Budapest, Hungary [File photo]

The Budapest "16+1" summit has been considered a success by participant countries. The speech of Chinese Premier Li Keqiang generated a wave of hope for new investments and better perspectives for the future in the region of Central and Eastern Europe as well as in the Balkan Peninsula. 

No doubt, China's role has been catalytic in promoting economic development. Boyko Borisov, Prime Minister of Bulgaria, where the summit of next year will be held, did not hide his enthusiasm during a press conference.

Nevertheless, the fifth anniversary of the launch of the "16+1" cooperation coincides with ongoing Western skepticism on potential consequences of Beijing's successful engagement in the European structure. Practically, the more it grows, the more its presence is felt in the West. Alarm is growing over the potential political and geopolitical gains that could accrue to China as a result of the Belt and Road Initiative, which is being dynamically rolled out. 

Within this context, European countries joining the "16+1" are criticized by Brussels for acting outside the EU framework. Germany, which sets the tone in the EU, openly views China as an adversary on several themes. A few weeks ago Foreign Minister Sigmar Gabriel went further, saying that if the EU fails to develop "a single strategy towards China, then China will succeed in dividing Europe." The Beijing administration was "shocked" and publicly expressed its anger.

More importantly, on the initiative of German Chancellor Angela Merkel, the EU has grown more cautious about approving business deals with China. In October 2016, the German government withdrew its approval for the takeover by China's Grand Chip Investment GmbH of Aixtron SE, which supplies equipment to the semiconductor industry. This marked the beginning of the new European approach. Last June, France's newly elected president, Emmanuel Macron, encouraged his European partners not to be naïve about global trade and agreed with Merkel's perspective.

President of the European Commission Jean Claude Juncker took the position of Berlin and Paris into account in his 2017 State of the Union address, in which he proposed a new EU framework for investment screening. Without directly referring to China, he talked about the need for transparency, scrutiny, and debate when "a foreign, state-owned company wants to purchase a European harbor, part of energy infrastructure, or a defense technology firm."

The screening of investments can create delays but is practically not sufficient to cancel the plans of Chinese public and private companies. These companies are slowly acquiring Western investment know-how and are patiently aligning their business strategies with Western norms and participating in public competitions. The natural question is what happens when a Chinese company submits a bid that is higher than that of a Western company, or when its competitors withdraw or show no interest. The Greek experience is telling: in 2016, COSCO Shipping managed to buy a majority stake in the Piraeus Port Authority as it was the only player in the privatization.

After Juncker's State of the Union address, the EU – under German leadership – is opening a new chapter in its relationship with China. It does not necessarily have the upper hand, though. Europe lacks a real foreign policy power. Also, it could see its demand for reciprocity and openness within China weakens as it opts for a special type of protectionism for security reasons. More significantly, the EU is targeting China and attempting to apply strict rules during a period when it needs foreign cash and investments as well as synergies with Chinese banks and financial institutions.

Chinese officials regularly attempt to appease the fears of Brussels. The latter prefers to be suspicious though. Of course, this European tendency can hardly prevent the '16' from serving their economic interests. Recently announced plans, including, inter alia, the import of high agricultural products by China, the functioning of new rail lines, the establishment of industrial parks and logistic centers, the participation in the' Made in China 2025' strategy as well as the founding and strengthening of an inter-bank association and an investment cooperation fund respectively are driven by win-win cooperation motivations. They will bring tangible results as opposed to the Brussels' vague anti-China attitude. 

As President Xi Jinping has pointed out, the "16+1" cooperation mechanism is forming an all-round, wide-ranged and multi-level cooperation pattern, and constitutes an innovative practice for China-Europe relations.

George N. Tzogopoulos is a columnist with China.org.cn. For more information please visit:

http://www.china.org.cn/opinion/GeorgeNTzogopoulos.htm

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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