driver” in the arrangement, she said, which can have an economic and political impact as the fallout from the pandemic becomes known.
China flew planeloads of medical equipment and six experts in containing the virus to Serbia at the beginning of the month. On the plane’s arrival in Belgrade, Serbian President Aleksander Vucic kissed the Chinese flag in gratitude, and billboards thanking Chinese President Xi Jin-ping for how well the assistance has gone.