Chinese cash now reaches all of Central and Eastern Europe

Business & Technology

Caixin reports that with Chinese Premier Li Keqiang’s 李克强 visit to Budapest, Hungary, and the announcement of agreements with Estonia, Slovenia, and Lithuania, China’s Belt and Road Initiative is set to “expand to include all 16 central and eastern European countries (CEEC).”

  • China and the CEEC countries also announced the establishment of a China-CEEC Inter-Bank Association, which will receive $2.4 billion in funds from the China Development Bank.
  • While Li was in Budapest, Chinese and Serbian officials also formally launched the construction of a multibillion-dollar railway — majority-financed by China — between Hungary and Serbia, the AP reports.  

China’s investments in the region have not been without controversy.

  • The Financial Times notes (paywall) that the Hungary-Serbia railway has “triggered an investigation by the [European Commission] into whether the project violated EU laws,” because it was not opened to competitive tender.
  • Additionally, a Chinese-funded highway in Macedonia has run into trouble with that country’s transport and communication ministry.

Then there’s the political angle. A different article (paywall) in the FT, titled “Eastern Europe welcomes China investment promise,” notes contrasting views:

  • Some analysts, such as Tomas Valasek of Carnegie Europe, say that China’s investments in CEEC are “a curiosity” compared with the “all-defining political and economic reality” of EU membership.
  • But European diplomats say that China’s influence in Europe is being heard clearly through CEEC states, who “insisted on watering down an EU statement” on the South China Sea last year, while Hungary and Greece have more recently “told their partners in the [EU] that they would not support statements critical of China’s human rights record.”