China enhances co-operation with the Balkans and Central Europe

China enhances co-operation with the Balkans and Central Europe

By Nikos Fragopoulos of Skopje News

The summit of 16 + 1 countries of Central and Eastern Europe and China was held on Monday (November 27) in Budapest, hosted by the Hungarian Prime Minister, Victor Orbán. His Bulgarian counterpart, Boiko Borisov, announced that the summit next year will take place in Sofia.

The 16 + 1 form was designed after the first economic and trade forum of the Central countries and Eastern Europe, which took place in Budapest in 2011.

The countries included are China, 11 EU member states: Bulgaria, Croatia, The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia and five accession countries: Albania, Bosnia and Herzegovina, fYROMacedonia, Montenegro and Serbia. (Kosovo was absent because of the difference between Serbia and its former province).

In 2016, the China Ocean Shipping Company (COSCO) acquired the majority share of the Port Authority of Piraeus. The Chinese government considers the port of Piraeus the main point of entry for Chinese exports to the southern, eastern and central EU, as well as the key to maritime transport across the Mediterranean Sea.

Since then, the Chinese government has acquired the key to influence the trade routes between China and the EU. The main corridor is Piraeus, together with the Beijing-funded Belgrade-Budapest railway line.

The high-speed rail link between Belgrade and Budapest is expected to cost EUR 3.2 billion. China, Serbia and Hungary signed a Memorandum of Understanding, in December 2014, for the reconstruction of the 370 km long rail route. This agreement has created tensions with the EU however, as European as it did not comply with european rules for public contracts.

China focuses on Greece and Serbia, but also on other Western Balkan countries that benefit from low-interest Chinese loans for infrastructure projects.

For their part, diplomats say China’s involvement in the Western Balkans “has caused second thoughts in northern Europe and especially in Brussels”.

The major ports of the North, such as Rotterdam and Hamburg, could lose large volume of trade due to these new projects to the South.

“We have a rare opportunity to combine two huge economic powers – the EU and China with their initiatives. This will allow us to proceed with many projects. The more projects are being implemented, the more the region will be prosperous and competitive”, said the Prime Minister of Bulgaria.

On his part, Chinese Prime Minister Li Keqiang stressed the need for intensification of efforts that would accelerate the construction of the Hungary-Serbia high-speed railways.

Li announced the establishment of a bilateral banking union between China and the Central and Eastern Europe, as well as more funding under the China – Central and Eastern Europe Fund.

For his part, Orban praised China, stressing that the countries in the region would take advantage of this opportunity for development in accordance with the spirit of equal treatment and mutual respect.

At the same wavelength, Hungary’s Foreign Minister, Peter Szijjarto, said that the country plans to invest EUR 1.77 billion to restructure the ​​152 km long Belgrade-Budapest railway line.

According to information, Hungary’s economy ministry agreed on a 20-year loan from the Export-Import Bank of China (EXIM Bank) with an interest rate of 2,5%, which will cover up to 86% of the cost of the project./IBNA