Economic ” highway ” with three speed tracks and destinations between China and CEE
By Lin Yue
The launch of the ” 16+1 ” Cooperation Framework in 2012 enhanced economic relations between China and CEE countries, which already had craved for China’s financial support to recover from the recession during 2008-2009 crisis. After six years of a high political and economic engagement, to what extent China has materialized its influence in the region? This paper compiles data from various sources and tries to update our understanding of China’s current presence and potential impacts in the CEE region through three economic interconnection channels as pronounced in the ” One Road, One Belt ” initiative, namely trade, investment, and infrastructure. Through the horizontal comparison with EU’s more advanced 15 members’ engagement in the region, China’s envisioned economic ” highway ” is currently composed of three parallel tracks, where EU-CEE tradition and China’s innovative approach interact in different ways.
The influence of preexistent EU-CEE economic pattern varies among three economic pillars, with the trade being the least touched, the finance of infrastructure projects being the most conflicting and the ODI pattern being the best example of mutual impacts. From the perspective of interest stocks of China in CEE, China’s economic exchange with the most important economies in the region falls into EU framework, which suggests that the state’s potential and its economic structure are the basic reason of the strength of bilateral economic relation.
However, from the perspective of interest flows, China’s importance has been significantly increased in smaller states, which, on the one hand, will generate more tangible impetus to economic growth in periphery CEE countries, thus leveling regional discrepancy; on the other hand, will challenge once EU dominated institutional arrangement. Under this context, CEE has turned out to be the strategic region where China and EU would compete and cooperate with each other according to the efficiency of their relative economic diplomacy to define the most beneficial policies that are tailored better to the interests of CEE countries.
