The “16+1” Becomes the “17+1”: Greece Joins China’s Dwindling Cooperation Framework in Central and Eastern Europe

Publication: China Brief Volume: 19 Issue: 10

Greek Prime Minister Alexis Tsipras speaking at the CEEC-China (“16+1”) Summit in Dubrovnik, Croatia, April 12, 2019. (Source: Greek PM Press Office)

Introduction: China’s (Junior) European Partners in the “16+1”

On the heels of People’s Republic of China (PRC) President Xi Jinping’s busy bilateral tour in Western Europe in March, PRC Premier Li Keqiang started his own multilateral tour in Eastern Europe in April. Designed primarily to visit Beijing’s established partners in European Union (EU) central institutions (EU-China Joint Statement, April 9), Li’s visit nonetheless touched upon a side project of no marginal importance for the larger Belt and Road Initiative (BRI): the “16+1” framework of cooperation with countries in Central and Eastern Europe (CEE). [1] Thus, on April 11 and 12, participants met in the Croatian town of Dubrovnik for the framework’s 8th Summit, as well as for its 9th Business Forum (Agenda of  8th Summit of Central and Eastern European Countries & China – 9th Business Forum of CEEC & China, April 11-12).

Perhaps not coincidentally, the same venue witnessed the advent of the “Three Seas Initiative” in 2016, a sub-regional project meant to increase integration of EU countries in the area—an event in which the PRC took part as an observer (with Assistant Foreign Minister Liu Haixing in attendance). [2] The symbolic value of this place—which was chosen instead of the more convenient Croatian capital—offers a glimpse into Beijing’s intentions in the area: a strand of economic and diplomatic engagement that runs parallel to European integration, without explicitly doubling or challenging it. Thus, the PRC seeks influence in Europe when encountering little or no resistance—seeking to fill an opening when available, but without confronting established players head-on. [3]

Business (Not) as Usual: A Changing Landscape in CEE

In regard to the 16+1 format, circumstances have changed since the last annual summit in Sofia. The players’ relative positions, and the playing field itself, have both changed. While some major European capitals have shifted their approaches towards China in a more accommodating direction (AGI, March 23; Memorandum d’intesa March 23; China Brief, April 24), central EU institutions have voiced increasing reservations about cooperation with the PRC. In this sense, by designating China as a “systemic rival” (European Commission & HR/VP, March 12), they have displayed intentions to deal with Beijing in a coherent and unitary manner—thereby explicitly leaving a reduced space for developing the 16+1 format as an eccentric offshoot of broader EU-China cooperation efforts.

Confronted with these developments for some time now, some CEE states that are members of the European Union (and close partners of the United States) have started to pursue a path of inertial participation—or outright disengagement—from the 16+1 format. Poland, the Czech Republic (China Brief, February 15), Romania, and the Baltic states are at the forefront of this strategic shift, leaving Hungary and the more China-dependent Balkan states to keep the 16+1 format afloat. This development can be explained by a variety of both economic and strategic-political factors.

In the first sense, many CEE countries that are strongly reliant on the United States for their security have taken notice of the U.S. Secretary of State’s hinted warnings regarding close cooperation with China. In his own recent Central European tour, Mr. Pompeo made clear reference to Beijing’s growing influence in the area—especially in the sensitive telecom sector (Radio Free Europe/Radio Liberty, February 11; U.S. Department of State, February 10). Against the background of increasing competition between global players such as the PRC, the United States, and the European Union, Mr. Pompeo seemed to provide implicit warnings about carefully choosing long-term friends.

Economic considerations also play an important role in this equation. The dearth of Chinese greenfield and infrastructural foreign direct investment in Europe—doubled by a worsening trade balance in almost all CEE countries—prompted some CEE countries to abandon (or at least put on hold) many joint projects with China, pending the opportunity to extract more benefits from available EU funding sources. Attracting such EU financing might present itself as a lower-risk opportunity both commercially and strategically. For these reasons, right until the Dubrovnik summit, the 16+1 format maintained the appearance of a watered-down mode of cooperation, reluctantly surviving from one year to the next—and merely parading some landmark projects, such as the Serbian-Hungarian railway. [4] The 16+1 format appeared to be stuck in  institutional and economic limbo, until China decided to give it a strategic push in early 2019.

A Capricious Enlargement Mechanism: Who Runs the 17+1 Show?

Enter Greece, the financially troubled member of the EU’s southern flank. For the first time since the early beginning of the 16+1 format in 2011-2012, a new member was considered for acceptance. The 2019 Dubrovnik summit saw the first “enlargement” of the cooperation pattern, explicitly transforming it into a “17+1” platform (CGTN, April 13; SCMP, April 12). However, this sub-regional economic community places a great emphasis on the leading role of China within the initiative—showing that the “+1” part is the one that really matters in considering the initiative’s future course.

Greece’s entry was a one-on-one negotiation that primarily involved Athens and Beijing, at the initiative of Greek Premier Alexis Tsipras. Only later were the opinions of the 16 other participants taken into consideration. The joint understanding of the Greek and Chinese governments was subsequently presented to the 16 European members for the purpose of notification and consultation—but in reality, Beijing’s acceptance was the decisive factor in allowing the Hellenic Republic to join the format. [5] Unlike other prospective members—such as Austria between the Belgrade and Suzhou summits, or the Republic of Moldova in an earlier period—Greece has been welcomed as a full member of the initiative. This was done without offering any explanation, or an intelligible blueprint for further admissions into the club, which has raised an additional layer of opacity upon the quasi-institutional mechanisms of the initiative. As was intended from the beginning, China is actually running the 16+1 (now 17+1) show.

(Regional) Deus Ex Machina: Greece as a Putative Game-Changer

Beyond the procedural issues regarding Greece’s admission to the platform, other questions remain unanswered. First, the rationales of both Greece and the PRC should be considered. Some analysts have argued that an insistence on showing that Athens is doing well abroad might be the root for Premier Tsipras’ step towards the initiative. The accomplishment of joining the format—already signaled as a prospect at the 2018 Sofia summit—might well aid him in domestic political struggles, and offer the glimpse of a renewed Greek presence on the international scene in the aftermath of the Prespa agreement. [6]

While this interpretation of the event has some merits, Greece also has a set of regional reasons for adhering to the cooperation platform. More precisely, it has long been feeling left behind by developments in the Balkan region, a traditional sphere of influence for Athens. Not only the 16+1, but also the Three Seas Initiative and the renewed impetus for pushing EU enlargement, have proceeded without paying much attention to Hellenic sensibilities or influence—thereby allowing other players to build their positions in the region. This was especially relevant in the context of seeing the BRI building up a foothold in the Balkans, and devising new corridors of communication and transport toward the European core. Finally, for Greece a closer relationship with Beijing offers the possibility of broader benefits, potentially linking up the China Ocean Shipping Company (COSCO)’s investments in the port of Piraeus with a network of other infrastructure projects in the region (National Herald, February 4).

For its part, China’s motives for integrating Greece into its CEE “roadshow” have symbolic and political underpinnings. The dwindling functionality of 16+1 and the increasing reluctance of some key members (such as Poland, Romania and the Czech Republic) to fully commit to the initiative required the introduction of a new element to dispel the diplomatic inertia. This made Greece the perfect candidate for membership: although it had waited on the sidelines since the Sofia summit of 2018, it was welcomed aboard at Dubrovnik, allowing China to capitalize on the alleged attractiveness of the platform and its rediscovered dynamism.

Furthermore, Greece, as a compliant partner, was a natural choice for Beijing. Greece had previously aligned with PRC interests in other contexts: for example, blocking an EU statement on human rights in China at the United Nations (Kathimerini, June 18, 2017). Greece has also allowed Beijing to tell the world how its diplomatic efforts to reconcile Greece with its North Macedonian neighbor paid off in regional terms, thereby boosting the PRC’s regional standing (CGTN, April 14).

Conclusions: The Show Must Go On

Bringing new life into the static 16+1 project was a politically desirable outcome for the China. PRC prestige was at stake, as the management of the relationship with 16 minor European states served as a litmus test for its plans with the wider European Union. Thus, the 16+1 format could not be left to fall into obsolescence, or to maintain a merely inertial existence. On the background of its economic confrontation with the United States and a growing reticence about the BRI throughout Eurasia, China needed a success story in Europe.

That is why the PRC intends to boost the new 17+1 Format with new operational capabilities, more dynamic meetings, and the build-up of a Beijing-driven “coalition of the willing” within the functional limits of the platform. Beijing plans to present Greece as an example as to how China’s multilateral initiative is both attractive, and breaks the confined cultural-historical limits of the CEE cooperation format. Unlike other members, Greece is neither a post-Communist state, nor a new or prospective member of the European Union—but rather, a consolidated capitalist democracy whose economic relations with China gained steam in the last decade.

In addition, the Dubrovnik Guidelines (The Dubrovnik Guidelines for Cooperation between China and Central and Eastern European Countries, April 12) put a strong emphasis on the platform’s success so far, while signaling a more hands-on approach from China—which has proposed that the next summit  take place within its home territory. When considering the static atmosphere of recent years’ meetings, and the geopolitical necessity to display at least symbolic progress, it appears that China is (re)taking over the reins of the project, and guiding it towards objectives intended to prop up the BRI in Central and Eastern Europe.. This latter point is mentioned in the Guidelines, as well as in Premier Li Keqiang’s speech from Dubrovnik (Xinhua, April 12)—thereby offering a glimpse in Beijing’s larger design for the revived 17+1 Format.

Another notable point of the 2019 Dubrovnik summit is that the initiative is now open for new entrants. Austria, Belarus, and the Republic of Moldova—to name just a few countries who have already expressed an interest—have not been explicitly mentioned, but have been designated under the general terms of “some other countries [that] also seek to join the group” (PRC State Council, April 14). Thus, irrespective of the fact that Greece’s joining the platform might eventually turn out to be primarily a strategic public relations move and a distraction from the inertial nature of the format, Beijing clearly sends the message that the show goes on—and so it does.

Horia Ciurtin is Associate Expert for New Strategy Center (Bucharest, Romania), Research Fellow for the European Federation for Investment Law and Arbitration (Brussels, Belgium), as well as External PhD Researcher at the Amsterdam Center for International Law (Amsterdam, Netherlands). He also serves as a legal consultant in the field of international investment law throughout the Balkans and CEE. He recently published the study entitled “A New Era in Cross-Strait Relations? A Post-Sovereign Enquiry in Taiwan’s Investment Treaty System”, in Julien Chaisse (ed.), China’s Investment Three-Prong Strategy: The Bilateral, Regional, and Global Tracks, Oxford University Press, forthcoming 2019. Contact him at [email protected]

Notes

[1] The sixteen member nations of the “16+1 Initiative” are: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia.

[2] In this sense, see the Policy Paper prepared by Kamil Całus, Horia Ciurtin, Gheorghe Magheru (authors) & Izel Selim (editor), “The Emergence of a European Project. Three Summits for the Three Seas Initiatives”, New Strategy Center & OSW (Centre for Eastern Studies), June 2018, https://www.newstrategycenter.ro/wp-content/uploads/2018/06/NSC_OSW_3SI_policy_paper.pdf

[3] Bruno Maçães, Belt and Road: A Chinese World Order (Hurst 2018), p. 6.

[4] For more details and a comprehensive analysis of this project see Matt Ferchen, “Hungary-Serbia Railway Case Study and International Comparisons”, contained in the report “Assessing China’s Influence in Europe through Investments in Technology and Infrastructure. Four Cases”, Leiden Asia Centre, December 2018, http://leidenasiacentre.nl/wp-content/uploads/2018/12/Influence-in-Europe-through-Investments-and-Technology-anf-infra.pdf.

[5] Author’s interviews with CEE-based experts on international affairs, Bucharest, April 22.

[6] See the report of the Athens-based specialist in China affairs Plamen Tonchev, “17+1: Exo Pame Kala”, European Interest, April 13, https://www.europeaninterest.eu/article/171-exo-pame-kala/.