China and the EU in the Western Balkans: A Zero-Sum Game?

Written by | Tuesday, September 8th, 2020
@Eubulletin

Does China’s approach to the six non-European Union countries of the Western Balkans (the WB6) relate to EU interests, and if so, then how? And does China’s influence affect the behavior of the WB6 governments in ways that run counter to the EU’s objectives in the region?

China engages with the Western Balkans primarily as a financier of infrastructure and a source of direct investment. This is in line with China’s main strategic objective for the Western Balkans – that is, to develop the Land–Sea Express Corridor, a component of its Belt and Road Initiative, aimed at improving China–EU connectivity. But China is not pursuing a common regional strategy for the Western Balkans. Instead, it has embedded its bilateral ties with the region in the 17+1 cooperation platform, which involves the EU’s Central and Eastern European countries, plus Greece. There is substantial differentiation among the WB6 when it comes to the level of linkage formation with China, with Serbia clearly being China’s preferred partner, and relations with Kosovo being the least developed.

China’s increased engagement with the six non-EU countries of the Western Balkans affects the EU’s ability to shape the policy context (that is, to shape parameters of the choices another country can make) and conduct (that is, to affect concrete actions or choices) of governments in the region. At the same time, Chinese and EU economic engagement does not need to constitute a zero-sum game in which gains by one mean losses for the other. Efforts by the two great powers aimed at economic development and regional stability can be potentially mutually reinforcing. China’s most important strategic objective for the WB region, building the Land–Sea Express Route, can provide the region with a more central role in transport networks that connect Central Europe to Asia and East Africa. This, in turn, can help the region attract more foreign direct investment, both from Chinese and non-Chinese sources.

Whether and to what extent China’s involvement is actually compatible with EU interests depends on the conditions under which such involvement takes place. Activities by Chinese actors in regard to the Western Balkans are to some degree incompatible with the EU acquis and EU standards. This relates to a variety of domains, including public procurement, state aid, environmental sustainability and human rights. China is relevant not only for the behaviour of Western Balkans governments in these domains, but linkage formation with China also weakens (somewhat) the EU’s bargaining position, as governments in the region have an increased opportunity to play the EU and China against each other. Moreover, linkage formation with China provides politicians in the Western Balkans with new avenues for established practices of corruption.

To date, there are no signs that the political leaders of the EU and EU member states are interested in disengaging economically from China. Moreover, China may be expected to continue to respond to the demand for economic development in the WB6, especially as a provider of infrastructure development, and particularly if EU institutions refrain from doing so. In other words, China will remain a significant economic actor both in the Western Balkans and within the EU, with which the EU will need to continue to deal. This poses a dilemma for the EU. To draw the Western Balkans closer, the EU needs to show that it is able and willing, to an important extent, to meet the demand for economic development. At the same time, the EU needs to stick to its own standards. To address this fundamental dilemma, this Clingendael Report makes a number of recommendations.

First of all, the EU should acknowledge the (economic) interests of the WB6 and provide alternatives for cooperation with China. The European Commission’s upcoming economic investment and development plan for the Western Balkans can create a basis for such an approach. Second, the EU should use a more effective enlargement process to mitigate potential negative effects of increased Chinese–Western Balkans engagement. Third, the EU would do well to increase its efforts to ensure that when there is Chinese economic engagement, it is in accordance with EU standards, rules and values, especially with regard to the EU’s good governance agenda and EU rules on public procurement. Fourth, since the attractiveness of EU funding for infrastructure development is negatively affected by the conditions attached to it, the EU could at least offer increased operational support to the WB6 to meet the demands attached to funding.

Moreover, fifth, given the high prevalence of corrupt practices in China itself, linkage formation between China and the Western Balkans will continue to offer incumbent governments in the region with opportunities to retain locally established practices of corruption. Reinforcing dialogue on (high-level) corruption, and clear condemnation of corrupt practices in written documents will remain key in this regard. Sixth, it remains vital for the EU to communicate clearly the benefits of the standards it seeks to diffuse in the Western Balkans, both to governments and to citizens. Last but not the least, intra-EU initiatives aimed at preventing or discouraging Chinese acquisitions that have negative long-term implications for the EU’s strategic autonomy should be aligned with the fact that the non-EU countries in the Western Balkans are preparing for EU membership. The EU should condition progress in the accession process on a mechanism for such alignment that converges long-term strategic interests of both the EU and individual WB countries in ways that are politically feasible and acceptable today for those countries (prior to their membership) and in the longer run (once they are members) for the EU as a whole.

‘China and the EU in the Western Balkans: A Zero-Sum Game?’ – Report by Wouter Zweers, Frans-Paul van der Putten and Mirela Petkova – Clingendael / The Netherlands Institute of International Relations.

The Report can be downloaded here

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