China connecting Europe?

Abstract

The significance of China’s Belt and Road Initiative (BRI) for Europe is increasing. The diplomatic initiative “16 + 1,” comprising China and 16 Central, East and Southeast European economies (CESEE), expanded to a “17 + 1” format in April 2019, when Greece officially joined the cooperation forum. This expansion revived interest in Chinese activities aimed at better physical and digital connectivity in Europe and their effects. The article descriptively shows a geographical division of Chinese infrastructure development activities in Europe: the “17 + 1” region is targeted more intensively by Chinese construction projects. Moreover, roughly 90% of all construction contracts with the “17 + 1” region are attributable to connectivity sectors, while Chinese activities in other European regions are more diversified. In Europe, the Western Balkans are expected to economically benefit the most from the BRI, as they show particularly high deficiencies in infrastructure, and so far, have limited access to EU grants. Economic effects of infrastructure projects, however, trickle through European production and supply chains, affecting a larger number of countries than information on projects would suggest. EU initiatives presented since 2018 may help to increase complementarity between Chinese and European infrastructure development plans and reduce associated risks, such as unsustainable debt or new trade barriers arising from increased competition for Chinese investments. The BRI is about to change physical and digital connectivity within Europe, while the EU has yet to become an active player engaging in the initiative, in order to enable improved connectivity in Europe to drive economic convergence and not political divergence.