Can China accelerate the green transition in central and eastern Europe?

China’s diplomacy in the region has upset the EU, but greater cooperation could deliver climate-friendly infrastructure
<p>The first direct freight to reach Belgrade from China, laden with equipment for the high-speed Belgrade–Budapest railway project, October, 2019 (Image: Alamy)</p>

The first direct freight to reach Belgrade from China, laden with equipment for the high-speed Belgrade–Budapest railway project, October, 2019 (Image: Alamy)

Xi Jinping’s planned “17+1” summit in April may have been scuppered by coronavirus, but that hasn’t stopped the long-running and contentious debate about China’s intentions and impacts in Europe.

The 17+1 forum was founded in 2012 to deepen ties between China and the 17 central and eastern European (CEE) states that span a diverse area from the Baltic to the Balkans. It has prompted excitement in countries eager for Chinese investment – and subsequent disappointment. It has been cast as a pressing strategic threat to Europe and an “empty shell”; considered a conduit for dirty infrastructure development under China’s Belt and Road Initiative and a potential “window of opportunity” for sustainable development.

Now a new report by the China Observers in Central and Eastern Europe (CHOICE) network has challenged the more sceptical views on the significance of China’s relationship with the region, arguing that cooperation is greater than previously thought. 

So what do experts in the region make of the 17+1 in 2020? What does it reveal about China’s influence in Europe? And what are the implications for the climate cooperation so badly needed between China and the European Union?

More than an empty shell

Ivana Karásková is China research fellow at the Association for International Affairs in Prague and one of the authors of the CHOICE report. Although she herself first coined the term “empty shell” to describe an initiative that appeared to be producing little beyond outline agreements and photo opportunities, she changed her mind after carrying out a large-scale audit of 17+1 interactions.

The nature of 17+1 cooperation is elusive, said Karásková, because of a lack of transparency on the ground – many activities are not publicised or shared with local media, suggesting nothing much is happening. Where information is available, says her report, it is so fragmented it makes China’s actions look “scarce and random”.

However, when the researchers expanded their search to include Chinese sources, they found a richer vein of interaction. This included, for example, programmes targeting youth and political leaders and a range of cooperation formats “from ministerial dialogues to seminars and even dance camps”. The researchers found that subnational cooperation, such as between cities or provinces, was flourishing, leading to university partnerships, more direct flights, and trade and investment fairs.

“We have to rethink this whole empty shell concept,” Karásková told China Dialogue. “It was a region where [China] had almost no relationships … they started from scratch and within less than eight years they established themselves quite firmly.”

It is this view of the 17+1 as a structure with clout that has caused consternation in Brussels, where officials have tended to regard the forum as a hostile tool to “divide and conquer” Europe, according to Karásková and other experts. At a time when the world is relying on China and the EU to step up and act collectively to avert climate breakdown, potential cleavages between the two matter more than ever.

Coronavirus willing, Chinese and EU leaders will meet for a summit in Leipzig in September, and climate will be on the agenda. Could 17+1 strain the relationship at a pivotal time for the planet?

Overestimating China’s influence

Many observers are frustrated by what they see as an exaggerated view of the situation on the EU side. The idea that Europe is being divided via Chinese investment in CEE countries is “simplistic” and infantilising of those states, say the authors of the CHOICE report, who urge the EU to drop this mindset. Karásková points out that in 2019 only around 3% of China’s foreign direct investment in Europe went into CEE countries, with the rest flowing into western European states.

Richard Turcsányi, program director at the Central European Institute of Asian Studies at Palacky University in the Czech Republic, also believes Brussels is overestimating China’s influence in the 17 countries, aside from Serbia and to a lesser degree Hungary. “Sometimes there is this image of Chinese influence being very strong in the CEE region, but in fact I would say the opposite might be closer to reality: that China really wants to build its presence to the extent it is present in other regions,” he said. 

But even if China’s interactions with CEE countries pose no material threat to Europe, Turcsányi and others believe the symbolic effect of the 17+1 is still significant. 

One area where this has potential to play out with damaging consequences is in climate cooperation, according to Igor Rogelja, a teaching fellow at the Lau China Institute at London’s King’s College. Narratives pinning the blame on China for polluting projects in Bosnia and Serbia, for example, risk shifting wider perceptions in a damaging direction. “The danger is that there is a sort of comprehensive anti-China narrative forming that will really scupper any chance of negotiation,” Rogelja said in an email.

It’s more convenient to point your finger at China, a known polluter, than deal with the root problem of poverty and poor governance in south-eastern Europe
Igor Rogelja, Lau China Institute of King’s College London.

Chinese state-owned enterprises are “definitely harming China’s image and building things that should not be built”, he said, but they are not the main reason holding back a transition to low-carbon energy in the region. The EU has far more influence than Beijing and local interests are the primary drivers of coal plants and other polluting schemes. “The EU should stop blaming China … and take more responsibility for the failed transition in the region,” he said. “Of course, it’s more convenient to point your finger at China, a known polluter, than deal with the root problem of poverty and poor governance in south-eastern Europe.”

How can the EU accelerate the green transition in CEE countries while maintaining a constructive relationship with China?

One response might be to inject new life into EU accession talks with countries in the 17+1 club that are not yet EU members. Dragan Pavlićević, associate professor at Xi’an Jiatong Liverpool University, points out that 17+1 documents published during the forum’s annual summits say that participating states will proceed in accordance with EU standards – but notes that there is some leeway for those that are not yet EU members. A plan to build a lignite coal plant in Bosnia with Chinese money, for example, has already been challenged by the EU’s enlargement chief, who said it flouted state aid rules of the Energy Community (which Bosnia belongs to as an EU candidate country) and questioned the choice of technology.

The prospect of EU membership should allow Brussels to exert considerable influence over such decision-making, said Pavlićević, but the EU has been sending mixed messages about enlargement. The path to accession needs to be credible and perceived as such for the EU to maximise leverage, he said.

EU-China cooperation

For Pavlićević, the most constructive approach would be to partner with both CEE countries and China to vigorously identify, develop and finance green projects in the region. “Incorporating China’s expertise and finances would allow for more to be done,” he said, while avoiding antagonising recipient countries – and China – through a zero-sum approach.

Tomáš Jungwirth, head of the climate team at the Association for International Affairs, said a shift in approach to overseas investments from China could also help if it joins up its more stringent climate outlook at home with the approach taken under the Belt and Road Initiative.

“If China decides to actually bring in line its external activities and investments abroad with this more progressive vocabulary it has been using lately on climate this would obviously be very helpful globally and surely as well in this region, because then you would have more than the quote unquote Evil Brussels pushing for a more climate progressive agenda.”

But even if China decided to push for a greener approach in the CEE region, how likely would it be to succeed? Many countries here remain dependent on fossil fuels and heavy industry while climate ambition has lagged behind western states. Poland’s exemption from Europe’s target for carbon neutrality by 2050 is just one marker of the tough political context.

There is an ideal world in which the EU and China integrate their carbon markets and become leaders of the global climate agenda
Max Jungmann, co-founder of Momentum Novum

Max Jungmann, co-founder of Momentum Novum, a German social enterprise focused on sustainable development, sees these as significant blockers. Jungmann wrote a paper in 2018 arguing the 17+1 held potential to create a “window of opportunity” for sustainable development but argues that window remains closed. As well as the challenging politics around climate, he said rising anti-Chinese sentiment presents a potential barrier.

Nonetheless, Jungmann believes the 17+1 could drive cleaner development if the policy areas covered in the 17+1 cooperation considered sustainability and connected it firmly to trade opportunities. Upgrading rail lines, for example, could be a fertile area for investment that serves both economy and environment. He also hopes to see the EU and China use their dual influence to accelerate a green transition.

There, of course, he is not alone. As the urgency of the climate crisis comes into sharper focus, many across the world are waiting to see if the EU and China can forge a partnership that triggers the level of global change required. “There is an ideal world in which the EU and China integrate their carbon markets [and] become leaders of the global climate agenda,” said Jungwirth. “And if that doesn’t happen, nothing will. Because the EU alone is not strong enough.”