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China’s Belt and Road Initiative – A project of trade and diplomacy

China’s ambitious quest to recreate the ancient trade routes into Europe is slowly taking shape. What does China’s growing presence mean for Eastern Europe and the Caucasus?

April 18, 2018 - Mihai Chihaia - Analysis

Chinese Dragon Lantern Festival in Eastern China Photo: GoShow (cc) www.flickr.com

China’s Belt and Road Initiative (BRI) is an ambitious project that seeks to connect Asia and Europe with the purpose of increasing trade and generating considerable economic growth. It is gaining momentum recently and becoming more noticeable, as one of its aims is gaining access to the European markets and involves significant investments in infrastructure. At the same time, it offers economic alternatives for countries that are willing to take part in this project.

Moving ahead with the BRI also involves more attention towards Eastern Europe and Caucasus which represent an essential link between Asia and Europe. This means developing enhanced relations with the countries from these regions as well as an infusion of capital in the economies in question. Moreover, no one can deny the geopolitical implications that this project also brings, even though it is branded solely as an economic super project. China moves ahead in building bilateral partnerships that make it more present in the European space and more importantly in the Russian backyard. It is interesting to observe that China is progressing largely unnoticed, using a strategy that is based on working with any country interested in its project, seeking not to get in dispute with any party, and maintaining a balanced approach to frozen conflicts.

Most of the Eastern European and Caucasus countries have good bilateral relations with China and welcome enhanced ties, especially in the light of more Chinese investments. China is also viewed as a new face to turn to. A few examples outline China’s quiet presence in the region best. For instance, the Republic of Moldova is in the process of negotiating a free trade agreement with China, Georgia (which, from a geographical perspective is an important link to reaching Europe) has already signed such an agreement with China and the Chinese companies are already involved in the Georgian economic environment. Furthermore, China is also an important partner for Azerbaijan which has a paramount strategic location for the transit sector. In Ukraine, Chinese companies are very active with investments in port terminals, transport infrastructure, and with more projects underway that go hand in hand with enhancing the partnership between the two countries in a variety of fields.

China also shows readiness to strengthen relations with Romania and Bulgaria, the latter is to host the Central and Eastern Europe – China 16+1 Summit in 2018. Central and Eastern Europe – China 16+1 is a framework for cooperation through which China reaffirmed its commitment to invest and its partners showed openness to upgrade ties. The cultural and educational dimension must be mentioned as well with China developing educational partnerships and opening cultural centres such as the one in Sofia, inaugurated in November 2017. Each country is specifically important for China, either as a transit hub, emerging economy, or as a promising market. The aim is to cooperate over a multitude of fields enabling the development of a multilevel and multi-layered cooperation with partners, thus strengthening China’s position in Eastern Europe and Caucasus.

It is yet unclear how these set of projects will be interconnected in the framework of the Belt and Road Initiative given the fact that they also depend on deepening political relations with a variety of states with different foreign policy aims. It is also unknown whether investments and deepened political relations will materialise according to the intentions announced. At the same time, it is uncertain how China will use the political leverage gained through its initiative. A key question generated by the Chinese engagement is related to how other regional and global actors will react. In spite of these unknowns, the Chinese investments will continue to be very welcome in Eastern Europe and Caucasus especially because they are not conditional and have the potential to significantly contribute to the local and regional economic development.

Mihai Chihaia is an expert with the Romanian think tank Strategikon and is currently undertaking his PhD in International Relations. He has previously been an exchange research fellow at Tel Aviv University and worked as assistant to the European Commission Representative in the Political and Security Committee of the European Union.

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