International Affairs Analyst
Summary
The article aims to analyse, on the one hand, the developments of the Belt and Road Initiative in the Western Balkans and, on the other hand, its possible consequences for the role of the EU in the region. In particular, the first part discusses the main projects of the Belt and Road Initiative in the Balkans and the relations between China and the Western Balkan countries. The possible consequences for the EU's role in the region are then listed and it is also underlined how relations between China, the EU, and the Western Balkans have changed to date. Finally, the question is raised whether China can actually replace the EU in the Balkan region. However, the consideration that emerges is that rather than what China does, we should look at what the EU does. Indeed, Brussels is always the preferred ally of the Western Balkan countries, but this could change if there are no significant developments in the relationship between the EU and the Balkan region.
The Belt and Road Initiative (BRI) is an ambitious programme of the Chinese government that wants to finance various infrastructure investments in almost every corner of the globe with more than USD 1 trillion. The initiative, strongly supported by Xi Jinping, President of the People's Republic of China, was launched in 2013. In detail, the Belt and Road Initiative is a set of projects financed by the Beijing government and aimed at building or upgrading commercial infrastructure - roads, ports, bridges, railways, airports - and facilities for the production and distribution of energy and communication systems. All this is also aimed at facilitating and further enhancing trade relations and exchanges between Chinese companies and the rest of the world. So, it could also be defined as a global trade plan that, according to the World Bank, could reach one third of all world trade and involve 60% of the planet's population. In China's sights are also the Western Balkans, where major investments have been initiated as part of the Belt and Road Initiative. In light of this, the article will attempt to shed light on the main funding of the Chinese project in the Balkan region and how this may undermine the role of the EU. I will try to shed light on the consequences for relations between the EU and the Western Balkan countries and possible future developments.
China and the Western Balkans
China's interest in the Balkan countries stems mainly from the fact that they represent a geographical connector between the Mediterranean and Central Europe and a bridge between Western Europe and the Eurasian continental landmass. The Chinese presence in the region is mainly characterised by a mix of soft power initiatives and economic-infrastructural investments. Today, all Western Balkan countries, with the exception of Kosovo - whose independence Beijing does not recognise - are members of the 16+1 (China-CEE) initiative. As part of the Belt and Road Initiative, it aims to facilitate the movement of Chinese goods from various southern European ports to northern Europe via the Balkans. Secondly, Chinese loans and investments for financing infrastructure projects are strongly encouraged in the Western Balkan countries also because they are not subject to strict standards, such as those of the EU-sponsored Western Balkans Investment Framework (WBIF).
Furthermore, the six Western Balkan countries that do not yet belong to the EU - Albania, Bosnia- Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia - represent economies with high development potential. With its usual insight, China invested EUR 32 billion in the region between 2009 and 2021. In Serbia alone, its investments reached EUR 10.3 billion. On the other hand, the Sino-Serbian partnership was also sanctioned by Beijing's support for Belgrade's claims on Kosovo and Serbian support for China's unified policy towards Taiwan, Hong Kong, Tibet, and Xinjiang.
Despite the inflow of Chinese capital, however, the EU remains the largest economic partner, accounting for 70% of total Foreign Direct Investment (FDI) and 81% of exports.
However, unlike the EU, China presented itself as a pragmatic investor, seemingly disinterested in meddling in the internal political affairs of its partners and willing to ignore certain critical issues prevalent in the area such as corruption, bad governance and the precariousness of the rule of law.
While at first Beijing's attention was focused on transport infrastructure, its interest was later extended to the industrial, energy, telecommunications, and IT sectors. This general interest was followed by concrete initiatives such as loans and investments towards the Western-Balkan countries, which now risk falling into the Chinese debt-trap in the event of default, the first dangerous step towards eventual 'vassalisation' vis-à-vis Beijing. The Belt and Road Initiative in the Western BalkansThe largest Chinese investments concern Serbia, which, as mentioned above, Beijing also supports for its territorial claims, e.g. the control of Kosovo. Moreover, ties between these two countries were further strengthened during the Covid-19 pandemic, when the Chinese government provided Serbia with urgently needed medical supplies, thus fulfilling a task expected of the EU.
Besides Serbia, however, there are also interesting developments in other countries in the region. For instance, Albania represents a unique case in terms of relations with China. While Beijing is a recent interlocutor for most governments in the region, for Tirana China was its main partner and ally for almost twenty years (1961-1978). Even today, a substantial part of Albania's GDP is produced thanks to capital investments, e.g. dams, power plants, made by China before the breakdown of bilateral relations following the death of Chairman Mao. However, despite some very visible initiatives, such as the concession of Tirana airport to the company 'China Everbright Limited', Chinese engagement in Albania still appears rather timid.
In neighbouring Macedonia, Chinese activism in the modernisation of road infrastructure, e.g. the financing of the Kicevo-Ohrid and Miladinovci-Stip motorway sections by the China Exim Bank, has become part of the turbulent climate of political and institutional confrontation that has shaken the country in recent years. For instance, one revelation based on recorded wiretaps was made public by the then opposition leader Zoran Zaev, now the Social Democrat prime minister. It was against the conservative prime minister Nikola Gruevski and concerned precisely the agreement with China on motorways. In the recordings, Gruevski and his associates are said to have commented on the size of a maxi-bribe obtained from Chinese investors to complete the deal. A sum of money that, if actually transferred, and given the small size of a country like Macedonia, would probably have stretched Gruevski's ability to remain in power by months, if not years. The Macedonian case highlights one of the problematic aspects of Chinese engagement in the Balkans and beyond: Beijing's predilection for agreements between states, rather than through private companies, which opens up scenarios of opacity and corruption. Another disputed aspect is the tendency of Chinese companies to mainly employ personnel and machinery brought directly from the motherland, instead of involving local subcontractors with a limited impact on the economy of the Balkan countries. For example, this is the case for the construction of a motorway that is supposed to connect the Montenegrin port of Bar with Serbia.
What consequences for the EU?
Beijing's actions in the Western Balkans have not gone unnoticed in Brussels. Indeed, in the 'Strategic Compass', an action plan published in 2022 that aims to assess the geopolitical threats the EU might face in the future, the EU lists China's influence in the Western Balkans as a threat and a possible cause of instability and insecurity. The general fear is that China is trying to politically influence the Balkan region by economic means.
For instance, by entering economies that in a decade or so could be part of the European single market, but where today the rules governing foreign investment are still relatively flexible, China is seen by Brussels as an actor that is intentionally circumventing EU control mechanisms. Moreover, China's growing influence in the Western Balkans seems to complicate not only the reform of the EU agenda, but also the entire neoliberal set-up in the region. While the EU promotes a free-market approach to economic development - a model that provides for strict regulation and requires transparency in public spending - the model of economic development exported by China to the Balkans is highly statist. For example, China prefers tenders for infrastructure projects to the creation of ad hoc laws.
Moreover, the EU's fears of the Chinese presence in the Balkans are aggravated by suspicions of corruption, doubts about the quality of Chinese projects, and the fear that the Balkans' growing indebtedness to Beijing opens the way to forms of political subservience.However, Europe's scepticism towards Sino-Balkan relations is inextricably linked to the general trend of relations between Beijing and Brussels. As evidence of the shifting balance of power between China and the West, one needs only consider how the 'Chinese threat theory' now finds fertile ground in the European Union, where China is accused of implementing unfair economic practices, quietly subverting liberal democracy, and pursuing a divide-and-conquer strategy to weaken the continent.
This is the framework in which the EU's responses to the evolving Sino-Balkan relationship must be understood. Western European scepticism also has to do with the fact that Western Europe thinks of the Balkans in terms of a European 'Other', a dynamic that reduces the image of the region to that of an 'object' subordinated to a competition between great powers. In doing so, some Western European countries deny the Balkans any autonomy of action, keeping them in a position of imaginary
subalternity.
The EU, the Western Balkans, and China
One of the main reasons why China's strategy of rapprochement with the Balkans might be successful is the relative detachment that the EU seems to have adopted towards the region after the 2008 financial crisis - an event that allowed China and other non-European actors to present these countries with large amounts of capital and alternative visions of development to European ones.
However, this trend seems to have reversed in recent years, with the EU once again interested in European expansion in the Balkan region. In this regard, with its return to the Balkans, the EU was forced to recognise China as a new and important external actor active in the region. In particular, in formulating its policies with regard to China's work in the Balkans, the EU has to reckon not only with a changing geopolitical reality, but also with the needs of the Balkans themselves and the weaknesses of Brussels in trying to present itself as a transformative power in the region. For instance, the EU has failed to address the economic disparity and the urgent need for an economic miracle to bring the Balkans up to the level of the rest of the Union. According to the World Bank, to reach the same level of economic prosperity as the EU, the economies of the Western Balkans must grow by at least 5% per year, for 20 years. At current growth rates of 2-3% per year, the Balkans will need another 60 years before they reach EU levels of development. Given this failure, the economic reality of the Balkans is one of the main reasons why Brussels cannot deal with Beijing as a strategic competitor. Indeed, the governments of the Balkan region see in China a partner whose global agenda is complementary and functional to their needs and also an ally whose economic diplomacy favours their development. China also enables projects, such as the completion and modernisation of the pan-European corridors, which are priorities for the Balkans, even if they are not yet priorities for the European Union.
At the same time, however, it should not be forgotten that all countries in the Balkan region have integration into the common market and EU membership as their ultimate goal. This implies that if the national interests of the Balkans were truly taken into account in Brussels, China could never be seen as a direct competitor of the EU. With this in mind, the EU could engage China constructively in order to ensure that Sino-Balkan cooperation initiatives contribute to economic growth and prosperity in the region in a sustainable way, without hindering EU enlargement processes.
Conclusion
To conclude, China's role in the Western Balkans is now undeniable and the Belt and Road Initiative has accelerated the rapprochement between the economies of these countries. However, the role of the EU still remains important in the Western Balkans. Indeed, these countries strongly desire to join the EU and would only prefer China to Brussels if European leaders disengaged from the region. It can therefore be said that the Belt and Road Initiative has strengthened Chinese influence in the Western Balkans, but the EU's role has not yet been compromised. However, this could happen if Brussels continues to waver towards the Balkan countries. It is therefore clear that the EU, rather thanworrying about the Belt and Road Initiative in the Balkan region, should worry about its decisions and actions, which continue to displease the Western Balkan countries.
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