Brussels and/or Beijing? Moldova’s opening holds promises and risks

Office buildings in downtown Chisinau. Photo: Roaming Pictures / Shutterstock

 For Moldova, where Soviet Ladas still populate the roads, the growing sales of BYD and other Chinese EV brands are a sign of how China’s economic revolution reaches to the edges of Europe. While Moldovans have just confirmed their European Union aspirations, the country is also increasingly courting economic opportunities from China. 

Economic growth versus environmental sustainability 

This summer, the first Moldova-China Trade and Investment Forum underscored this ambition. With the presence of the largest Chinese business delegation in Moldova’s history, the forum explored potential collaboration in infrastructure, information technology, agriculture and tourism, highlighting the growing allure of deeper economic ties with China. A second edition of the Moldova-China Trade and Investment Forum was held in early December, and further cemented this bilateral dialogue. Participants discussed leveraging Moldova’s geographic location to enhance trade routes connecting Asia and Europe. 

Speaking at the inaugural forum, the Chinese ambassador to Moldova, Yan Wenbin, underscored the importance of these burgeoning ties: “China encourages and supports Chinese enterprises to invest in Moldova.” He also noted that such efforts aim to “strengthen cooperation in fields like new energy, information technology, infrastructure, and agricultural processing”.  

The Moldovan prime minister, Dorin Recean, presented Moldova as a key destination for investors, highlighting its pro-European government’s efforts to create a business-friendly environment. “Moldova offers a safe and efficient setting for business, free from bureaucracy and obstacles,” he stated, encouraging Chinese enterprises to explore opportunities in the country. The energy minister, Victor Parlicov, promoted Moldova as a “space for testing new energy technologies”, inviting Chinese firms to participate.  

Like many emerging markets, Moldova is grappling with the challenge of balancing economic growth and environmental sustainability. Pioneer projects like the 2.8 MW solar power plant in Criuleni demonstrate how Moldova could harness Chinese investment to advance its renewable energy ambitions. As elsewhere, China is keen to present itself as a provider of solutions for decarbonization. This is reflected in the evolution of Beijing’s broader strategy to solidify its economic influence in Central and Eastern Europe through projects under its Belt and Road Initiative (BRI). Moldova has been a formal member of the BRI since December 2013. 

Moldova’s growing interest in its trade relations with China must be seen in the context of its historical dependence on Russia for energy and trade. As recently as 2006 nearly 40 per cent of Moldova’s exports went to Russia. Now, over 65 per cent of Moldovan exports are directed towards EU markets, reflecting the country’s alignment with European standards and its commitment to integration. In 2023 the EU accounted for 53.7 per cent of Moldova’s total trade, followed by Ukraine at 13.1 per cent and China at 8.1 per cent. Trade with Russia has dwindled to just 3.7 per cent of the total. While China today accounts for less than ten percent of Moldova’s trade, the government wants to see this grow considerably.  

This interest is not new: negotiations for the Moldova-China Free Trade Agreement began in 2017, but progress has remained limited since then, in part because the Sandu government wanted to focus on EU relations first. This is now shifting, as demonstrated with the investment forums and the first Moldovan-Chinese political consultations in 12 years. These were held in Beijing in December, where Moldova reaffirmed its commitment to the “one China” principle while China emphasized its respect for Moldova’s territorial integrity – significant diplomatic victories for both parties. 

Pragmatic approach 

These steps could set the stage for reinvigorating negotiations on the free trade agreement. Trade between Moldova and China remains deeply asymmetrical. In 2022 Moldova exported 80.8 million US dollars worth of goods to China, including garments, electrical wire, wine, nuts and fruits, marking a sharp rise from 39 million US dollars in 2017 with a 15.7 per cent annual growth rate. These are however swamped by Moldova’s 950 million US dollars in imports from China, which are made up of largely electronics and sophisticated industrial products. A free trade agreement, if done properly, could help Moldovan exporters overcome the challenges they face, including logistical hurdles and adjusting to the demands of Chinese consumers.  

The Moldovan government certainly sees an opportunity. In a 2024 interview with Xinhua, Moldovan Deputy Prime Minister and Foreign Minister Mihai Popsoi stated, “China is a huge market. For Moldova, strong cooperation with one of its regions, or even one of its big cities, means an important step forward.” Moldova’s capital, Chișinău – the nation’s largest city and economic hub – has actively embraced opportunities to strengthen ties with China. This year, Mayor Ion Ceban travelled to Beijing to meet with the vice president of the Chinese People’s Association for Friendship with Foreign Countries. With existing partnerships in Beijing, Xi’an and Qingdao, Chișinău’s engagement underscores a pragmatic approach to leveraging China’s global influence. It is worth noting that the popular Ceban is emerging as a strong contender in Moldova’s next presidential elections.  

Another attraction of cooperation with China are loans and construction investments, in particular in Moldova’s failing infrastructure, where the needs are staggering. This includes addressing the incompatibility of Moldova’s Soviet-era broad-gauge railway network with Europe’s standard-gauge tracks, a major obstacle for trade with EU countries. Experts estimate that modernizing the country’s roads, railways and energy systems would require investments of at least five billion US dollars over the next decade – a sum far beyond the capacity of Moldova’s budget.  High levels of corruption, weak institutional capacity and limited access to global capital markets have long hindered the country’s development. These weaknesses make Chinese financing – often seen as less conditional than western aid – particularly appealing.  

As  one Moldovan scholar, Sorin Șclearuc, observes, the BRI offers promising opportunities for Moldova to modernize its transport and logistics infrastructure. “Beijing’s expertise in building and modernizing railways could be instrumental in transforming Moldova’s outdated transportation networks.” As part of the BRI, Moldova has already benefited from enhanced container transport services via the Giurgiulești Free Economic Zone at the country’s sole port upon the Danube. Since 2015, agreements with Chinese shipping companies have facilitated smoother logistics, reducing transportation costs and enabling Moldovan exporters to reach Asian markets more effectively.  

Moldova’s first Chinese-led infrastructure project, signed in 2019 with the China Highway Group and China Railway Group Limited to build nearly 300 kilometres of roads, including a Chisinau bypass and a connection to Ukraine, was promised to be completed by 2022 at an estimated cost of 400 million US dollars. However, as of 2024, no significant progress has been made, leaving the project stalled. 

Link between China and Europe? 

Relying on such instruments, however, comes with other risks that perpetuate these very vulnerabilities. One recent example can be found in Montenegro’s reliance on a massive Chinese loan to fund the construction of the Bar-Boljare highway, which has burdened the country with unsustainable debt and annual repayment obligations, something Moldova’s government is determined to avoid. Yet, Moldovan officials remain optimistic about the prospects for Chinese investments. Well aware that China is now only a minor source of foreign direct investment, Dumitru Braghis, Moldova’s ambassador to China, presented over 20 projects worth one billion dollars in sectors such as IT, agriculture and pharmaceuticals.  

“Moldova has a favorable tax system and platforms like free economic zones, industrial parks and IT parks that make it attractive to foreign investors,” Braghis remarked, highlighting the country’s strategic potential to act as a “link between China and Europe” within the Belt and Road Initiative. Increasing Moldova’s geopolitical relevance by positioning it as a logistics hub for Central and Eastern Europe could be a strategic goal that aligns with both Chinese and European interests. However, the broader challenge lies in ensuring that Moldova’s burgeoning relations with China align with its European trajectory. Good governance as well as good economics suggest Moldova should remain focused on its EU ties, despite the siren song of China. Comparatively, any announcements of Chinese investments remain modest in scale. For example, the 400 million US dollars proposed for agricultural and logistics infrastructure represents less than ten per cent of Moldova’s total requirements, while the Growth Plan for Moldova, which the European Commission just adopted, is a financial package worth 1.8 billion euros that will support infrastructure investments among other priorities. Moldova must at the very least make sure that any new foreign investments complement rather than jeopardize European funding. Environmental sustainability remains a priority for the EU. Meanwhile, Chinese investments in infrastructure and agriculture could carry environmental and social risks for Moldova. Rushed large-scale infrastructure projects could lead to deforestation, strain water resources, or disrupt local ecosystems. In a nearby example, in Serbia, Chinese-backed factories have been criticized for polluting local communities.   

Technology is another critical frontier. Europe has largely come around to viewing network infrastructure solutions offered by Chinese firms like Huawei as potential security risks. While these firms may offer the most affordable upgrades for Moldova’s digital infrastructure, their involvement raises concerns about cybersecurity and potential conflicts with EU standards. Transparency will be key to ensuring that foreign investments, regardless of their origin, support Moldova’s long-term development priorities. Non-transparent deals and opaque financing mechanisms could undercut Moldova’s efforts to combat corruption and build stronger democratic institutions. 

Balancing EU and Chinese cooperation 

Events surrounding Moldova’s recent elections have shown once more that the country’s economic and geopolitical future hinges on its ability to navigate competing pressures from the EU and Russia. In a best-case scenario, Moldova will manage to leverage Chinese investments to modernize its infrastructure and diversify its economy, all while adhering to EU standards and maintaining its European trajectory. In the worst-case scenario, poorly negotiated deals could lead to unsustainable debt, environmental degradation and increased political influence from Russia and China, derailing Moldova’s EU aspirations. 

The most likely outcome lies somewhere in between, with Moldova making incremental progress but facing continued challenges in balancing its foreign partnerships. Thoughtful planning and strategic policymaking will determine which path the country ultimately takes. While the rhetoric around Moldova’s engagement with China may raise eyebrows, the EU remains its most significant partner. To counterbalance Chinese influence, Brussels should scrutinize the sectors in which its significant financial and technical support to Moldova could be made even more targeted. Enhanced pre-accession funding, fair loans for infrastructure projects and streamlined access to the EU market could help Moldova solidify its alignment with European standards. Technical assistance towards an improved business environment could draw more EU businesses to integrate Moldova into their supply chains. EU initiatives such as the Global Gateway, designed to offer alternatives to Chinese investments, could play a crucial role in Moldova’s development strategy. By clearly demonstrating the benefits of closer EU integration, Brussels can help Moldova resist external pressures and remain on its European path. 

While Chinese investments offer opportunities for growth, they also pose risks that could jeopardize Moldova’s EU ambitions. To thrive, Moldova must deftly manage these competing pressures – securing its European trajectory while reaping the benefits of a well-calibrated global strategy. 

The author sincerely thanks Sebastian Holz for his helpful comments and contributions. The author is also grateful to Peter Chase for his valuable input and edits. 

Anda Bologa is a fellow with CEPA’s Tech Policy Program and a recognized “35 under 35” tech leader. She has driven high-level negotiations on AI and digital governance at the United Nations. She holds advanced degrees from Fordham University and the College of Europe, has passed the New York State Bar and was a Fulbright Scholar. Her work focuses on AI and tech governance. 

China, economy, European integration, Moldova