A 16+1 summit of the Central and Eastern European Countries and China took place today (27 November) in Budapest, hosted by the Hungarian Prime Minister Victor Orban. His Bulgarian colleague Boyko Borissov announced that next years’ summit will take place in Sofia.
The 16+1 format was conceived after the first China–Central and Eastern European Countries Economic and Trade Forum, which was also held in Budapest in 2011.
The countries included are China, 11 EU members: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, and 5 EU hopefuls: Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia. (Kosovo is missing, as a result of Serbia’s intransigence with its former province.)
In 2016, China Ocean Shipping Company (COSCO), a Chinese state-owned enterprise, acquired the majority stake in the Piraeus Port Authority. The Chinese government considers Greece’s’ Piraeus port as the main entry point for Chinese exports into the southern, eastern and central EU, as well as the key hub for seaborne transportation across and around the Mediterranean Sea.
Since then, the Chinese government obtained the key to influence the trade routes between China and the EU. The main corridor is Piraeus, but also the Chinese-funded upgrade of the Belgrade-Budapest railway.
The high-speed rail link between Belgrade and Budapest is expected to cost €3.2 billion. China, Serbia and Hungary signed a memorandum of understanding for the reconstruction of the 370-kilometre rail route in December 2014. The deal has created tensions with the EU, as Union procurement rules have not been respected.
China’s is focusing on Greece and Serbia, but also other countries in the Western Balkans, who are benefitting from low-interest Chinese loans for infrastructure projects
Diplomats said that Chinese involvement in the Western Balkans was “provoking second thoughts in northern Europe and especially in Brussels”.
Big ports of the north like Rotterdam, like Hamburg, could end up losing a lot of the trade volume, because of the new projects in the South.
The Commission officially downplays the geopolitical stake. Bulgaria has been so far circumvented from the Chinese corridor.
This didn’t prevent Borissov from jumping on the bandwagon. He announced that the next 16+1 summit will be hosted by Bulgaria. Usually these summits take place by the end of the year, which means the event would not coincide with the Bulgarian EU presidency.
“We have a rare chance of combining two huge economic powers – the EU and China with their initiatives. This will enable us to advance on many projects. The more projects we realize, the more the region will be prosperous and competitive”, he said, as quoted by the governmental press service.
Chinese Premier Li Keqiang appealed for integrating the Chinese ‘Belt and road’ initiative with the EU strategies with Central and Eastern Europe and the Western Balkans. He also conveyed the message that more efforts were needed to accelerate the building of the Hungary-Serbia high-speed railways.
Li announced the establishment of China-CEEC Inter-Bank Association and more financing under the China-Central and Eastern Europe Investment Cooperation Fund.
Orban paid compliments to China and said countries from the region would take this opportunity for development, in line with the spirit of equal treatment and mutual respect.
The Hungarian PM also said the CEEC countries would actively participate in the ‘Belt and Road’ initiative and create better environment for Chinese companies investing and developing in the region.
Hungary’s foreign minister Peter Szijjarto has said the country plans to invest 550 billion forints (€1.77 billion euro) in the overhaul of the 152 km-long Hungarian stretch of the Belgrade-Budapest railway line. Reportedly, the Hungarian economy ministry has agreed on a 20-year loan from Export-Import Bank of China (EXIM Bank) with an interest rate of 2.5%, which will cover up to 86% of the project cost.