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China meets European leaders to discuss investment

China meets European leaders to discuss investment

China met with leaders from central and eastern Europe over the weekend as it looks to boost investment in the region.

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By Charles Bliss 09.07.2018

China met with leaders from central and eastern Europe over the weekend as it looks to boost investment in the region. Chinese Premier Li Keqiang reportedly wants to work more closely with countries in and outside of the EU with joint ventures in a range of industries, including tech, agriculture and tourism.

The trade war between China and the US has dominated the headlines in recent days, but Li Keqiang turned his focus elsewhere on Saturday as he visited the seventh annual “16+1 cooperation” summit. While there, he met and discussed investment opportunities with leaders and enterprises from 16 countries.

Eleven are EU member states, while another five are Balkan nations with desires to join the bloc in the coming years. The talks reportedly centered around projects that China is already funding in infrastructure, but the agenda will also touch on the possibility of working together in high-tech sectors and other industries, according to a statement made by the Bulgarian hosts.

Western Europe and Brussels are wary of the growing influence that China already has on the continent, and there are fears that the latest gathering is part of China’s agenda to push itself as a better option for funding and investment.

The country’s Belt and Road initiative, designed to “enhance regional connectivity and embrace a brighter future,” according to domestic policy, has been a primary development strategy for the Chinese government. However, many see it as a means of angling for a larger role in global affairs and a trading network centered around China.

“The meetings have prompted considerable speculation in Brussels and other European capitals that they are a Chinese effort to 'divide and rule' Europeans," noted a report published by the European Council on Foreign Relations (ECFR) in December last year. 

Li is aware that western nations may see the annual summit as a possible outlet for China to divide the bloc, but he downplayed these concerns on Friday. He said that the EU is an “important force” and that China wants to support integration and prosperity.

After meeting with Bulgarian Premier Boyko Borisov, Li said: “The 16+1 cooperation is by no means a geopolitical platform. Some may say that such cooperation may separate the EU, but this is not true. China supports European integration and a united EU because we understand that the EU is an important force for global prosperity and peace."

Borisov added that China does not want to compete with the EU and instead is hoping to complement EU aid. However, those present at the summit appear to be more cautious about the possibility of Chinese investment, as previous promises have yet to come to fruition.

China previously said that a USD $3bn investment and a credit line running up to USD $10bn were in the offing, but many European countries have yet to benefit, and there is a growing sense that enthusiasm is waning. ECFR researcher Francois Godement said on Thursday: "Eastern Europeans are disappointed [by] the actual level of investments... and lack of interest for the loans.” 

Skepticism is high in Romania and Poland following China’s decision to drop several high-profile projects in infrastructure and energy, while Serbia and Hungary now approach the summit with a less enthusiastic outlook, as they have only attracted small sums of investment.

China’s bid to woo eastern Europe comes a day after a full-blown trade war began with the US. The EU will be pleased to hear that Li may ease access to foreign markets as part of China’s retaliation against the US. Godement also said China is “sweet-talking to the EU”.

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