BELGRADE, Serbia (AP) — In an attempt to secure business ties and increase political influence, China has launched a charm offensive in eastern Europe — where the European Union and Russia are also vying for sway.
Chinese Prime Minister Li Keqiang, accompanied by 200 corporate executives, met the leaders of 16 central and eastern European countries Tuesday for a two-day summit being billed in China as an opportunity to deepen ties to the region and boost relations with the EU.
The Asian economic power is interested in energy, infrastructure and other big projects to fuel its economy at a time when labor costs are rising at home, risking crimping its exports, its traditional economic strength. Chinese investors hope to boost their presence in the region where Western companies may be reluctant to take financial risks.
Li said that closer ties would bring massive Chinese investments and open up large Chinese markets for central and eastern European goods. He sought to alleviate fears voiced from some in the EU that China's regional deals could contravene the 28-nation bloc's strict financial and trade rules.
"Everything will be conducted in accordance with the policies that are valid in the European Union," Li said at the opening of the meeting. "China supports the European Union, EU integration processes and a strong euro.”
The timing of the China summit — the third such in three years — is significant as it comes while Russia, the traditional regional powerbroker, is struggling with deep economic problems partly caused by crippling Western sanctions over Moscow's role in Ukraine.
Only a few weeks ago, Russian President Vladimir Putin announced that Moscow is spiking a multibillion-dollar gas pipeline project for southern Europe that was to pass through several east European countries, which was to bring them hundreds of millions of dollars in transit fees.
Putin argued that the EU's opposition to the South Stream pipeline — which would have run under the Black Sea to Bulgaria, Serbia, Hungary and further on to Europe — meant Russia had no other choice but to scrap it.
The 16 European countries at the summit all share a former communist past. Some, like Bulgaria, Romania, Poland and Hungary, are part of the EU. Others, like Serbia and Bosnia, would like to join, but are still influenced by Russia.
"The difference between the Russian and Chinese approach in the region is that Russians are more political, while Chinese are more commercial," said Serbian economy analyst Miroslav Prokopijevic.
Unlike Moscow, which is applying a combination of economic and political pressure on the regional governments, Beijing sees its increased economic influence in the area as a chance to boost ties with the EU.
With western Europe struggling with economic stagnation and the Russian economy collapsing, some of the eastern European countries have been looking to China for commercial deals.
In the first 10 months of 2014, bilateral trade between China and central and eastern European countries reached $50 billion, up 10 percent from the same ten months of last year, with the pace of growth accelerating, according to the Chinese Ministry of Commerce.
A number of Chinese banks have set up branches in the region and the first $500 million phase of the China-Central and Eastern European Cooperation Fund — totaling $10 billion in offered loans — has been deployed successfully, it said.
The Chinese will establish a corridor that will allow parts made in China be assembled in east Europe. Assembly is low-wage stuff, but specialty parts are where the money is at. This is how Japan did it. China knows EE is desperate for investment, and land will be cheap for Europe, the promised land for most Chinese. This si also for Europe in that EE will get some badly needed investment, jobs, and unlike in the US there won't be millions of Chinese streaming across the border or stashed in 16-wheelers.
Half of the people in Hong Kong live in attractive public housing. They don't know how good they have it.
USA is busy at war in all fronts, this open the doors for Chinese. Soon there is no place for US to hang its hat (a Mafia term)
China is acting educated and in great statesman-like form. They are stepping up to the role which needs to be filled by someone(LOL - USA?).
Instead of creating wars, China is offering investment to infrastructure.
About time someone figured out how to do this without destroying something.
We can build upon even minor success, much easier than to build upon failure.
Why is it that civilization has not learned - you do not have to tear something down in order to build it again.
Good move for both sides. Lots of jealousy and hate from the losers still stuck in the sewers.
When you want product you turn to the least expensive option and it's presently CHINA. They put out goods that folks want at reasonable prices, however with the caveat of BUYER BEWARE. Often and sadly that low price also means POOR QUALITY and YOU GET WHAT YOU PAY FOR. Since most of the world is still in consumption mode China will continue to prosper as they are often the ONLY source for certain things. Sadly, the US doesn't see opportunity at this juncture and isn't ramping up it's potential capacity to produce consumables beyond Chemicals, Drugs, Heavy Eqpt, Planes (most of which we don't use in our every day lives). Were it only that the wonder kids in DC realize that we need to make TV's, small appliances, etc and actually COMPETE w/the Chinese instead of CONCEDING markets to them because they can do some things for LESS. LESS doesn't always equate to MORE! PEACE!
Steve In Little Rock
Different approaches to trying to win influence in the area. Russia uses the threat of military power and China comes in with money to invest and pushes for increased trade (which to the Chinese means selling their stuff to new markets). The first heavy handed approach creates resentment, military battles and sanctions, the second "sneakier" method wins friends for China.
It may be a "backyard" issue - the Chinese are fairly heavy handed in their own backyards, just like the Russians are in eastern Europe.