China’s reach expands as Greece signs up to CEEC bloc
With Greece joining forces with the CEEC bloc, China is extending its influence in the economies of Europe that are keen to tap Chinese developmental prowess
17 Apr 2019 | Michael Marray

The tentacles of Chinese involvement in European economic affairs are spreading deeper and wider as new countries scramble to access Chinese largesse. This comes as Chinese Premier Li Keqiang attended the eighth leaders' meeting of China and Central and Eastern European Countries (CEEC) in Dubrovnik on April 12, and welcomed Greece as a new member.

The 16+1 has been regarded with hostility from Brussels, viewed as a forum through which China projects its influence not only into countries bordering the European Union (EU), but also as a vehicle to make inroads into the heart of the EU itself.

Greece will now become a full member, and will attend the ninth China-CEEC leaders' meeting in 2020, which will be held in China.

From an EU perspective, Greece signing up as a full member of this body will not be a welcome development. The country has had a fraught relationship within the EU over recent years, especially through its membership of the eurozone. A currency crisis during 2011-12 involving Greece nearly split the eurozone apart, and many commentators had feared for the long-term durability of the euro, with emergency measures needed to save the single currency.

However, some economists believe the measures only paper over the cracks, and unless structural economic reforms put the Greek economy on a firmer footing, another crisis is inevitable. However, the survival of the single currency is considered a sacred cow for many in the corridors of power in Brussels, so it is fair to say Greece could be considered a particularly sensitive EU member.     

Perhaps with political sensitivities in mind, both the summit host, Croatian Prime Minister Andrej Plenkovic, and Premier Li, went out of their way to stress the potential for cooperation between the EU and China.

“China-EU relations are now showing a good momentum,” Li said in his opening speech at the summit. “Not long ago, President Xi Jinping paid a successful visit to three European countries, lending fresh impetus to deepening China-EU comprehensive strategic partnership. Thanks to the joint efforts of all parties involved, 16+1 cooperation, as an important component of overall China-Europe relations, has steadily moved forward and evolved into an open and inclusive platform for cross-regional cooperation of mutual benefit.”

“It has played a positive role in boosting the economic growth of participating countries, improving their people's wellbeing and advancing China-Europe relations as a whole,” he added.

Prime Minister Plenkovic said in his opening speech, "Croatia believes the 16+1 Cooperation should be open and inclusive, and in this regard, we are glad that here in Dubrovnik we will be welcoming Greece to join us and to become the full member of the 16+1 family or – should I say – of the 17+1 family."

He added, “Since its inauguration, our cooperation has grown into an inseparable part of our bilateral cooperation with China and a valuable contribution to overall Europe–China and EU–China relations. The significance and scope of the 16+1 format is growing in all fields of cooperation, and the Government of Croatia fully supports it generating even more results-oriented projects I think we can all agree that China’s economic weight and growth is very important in helping the forward momentum of the global economy.”

“Croatia believes that the EU, the CEEC countries, China and the whole of Asia could benefit from more infrastructure links between China and us,” Plenkovic added.

He said, “For this reason, Croatia supports more intensive dialogue on the EU–China Connectivity Platform. We encourage all countries of the 16+1 Cooperation to work on expanding connectivity routes between China and Central and Eastern Europe. Connectivity will strengthen ties between businesses, increase trade and tourism as well as people-to-people contacts.”

During his visit to Croatia, Li visited the construction site of the Peljesac Bridge on the Peljesac Peninsula in the south of the country.

Li and Plenkovic symbolically pressed the start button for piling work to begin on the main pier of the bridge. The 2.4-kilometre Peljesac Bridge, which will stand 55 metres high, will connect the rest of Croatia with Dubrovnik-Neretva County. It will cross the Mali Ston Bay in the Adriatic Sea.

The road to Dubrovnik presently goes through the Neum Corridor, a piece of land which gives Bosnia and Herzegovina access to the sea, with all the inconvenience of border checkpoints at both ends.

In January 2018, a Chinese consortium led by China Road and Bridge Corporation (CRBC) won the bid for the first phase of the Peljesac Bridge and its access roads. The 36-month construction period began in the summer of 2018.

Brussels has expressed concern about Chinese involvement in infrastructure projects in Europe, both in EU member states such as Croatia, as well as neighbouring countries outside the EU. However, the EU is closely involved in the bridge project. The total value of the project is around 420 million euros (US$472 million), of which 85% is being covered by the EU funds.

Li pointedly said that the Peljesac Bridge project contract was won by a Chinese contractor through fair competition and public bidding, following market principles and abiding by EU rules, adding that the bridge is "a model of tripartite cooperation among China, Croatia and the EU”. Plenkovic also stressed that the bidding process was open, fair and transparent.

Austria, Belarus, the EU, Greece, Switzerland and the European Bank for Reconstruction and Development were present as observers at the Dubrovnik summit. 

The summit ended with the publication of the Dubrovnik Guidelines for Cooperation between China and Central and Eastern European Countries.

Among the points listed in the guidelines were:

-in the spirit of the Belt and Road Initiative and the EU Strategy on Connecting Europe and Asia, in compliance with international and European standards, the participants will continue to step up their cooperation with third countries to promote digital economy, efficient transport connectivity and smart, sustainable, safe and secure mobility. The aforementioned refers in particular to the Investment Plan for Europe, the Trans-European Transport Networks (TEN-T) and their extensions to the Western Balkans and relevant neighbourhood initiatives. The Participants will continue to contribute to the work under the EU-China Connectivity Platform and explore the integrated transportation corridors between China and Europe in order to make intermodal transport more accessible to potential users.

-the participants are willing to promote railway projects cooperation in line with respective laws and regulations and through consultations, in particular by strengthening exchanges and cooperation on railway planning, railway organization development, management, technology development, logistics and freight terminal construction, and related human resource management with the aim to enhance the use of modern, safe and environmentally friendly technologies.

-China and CEECs that are member states of the EU will cooperate within the structures of the EU-China Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters and of the EU-China Strategic Framework for Customs Cooperation. The cooperation in customs between China and CEECs will take place within the constraints of their respective competences. Participants will explore the possibilities of establishing a China-CEEC Customs Information Centre in Hungary.

-the participants will jointly explore utilization and construction of logistics hubs. They will promote pragmatic cooperation on railway transportation and intermodal transport solutions including customs, to strengthen two-way supply of goods by container block train services and other railway cargo services between Europe and China, and endeavour to shorten the time of transportation. China is welcome to participate in joint development of new freight lines in connecting markets in Asia and Europe, under the understanding that it respects the principles of transparency and non-discrimination.

-the participants emphasize the important role of China-CEEC Logistics Secretariat and the China-CEEC Coordinating Secretariat for Maritime Issues for facilitating trade flows between China and CEECs.

-the participants welcome China and CEECs in cooperating on relevant infrastructure investment projects. In view of the increasingly important role of railway in social and economic development, global environmental protection and cooperation, railway transport will be one of the focuses of cooperation.

-the participants welcome important progress made by China, Serbia and Hungary on the Belgrade-Budapest railway project and its possible extensions to the Adriatic Sea, the Black Sea and the Baltic Sea.