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How China continues to lose friends in Central and Eastern Europe

November 4, 2022 China Events & Announcements

A growing number of Central and Eastern European countries are moving away from China as Beijing continues to maintain close ties with Russia despite Moscow’s brutal invasion of Ukraine.

China is facing a strong backlash from countries in the region as it has refused to denounce the aggression. Beijing’s reluctance to condemn the invasion has hit a nerve among countries that have historically suffered from Moscow’s severe political suppression and geopolitical ambitions.

In the early 2010s, Central and Eastern European countries gravitated toward China, a fast-growing economic powerhouse with plenty of money to invest overseas. But the region’s love affair with China has turned into a bitter disappointment. Their deepening disillusionment with Beijing could prompt the European Union to take an even tougher stance toward China.

In 2012, China and 16 countries in Central and Eastern Europe established the “16 plus one” economic cooperation initiative. Most countries in the region, including Poland, Hungary and Romania, joined the group. Greece became a member in 2019, making it “17 plus one.”

China has been organizing annual summits among group members almost every year, with hopes of winning over these countries through infrastructure investment and technological cooperation. This framework has made some Western European countries like Germany and France uneasy about a possible division within the EU. Berlin and Paris have urged Central and Eastern European nations not to get too deeply involved.

But the region’s goodwill toward China is fast disappearing. The first sign of change came in May 2021, when Lithuania withdrew from the group to distance itself from China. In August 2022, Latvia and Estonia followed suit, reducing the number of European members to 14.

The Czech Republic may be next. In mid-May, the foreign affairs committee of the country’s Parliament adopted a resolution calling on the government to withdraw from the group.

The moves have been prompted by Russia’s invasion of Ukraine, which started on Feb. 24. Countries in Central and Eastern Europe have been wary of the threat posed by Moscow’s expansionist policy. They are still haunted by memories of subjugation at the hands of the Soviet Union during the Cold War era. Beijing’s continued friendly ties with Russian President Vladimir Putin have thus infuriated many in those nations.

“Many countries in Central and Eastern Europe have growing resentment and distrust against China because Beijing maintains close relations with Russia, even after its invasion of Ukraine,” said Jakub Jakobowski, senior fellow at Poland’s Center for Eastern Studies.

“Through a painful experience during the Soviet era, most of the countries in this region have a strong allergy to the Communist Party system and have bad feelings about China’s political system. The trend of the region distancing itself from China will not stop,” he said.

Alarmed, the Chinese administration of President Xi Jinping sent a special envoy to eight major countries in Central and Eastern Europe in April and May to explain its position on the Ukraine crisis.

But the envoy appears to have received a cool reception in most countries, especially Poland. When the envoy visited Warsaw, top Polish foreign ministry officials, including the foreign minister, refused to meet the diplomat, according to local diplomatic sources.

Poland has a long history of being threatened by Russia. It was invaded by both the Soviet Union and Germany during World War II. This history has made Warsaw especially indignant about China’s stance toward Russia.

Growing anti-China feelings in the region are beginning to hurt economic exchanges between the two sides. The Romanian government has decided to impose strict restrictions on infrastructure investment by Chinese businesses, according to local media. In 2020, the country froze a joint project to build a nuclear power plant with a Chinese company and struck a new deal with a U.S. business.

Central and Eastern Europe’s enthusiasm for Chinese investment had begun to ebb even before the Russian invasion. Beijing’s talk about expanding investment in the region has turned out to be mostly hot air.

Central and Eastern Europe received only about 3% of China’s overall direct investment in Europe in 2020, according to the Mercator Institute for China Studies, a German think tank. Moreover, the lion’s share of the money went to major countries in the region, such as Hungary and Poland, with smaller nations benefiting little.

A visit to Central and Eastern Europe in the spring of 2018 revealed a widespread and palpable sense of disappointment about the broken promise of large Chinese investment. An economist in the Czech Republic, for instance, said China had made little investment in the country’s manufacturing sector. “China accounts for only 1% of our overall exports,” the economist said.

Another factor driving the region away from China is the increasingly acrimonious relationship between Beijing and Washington.

U.S. President Donald Trump, who assumed office in 2017, urged Central and Eastern Europe to support the country’s efforts to exclude Chinese technologies from strategic high-tech areas. Given that close cooperation with the U.S. remains important, Poland, the Czech Republic, Romania and Estonia decided in 2019 and 2020 to ban China’s Huawei Technologies from their 5G networks.

Some countries in the region still seem eager to maintain ties with China, including Hungary and Serbia, the latter a non-EU country. But they are exceptions.

This trend, if it continues, will have significant impact on the global strategic landscape.

First, the region’s stance toward China is bound to influence all European policy toward Beijing. “The tougher stance of Central and Eastern Europe toward China will push the EU’s overall China policy toward a tougher direction,” said Jakobowski.

Second, the region’s move would remind Beijing of the cost of maintaining friendly ties with the Kremlin in terms of smooth diplomacy.

The food crisis triggered by Russia’s invasion has dealt a severe blow to many countries in Africa and the Middle East. If Beijing continues to side with Russia on the war, it could provoke a wave of anger among these nations, causing a sharp drop in friendly faces in those regions as well.

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