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China takes it all in the Black Sea region

China is becoming a major player in the Black Sea, to the advantage of the countries of the post-Soviet space and under the sometimes concerned eyes of Russia and the European Union member states.

February 19, 2019 - Michael Eric Lambert - Articles and Commentary

Ministry of Foreign Affairs of the People's Republic of China. Photo: WhisperToMe (cc) wikimedia.org

With its New Silk Road project, officially launched in 2013, China is now investing heavily in the Black Sea region and is gradually becoming a key player in the area, while the attention of both Russia and the West is still focused on the containment of Russian-fueled conflict in Georgia, Moldova, and Ukraine. China’s increasing presence is an opportunity for Black Sea countries to modernise the infrastructures and encourage foreign investments to develop their economy.

China’s growing investments from vegetable to high-tech industry

In May 2017, Beijing and Tbilisi signed a Free Trade Agreement, almost one year after the entry into force of the Association Agreement between the EU and Georgia. The Chinese decision to launch such an agreement with Tbilisi is therefore probably not a coincidence. Located at the crossroads between Asia and Europe, Georgia is China’s gateway to the European market, while its Belt and Road Initiative (formerly known as OBOR) aims to connect the two continents to increase trade. In this context, and although not constituting official axes of the new silk roads, several projects have been launched, such as the Baku-Tbilissi-Kars railway line, inaugurated on October 30th 2017, and going through Turkmenistan, Iran, Armenia and Georgia.

The Chinese-Georgian Agreement, officially entered into force on January 1st 2018, should facilitate exports in both countries, especially when it comes to wine, mineral water and agricultural products. Georgian goods are now gradually leaving the Russian and EU market, where they were relatively well known and appreciated, to end up in China. For example, between 2016 and 2017, Georgian wine exports to the Chinese market increased by 43 per cent, making China the largest importer of Georgian wine after Russia and Ukraine.

China has become a major player and the Chinese language is now the third foreign language taught after English and Russian in Georgian universities. The Chinese stalls are multiplying, and the buildings in the Tbilisi Sea Plaza are growing rapidly, making emerge an imposing Chinatown within the capital and gradually erasing the old Soviet buildings from the landscape. A similar situation is happening in the other states of the Black Sea region, particularly in Ukraine where trade with Beijing increased by 18 per cent between 2016 and 2017, and in Moldova which now exports cognac, wine and tomatoes to Chinese territory. Chisinau also negotiated a free trade agreement with Moldova in 2017. In Armenia, China’s presence is also visible on the territory. Surprisingly, public transport buses in Yerevan display a Chinese flag on their facade, which 250 of them have been donated by Beijing to Armenia in 2012.

Chinese investments in de facto or partially recognised states in the Black Sea region

While EU member states and the United States still dare to invest little in the unrecognised Russian-controlled para-states in the post-Soviet, at the risk of offending relations with countries to whose sovereignty they belong, China, meanwhile, is not limited to the borders recognised by the United Nations. Thus, the Kvint group in Transdnistria, a de facto state that declared its independence from Moldova in 1991, could not hide its astonishment when the Chinese delegation visited the territory to increase imports of Transdnistrian cognac. In Abkhazia, a territory only recognised by Russia, Nicaragua, Venezuela, Nauru and recently Syria, the authorities decided to refuse China’s offer to send 3,000 Chineses workers to invest in the renovation of ports and roads, fearing losing control of the territory and their identity. Despite this, Chinese investments in this territory of only 240,000 inhabitants are real, albeit limited to a few agricultural businesses.

The de facto states are for China an opportunity to develop its investments. Indeed, social standards are lower, products easier to tax and wages are more affordable compared to other recognised countries in the region, while the working conditions are not looked at. Beijing seems to be taking a certain advantage from the frozen conflicts and rivalries in the Black Sea region, and is counting on an intervention by the Russian army in the event of an attack on its infrastructure. As such, it does not hesitate to play on pre-existing tensions such as those between Armenia and Azerbaijan for the construction of its infrastructure supposed to connect Russia to Turkey and Armenia to Iran.

The lack of reaction from the West and the Russian Federation

How is Russia reacting to Beijing’s growing power in its near abroad? The relationship between the two countries appears more and more unbalanced, both economically and militarily. China is already the largest importer of Russian goods, which limits Moscow’s ability to disapprove any choices coming from its Chinese neighbour, while the countries in post-Soviet space see the Chinese presence as a way to disengage, step by step, from the Russian influence. Given its economic difficulties, increased by Western sanctions, Russia sees in China an opportunity to strengths its economic power too. The Kremlin hopes to take advantage of the OBOR to develop its infrastructure, particularly in the Siberian region (Beijing has issued the possibility to use the Trans-Siberian for freight transport to Western Europe).

For their part, the Western countries seem to follow the same path towards China’s growing presence. Washington, trying to contain Beijing in the South China Sea, cannot afford to curb its economic presence in the eastern and western parts simultaneously. The EU countries, for their part, are not in a position to offend their relations with China and appreciate its economic assistance in the Black Sea region since the investments of the Eastern Partnership do not seem to give the results expected.

Thus, the arrival of China in the Black Sea is an opportunity for both Western powers and countries in the region to rethink their approach and ask themselves fundamental questions about the consequences of their divisions and rivalries. Beijing confronts the United States and the EU with their lack of pragmatism and their reluctance to adopt a new approach towards frozen conflicts in the region. A similar situation with Russia, unable to generate a constructive dialogue in the post-Soviet space, finds itself in a pattern of Chinese dependence while ensuring the security of infrastructure that does not belong to it.

Michael Eric Lambert is a (Geo)political scientist specialised in cyber security, Eastern neighbourhood & Sino-European/Russian relations (Ph.D. at Sorbonne University in partnership with the INSEAD, 2016). His articles on Europe and the Soviet Union, which combine an atypical mind with a whimsical approach, allow him to tackle issues from a provocative and original angle.

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