Abstract
ABSTRACT State-owned capital investment into so-called illiberal democracies in Central and Eastern Europe (CEE) has risen to become a more significant feature of CEE political economies, although knowledge of the impact of such transnational flows on illiberal capitalist development remains limited. This article analyses this form of capitalist relation by contributing to and consequently fusing two strands of burgeoning academic literature: (1) the political economy of illiberalism and (2) state capitalism. The result is an expansion of the purview of each: the former by focusing on CEE illiberalism’s external (state) capitalist dimensions; the latter via an upgrading of the rigour of the term ‘state capitalism’ through analysis of ‘new territorialities’. Empirically, I use a Case Study Analysis of Chinese state-owned capital investment into Serbia with focus on two Sino-Serbian agreements and identify two issues that may come to characterise the broader relationship between CEE illiberalism and Chinese state-owned capital investment.
Highlights
The emergence and consolidation of illiberalism in Central and Eastern Europe (CEE) was perhaps the most significant political development in the region in the 2010s
With the ongoing COVID-19 global pandemic forcing states to ‘re-enter’ the market and inject unprecedented amounts of capital to address value chain disruptions, infrastructure requirements, and welfare necessities etc., it has become more important to analyse the relationship between CEE illiberalism and Chinese state-owned capital investment, a form of capital transfer categorised under the rubric state capitalism
Treating Serbia as a single case study (N = 1), I analyse two interrelated dimensions that may emerge within the relationship between CEE illiberalism and (Chinese) external state-owned capital: (a) sectoral privileging for such transfers to become important nodal points within this relationship, and (b) creditor bias resulting from contractual stipulations; and two specific Sino-Serbian agreements: (i) the extension of the Kostolac B3 thermal power plant, principally financed by a Chinese state-owned bank loan; (ii) an aspect of the Safe Cities project, namely purchases of Chinese-manufactured military equipment
Summary
The emergence and consolidation of illiberalism in Central and Eastern Europe (CEE) was perhaps the most significant political development in the region in the 2010s. Since the 2010s, Chinese inward state-owned capital investment has become an increasingly important dimension of some CEE illiberal regimes’ political economies though its value to and impact on illiberal development is understudied.
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