Fact of the week: One belt, one road in Europe?

Anyone who has been to Athens recently will be able to testify about the transformation of the Piraeus port and its current distinctive Chinese mark. When Greece was struggling to find cash to pay back its debts to its fellow European countries in 2008, China was there to quickly invest in the lagging Greek economy and to privatize important elements of its infrastructure sector - the Chinese foreign policy flagship commonly referred to as “One belt, one road”. Nowadays, Chinese companies are able to use Athens as a logistical base to enter Europe through the state-owned China Ocean Shipping Company (COSCO).

But the Chinese entry into the European market doesn’t stop there. President Xi Jinping is strengthening the bond with old and new friends by investing in financially struggling countries, especially in Eastern Europe. In March 2016 he visited the Czech Republic to kick-start the ‘One belt, one road’ initiative there with new €4 billion agreements. With these agreements China became The Czech Republic’s largest trading partner outside the EU. In earlier agreements, China has closed separate deals with Serbia and Hungary for a 350 kilometer Budapest-Belgrade high-speed railway project. On top of this Slovakia, Poland, Romania, and Bulgaria have openly expressed interest to strengthen economic ties with China.

So how does this closer cooperation affect businesses in Europe? First of all, China’s strategic investments in infrastructure literally pave the way for Chinese companies to spread their goods to the European consumer. European businesses can expect ever increasing competition from Chinese companies in their own market. Secondly, increased economic cooperation between European countries and China also leads to increased political cooperation. Where China before refused to comment on or mingle in foreign politics, at the 2015 EU-China summit in Brussels the European Commission and the Chinese government signed a joint summit declaration while publicly discussing the Chinese government’s wish for Greece to remain in the Eurozone. President Xi recently also publicly scolded the United Kingdom for not taking a constructive and positive role in promoting in-depth development of China-EU relations.

The increased economic and political cooperation between China does not seem completely balanced, however. Where Europe is quickly opening up to Chinese companies and - to a certain extent - Chinese politics, European businesses are increasingly struggling to enter the Chinese market. The Chinese government is quickly introducing new restrictive regulations and red tape for foreign investors and businesses. As long as European politicians do not take up their role to unite Europe and to communicate with one voice, it seems the relationship between China and Europe is increasingly becoming imbalanced.