How China’s Global Infrastructure Strategy Is Undermining European Integration in the Western Balkans and Beyond – Vindobona.org

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The Western Balkan countries – Albania, Bosnia and Herzegovina, North Macedonia, Kosovo, Montenegro and Serbia – have aspired to join the European Union for years. The EU has provided each of these six countries with the prospect of EU membership, and their possible membership is a frequent topic of discussion and debate in Brussels. Although the EU continues to express its intention to eventually integrate the Western Balkans into the Union, China’s overall infrastructure strategy, in particular the controversial Belt and Road Initiative (BRI), could undermine the enlargement process.

At first glance, China may seem alien to the EU enlargement process. However, China has repeatedly been accused of using the multi-trillion dollar BRI as a way to gain influence over other countries, including many in Europe. Given these accusations that China is using predatory lending on BRI projects to influence decision-making in other countries, China’s infrastructure projects in the Western Balkans are a potential cause for concern. in the EU. With some EU countries already accused of taking pro-China stances due to BRI projects, the EU may not want to risk adding other countries that could create further division on how to discuss Sino-European relations.

BRI and debt trap diplomacy

As mentioned above, China has faced repeated allegations of using the BRI to offer loans that it knows countries will not be able to repay. When countries eventually default on the loan, China often takes control of a key piece of a country’s infrastructure. Moreover, governments that incur debt to China via these supposedly predatory loans supposedly feel compelled to adopt a more pro-China stance. This strategy is known as debt trap diplomacy.

Although some experts believe that debt trap diplomacy is not real and is simply based on fear of China’s growing global influence, there are many examples of countries falling short on what ‘they consider unfair loans and countries with BRI projects hesitant to criticize Beijing.

Tanzanian President John Magufuli has called the loans his country has received for BRI projects “exploitative and clumsy”. Magufuli said the Chinese contractors working on the projects in Tanzania wanted to take the land and also be compensated for the project. Similarly, according to The Maritime Executive, Malaysian Prime Minister Mahathir Mohamad called the country’s $20 billion infrastructure deals with China “unequal treaties” and feared the projects would leave Malaysia indebted to China.

China’s use of the BRI to exert influence can also be seen in various European countries, including Austria. In Greece, for example, the Chinese shipping company Cosco has invested hundreds of millions of euros to renovate and develop the Greek port of Piraeus within the framework of the BRI. In 2008, Cosco acquired the rights to operate in the port, and eight years later bought the majority of shares in port operator, Piraeus Port Authority. Then, in 2017, Greece vetoed an EU attempt to condemn China’s human rights record at the United Nations.

Hungary has also seen significant investment from Chinese companies through the BRI, including €1.8 billion for the Budapest-Belgrade rail project. Like Greece, Hungary has been reluctant to criticize China and has prevented the EU from reaching the consensus needed to condemn China for alleged human rights abuses, including the torture of human rights lawyers. male. Hungary and Greece also opposed a common EU position on the South China Sea conflict in 2016.

Although Austria has not seen massive Chinese investment in infrastructure projects like Greece and Hungary, the Alpine republic has become very dependent on China for various technologies. A report by the European China Think Tank (ETNC) notes a particular reliance on China for digital technologies, especially 5G technology. Vindobona.org also recently drew attention to the legal, policy and infrastructural security gaps that exist in Austria with respect to its critical digital infrastructure and, in particular, with respect to its choice of 5G network providers. Despite concerns from other EU countries, the UK and the US over Chinese 5G technology, Austria, Hungary and Greece have pushed back on efforts to ban Huawei 5G in the EU.

While it is difficult to definitively prove that countries receiving Chinese investment projects feel compelled to adopt more pro-China policies, one can certainly see a correlation between the two. This correlation may prove problematic for EU enlargement in the Western Balkans due to China’s concerted efforts to invest heavily in infrastructure in these countries.

China and the Western Balkans

Over the past decade, China has stepped up its investment in the Western Balkans and strengthened its cooperation with these countries through China-CEE and the BRI. According to the Institute of Human Sciences in Vienna, there are currently more than 122 Chinese projects in the Western Balkans, worth around 30 billion euros.

With the exception of Kosovo, which China does not recognize as a country, all Western Balkan countries have negotiated agreements for infrastructure projects with China. The Balkan Investigative Reporting Network’s “China in the Balkans” project shows that Serbia is by far the largest recipient of Chinese investment, with 61 projects worth nearly 19 billion euros. These include projects such as the Belgrade Metro, the Mihajlo Pupin Bridge, the Budapest-Belgrade Railway and the environmentally harmful Kostolac mine.

The eight Albanian projects have an estimated value of nearly 650 million euros and include Tirana International Airport. North Macedonia has another 15 projects worth more than €650 million, Bosnia and Herzegovina has 29 projects worth almost €5.3 billion and Montenegro has 9 projects. a value of more than 2.4 billion euros. These numerous projects include airports, bridges, railways, mines and much more.

Notably, Montenegro has already experienced the type of predatory lending from China described above. The Bar-Boljare highway, which connects the port of Bar in the Adriatic Sea to Serbia, has deeply indebted Montenegro to China. According to the Institute for the Humanities, it is the most expensive highway in the world at $20 million per kilometer, and the first stretch alone costs $1 billion. As a result of this project, Montenegro’s sovereign debt skyrocketed to 103% of the country’s gross domestic product. The Montenegrin government even asked the EU to help refinance the loan, which the EU refused.

In addition to possible debt-trap diplomacy, there are also environmental and corruption concerns regarding Chinese infrastructure projects in the Western Balkans. For example, Serbia continues to build coal-fired power plants financed by China, which does not correspond to the EU’s climate and environmental objectives. Moreover, the lack of competition and transparency regarding contracts for projects increases the likelihood of corruption. In fact, former North Macedonian Prime Minister Nikola Gruevski and three ministers have been charged with bribery over the awarding of road contracts.

Considering the huge amount of money that China has invested in infrastructure projects in the Western Balkans and the fact that one of the projects has already made Montenegro heavily indebted to China, it is not unreasonable to imagine that some of the other loans will be nearly impossible for the country to repay.

Coupled with environmental and corruption concerns, this increased risk for Western Balkan countries of being subject to Beijing’s influence could ultimately undermine EU enlargement, as the EU is unlikely to want to deal with more. of member states, preventing a unified position on the increasingly important issues of EU-China relations.

Conclusion

The examples cited provide ample evidence of the adverse effects of China’s authoritarian global infrastructure strategy, including the critical digital infrastructure strategy, on the advancement of the European integration process.

The People’s Republic of China’s practices that promote corruption, support harmful business and investment practices, ignore and threaten data protection, intellectual property rights, human rights, cybersecurity, international law and other international standards of conduct must be opposed.

Just as Europe currently lives painfully with its dependence on Russian gas and oil, the maintenance of European autonomy in key technologies of the future, the defense industry, telecommunications infrastructure, AI and IoT is crucial for the development of the EU.

Fervent pro-European politicians have for some time questioned China’s role in national and intra-European development issues, citing concerns about respect for Western democratic values, human rights, protection data and cybersecurity.

European Commission

European Think Tank Network on China (ETNC)

Permanent Mission of China to the United Nations in Vienna

Vindobona.org

The Maritime Executive

Institute of Humanities (IWM)

International Institute for Strategic Studies

Balkan Investigative Reporting Network

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