By Zhao Minghao Source: Global Times Published: 2015-11-30
The just-concluded fourth China-Central and Eastern Europe (CEE) summit demonstrated strong desire for cooperation between China and the 16 CEE countries, as well as huge potential for such cooperation.
The summit outlined a blueprint for cooperation in the next five years, which will significantly boost the cooperation between China and the 16 CEE countries in areas such as infrastructure, trade and finance, as well as injecting new vitality into the economic ties between them.
Europe is currently grappling with multiple challenges. The debt crisis, refugee problems and geopolitical conflicts related to Syria and Ukraine are threatening European integration and long-term prosperity. China wishes to see a united and strong Europe and believes that deepened economic cooperation will help with this. Strengthening economic and trade ties between China and the CEE countries can actually help promote European integration.
First, financial support from Brussels can hardly meet the need for economic development in CEE countries, and their need for infrastructure improvement is urgent. Substantial progress has been made this year in preparations for a railway project to be jointly built by China, Serbia and Hungary, and construction of the railway - which links Belgrade, the capital of Serbia, and Budapest, the Hungarian capital - will soon start. The new railway will shorten the journey between Belgrade and Budapest from eight hours to three hours. Investment from China in key projects such as the Belgrade-Budapest railway and the China-Europe land-sea express line will help upgrade infrastructure facilities in Europe and will also help to promote connections between CEE countries and Southern Europe. It will also turn the CEE region into an express passage route for trade between China and Europe.
Second, China stresses "tri-party cooperation," a stance that actually addresses the concerns of some "old" European countries such as France and Germany. Beijing hopes to bring China`s competitive production capacity to CEE nations to meet their development needs and integrate it with the key technologies in developed Western Europe. China does not wish to dominate CEE markets. Meanwhile, operation of the joint projects between China and CEE nations will be market-based and China will continue to improve openness and transparency in operating these projects.
Furthermore, a multilateral financial firm between China and the 16 CEE countries (16+1 multilateral finance company) will be established to support the cooperation. Operation of the firm will comply with international standards and will be highly efficient. The Chinese government is also encouraging Chinese commercial financial institutions such as Industrial and Commercial Bank of China to work with regional and international multilateral financial institutions such as the European Bank for Reconstruction and Development to offer more financial support for "16+1 projects."
Third, China has put great emphasis on meeting the needs of CEE nations and respects the unity between these nations. China has become the world`s largest importer of agricultural products and many CEE nations produce internationally competitive agricultural products. Countries such as Serbia, Macedonia, Lithuania and Estonia are eager to boost exports of agricultural products to China and they are stepping up cooperation with China in quarantine inspection. China also encourages small and medium-sized firms in CEE countries to expand exports to China through e-commerce platforms, with Chinese people having become highly experienced and keen users of e-commerce platforms.
Many CEE countries such as Croatia, Slovenia, Poland, Latvia and Bulgaria have offered to advance port cooperation with China, but China does not want to see fierce competition among them. As a result, China has proposed an initiative to promote cooperation among port areas in the Adriatic Sea, the Baltic Sea and the Black Sea as well as industrial parks in these areas. This is key to maintaining the sustainability of "16+1" cooperation and allowing all participants to benefit from it.
On November 9, the Paris-based Organisation for Economic Co-operation and Development (OECD) lowered its global growth forecast for 2015 to 2.9 percent from its initial forecast of 3.7 percent last November. It also cut the 2015 growth forecast for the eurozone to 1.5 percent.
Under these circumstances, the "16+1" pragmatic cooperation model is increasingly important. Previously, Europe was more accustomed to benefiting from China`s economic growth, but now Europe must learn to benefit from China`s economic transition. Perhaps CEE nations are just leading the way in this regard compared with some "old" European countries. They can become the forerunners for reshaping economic cooperation between China and Europe.
The author is a visiting fellow at the Chongyang Institute for Financial Studies at Renmin University of China.