Empty shell no more: China’s growing footprint in Central and Eastern Europe POLICY PAPER IVANA KARÁSKOVÁ, ALICJA BACHULSKA, ÁGNES SZUNOMÁR, STEFAN VLADISAVLJEV, UNA ALEKSANDRA BĒRZIŅA-ČERENKOVA, KONSTANTINAS ANDRIJAUSKAS, LIISI KARINDI, ANDREA LEONTE, NINA PEJIĆ, FILIP ŠEBOK Empty shell no more: China’s growing footprint in Central and Eastern Europe POLICY PAPER IVANA KARÁSKOVÁ, ALICJA BACHULSKA, ÁGNES SZUNOMÁR, STEFAN VLADISAVLJEV, UNA ALEKSANDRA BĒRZIŅA-ČERENKOVA, KONSTANTINAS ANDRIJAUSKAS, LIISI KARINDI, ANDREA LEONTE, NINA PEJIĆ, FILIP ŠEBOK EMPTY SHELL NO MORE: CHINA’S GROWING FOOTPRINT IN CENTRAL AND EASTERN EUROPE Policy paper March 2020 Editor – Ivana Karásková Authors – Konstantinas Andrijauskas, Alicja Bachulska, Una Aleksandra Bērziņa-Čerenkova, Ivana Karásková, Liisi Karindi, Andrea Leonte, Nina Pejić, Ágnes Szunomár, Filip Šebok, Stefan Vladisavljev Citation – Karásková, I., Bachulska, A., Szunomár, A., Vladisavljev, S. (eds.) (2020). Empty shell no more: China’s growing footprint in Central and Eastern Europe. Prague, Czech Republic, Association for International Affairs (AMO). Handbook for stakeholders – To access the handbook for stakeholders stemming from this report, please refer to the electronic version which can be found online at www.chinaobservers.eu. The publication was prepared within the China Observers in Central and Eastern Europe (CHOICE) collaborative platform. CHOICE monitors and evaluates the rising influence of the People’s Republic of China in countries of Central and Eastern Europe which participate in the China-proposed 17+1 initiative. CHOICE strives to build a multinational platform for open discussion, experience-sharing and critical assessment. CHOICE is run by the Association for International Affairs (AMO), a Prague-based foreign policy think tank and NGO. The preparation of this paper was supported by a grant from National Endowment for Democracy (NED). Typesetting – Zdeňka Plocrová Print – Vydavatelství KUFR, s.r.o. – tiskárna ASSOCIATION FOR INTERNATIONAL AFFAIRS (AMO) Žitná 27/608 CZ 110 00 Praha 1 Tel.: +420 224 813 460 [email protected] www.amo.cz © AMO 2020 ISBN 978-80-87092-72-9 (print version) ISBN 978-80-87092-71-2 (pdf version) Table of Contents Summary 7 Recommendations 9 Engaging China in 17+1: Outline of ACT strategy 11 1. Political relations: Beyond proclamations 14 Bilateral relations: Different trajectories 18 Let’s party, comrades: Local political parties’ relations with CCP 23 Sub-national, underestimated? A booming component of 17+1 cooperation 26 Cutting-edge, or driving a wedge: Is 17+1 dividing Europe? 30 China in CEE politics: Conclusion and recommendations 32 2. Economic relations: A sugar cane, or a sugar-coated stick? 35 Not so special: Modest impact of 17+1 on trade relations 35 We are the champions: V4 countries and China’s foreign direct investments 42 All roads lead to China: Cooperation in infrastructure and connectivity 47 Follow the money: Financial cooperation in V4 51 The irresistible draw: China-CEE tourism as a success story 53 The economy of pros and cons: Conclusion and recommendations 55 3. We the people? The challenges of societal relations with China 57 Don’t trust anyone under thirty: Youth cooperation and its perils 64 Collective sports? Support for China before the 2022 Olympics 66 Natural remedy? The curious case of traditional Chinese medicine as an export commodity 68 The fourth estate and a new global power: Telling the China story 69 People-to-People’s Republic relations: Conclusion and recommendations 71 Authors 73 About CHOICE 75 About AMO 77 Footnotes 79 Summary → The 17+1 platform has been characterized by a hub and labeled as an ‘empty shell’ with spokes logic of cooperation the assertion that cooperation with China taking the lead in between Central and Eastern ‘multilateral bilateralism’. Europe with China lacks substance. A large-scale audit → Despite its efforts, China has not of relations, however, points transplanted its foreign policy to a more complex scenario. concepts into the language Relations between China and of cooperation with Central Central and Eastern Europe are and Eastern Europe. On the growing, encompassing political, contrary, the CEE countries economic and societal domains have successfully shaped the and are loaded with action. diplomatic language to stay in accordance with the EU → The fragmented nature of framework. 17+1 cooperation the information complicates has almost universally led to understanding of the real nature the growth of high-level political of 17+1, as in individual states contacts between the CEE China’s actions seem scarce countries and China. However, and random. Also the areas the development of bilateral of interaction are treated as relationships happens on separate separate. It is only when the trajectories. It is the activity and whole picture is analyzed that decisions taken by the individual the progress and direction of the 17 CEE countries rather than the 17+1 platform become evident. format itself which shape the level of engagement. → In the past eight years, China has managed to build a system → While Hungary and Serbia have of interconnected relations in supported China on political Central and Eastern Europe issues, they represent an (CEE), where it was almost exception rather than the rule. The growing footprint in Central and Eastern Europe absent before. Paradoxically, assumptions that CEE as a whole China has contributed to has become more forthcoming the conceptualization and towards China on political issues institutionalization of CEE as is not supported by the evidence. a region. → China has used the CEE as → Resembling a version of a testing ground for more activist US alliances in East Asia, party diplomacy led by the the 17+1 framework can be Chinese Communist Party. shellEmpty no more: China’s 7 China cultivates relationships with → Chinese FDI are modest and important political elites to assure concentrated in a few countries a long-term pro-China inclination (Hungary, Czechia and Poland) in the respective countries. with almost no opportunity for other countries to receive sizable → China has unsuccessfully tried amounts of investment. Although to assuage the EU’s concerns financial cooperation has gained about using the format to divide momentum, it is limited to EU Europe. The US-China rivalry has member states. become a factor in CEE relations with China, with several countries → Tourism is the real success story of afraid of endangering their economic cooperation within the traditional ties with Washington. framework, since CEE countries China has tried to walk a fine line have achieved higher visibility in in its approach towards Russia in China (while a general increase CEE. in the amount of Chinese middle class travelers may also play → Economic cooperation in 17+1 is a role). mainly driven by China as it sets the agenda. → Given the character of the Chinese system and the high level → China’s economic impact on of penetration of Chinese society CEE countries is still small. CEE by the state, people-to-people countries are highly dependent contacts actually mean Chinese on both trade and investment government-to-people in relations relations with developed, mainly with CEE countries. EU member states, while China represents a minor yet increasing → The number of Confucius Institutes share. The CEE region is also has increased in CEE countries. far from being among the most Youth cooperation is also on the important partners for China. rise, with increased numbers of Chinese government scholarships → Despite the 17+1 format, China issued to CEE students. still handles its economic affairs on a bilateral basis. Relations → Politically motivated programs with the countries of the Visegrád targeting youth and political region and Serbia are of particular leaders, such as Bridge for the growing footprint in Central and Eastern Europe importance, while relations with Future, China-CEE Young Political other CEE countries lag behind. Leaders Forum and Political Parties Dialogue, go largely → Trade relations remain relatively unnoticed in all 17 CEE countries. limited and unbalanced, leading to an increased trade deficit in all 17 CEE countries with China. Empty shellEmpty no more: China’s 8 Recommendations → The 17+1 format should not be to take advantage of the lower discarded. The simplistic view of profile of local contacts to avoid Europe being divided by China attention. through 17+1 should be opposed as it infantilizes the CEE states and → The increased prominence of the denies CEE countries their agency. Chinese Communist Party (CCP) 17 CEE countries should adopt in China’s approach towards the the ACT strategy proposed in this CEE warrants vigilance. There paper in their dealings with China. should be greater scrutiny by the civil society and media towards → The EU needs to continue nontransparent dealings between including CEE EU members in the local parties and the CCP. efforts to shape a common EU policy towards China that should → In order to benefit more from represent the interests of all economic cooperation with China, member states. CEE countries should act together. Regular 17+0 consultation meetings → The EU should open a clear path to should precede summits. membership to the Western Balkan countries to offset the growth of → The major challenges of trade China’s political influence. The relations, such as trade deficit, EU must play a more active role cannot be overcome by single in the Western Balkan’s economic country solutions; CEE countries development. should follow the EU’s strategic aims in trade policy. → The 17 countries should improve their communication and → Coordinated rules should be coordination in feasible areas to established relating to investment shift the 17+1 into a multilateral screening also in non-EU member forum serving primarily their states. interests. growing footprint in Central and Eastern Europe → Independent, fact-based media → More attention should be given coverage is needed in order to to the sub-national (regional, achieve greater transparency and provincial, etc.) dimension of understanding of mechanisms China-CEE cooperation that has behind societal cooperation largely developed under the radar.