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Comments on the New Chinese Initiatives and Their Potential Impact on the Sino-Romanian Relations

Comments on the New Chinese Initiatives and Their Potential Impact on the Sino-Romanian Relations

No. 4, Mar.-Apr. 2017 » UNCOVERstory

Comments on the New Chinese Initiatives and Their Potential Impact on the Sino-Romanian Relations[1] 

Since 2012, the new Chinese administration has begun to model the Chinese “going-out strategy” under the characteristics of self-assurance, confidence, leadership and global networking. Initially, the Belt and Road initiative (BRI), announced in autumn 2013 by President Xi Jinping, might have appeared as utopian in the intention of reactivating and extending the Silk Road by land and sea beyond Asia-Pacific, towards Europe, Africa and America. The long-term vision of the BRI is underscored by its first implementation phase, which should be finished until 2049, the year of the 100th anniversary of the People’s Republic of China.

Why might the BRI be considered as a utopia? In 2011, the world superpower, the United States, had advanced a tiny initiative branded as a New Silk Road, aiming at “revitalizing” Afghanistan “as the link between Central and South Asia”. That miniature plan of the world superpower was destined for failure, so how could an incomparable larger scale project launched by the so-called “regional power” China (Rogers et al., 2014) succeed? The answer might be: using the appropriate tools.

 The long-term vision of the BRI is underscored by its first implementation phase, which should be finished until 2049, the year of the 100th anniversary of the People’s Republic of China.

The BRI involves five complementary ways of implementation: policy coordination, connectivity, trade facilitation, financial integration and people-to-people exchanges (NDRC, 2015). Objectives of infrastructure development, connectivity and coordination lie at the core of this large-scale project. It merges with other national or regional projects and it also integrates other Chinese initiatives. For instance, at the Suzhou summit, the Chinese President Xi Jinping proposed the goal of fully integrating the “16+1 Cooperation” [2] into the “Belt and Road” initiative. Both are guided by the “Silk Road Spirit” of “peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit” (NDRC, 2015, Sun, 2016). At the same time, the Asian Infrastructure Investment Bank (AIIB), another recent Chinese initiative, became one of the institutions ready to finance projects alongside the New Silk Road, together with the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the New Development Bank and the World Bank Group (China Daily, 2017).

The BRI involves five complementary ways of implementation: policy coordination, connectivity, trade facilitation, financial integration and people-to-people exchanges.

The BRI has a variable geometry and it incorporates not only one Belt and one Road, but a host of continental and maritime Belts and Roads. Moreover, it might include also Antarctica and the Arctic, as China is expanding its presence to the North and South Poles. That is the main reason why Professor Hu Angang from the Tsinghua University completed the formula of Belt and Road with a Circle: One Belt, One Road, One Circle (Huang, 2017).

In 2017, less than four years after the bold BRI announcement, over 70 countries and international organizations have already concluded agreements with China in order to develop the New Silk Road with shared resources, competences and actions. The Belt and Road Forum for International Cooperation (BRF), which took place in Beijing during May 14-15, 2017, underlined that there have already been 270 concrete results under the BRI (China Daily, 2017). Therefore, the BRI does not appear utopian any more. However, there are not only enthusiasts alongside the Silk Road, but also sceptics and opponents.

The 16+1 platform is considered by such critics a way to “divide and rule” Europe, while skepticism and suspicion about the BRI are associated with the “emergence of a new Sino-centric regional order” and “potential hegemonic ambitions”.

As regards the European institutions and major Western European countries, as well as US, Japan and India, they have adopted a cautious attitude with relation to China, insisting on the potential risks associated with the recent Chinese initiatives. The 16+1 platform is considered by such critics a way to “divide and rule” Europe (Turcsányi, 2014), while skepticism and suspicion about the BRI are associated with the “emergence of a new Sino-centric regional order” and “potential hegemonic ambitions” (European Parliamentary Research Service, 2016). Regarding the BRI, there are also concerns related to: the lack of communication and clarity (Arduino, 2016), a too long implementation period (Godement, 2015), “fear of competition from Chinese industries, namely construction and high-speed rail firms, and the potential impact on job markets in developed European economies” and possible lack of “high standards for good governance or environmental and social protection” (Lai, 2017). Behind such arguments, there is a stronger one, namely the potential geopolitical rise which is accompanying the economic rise of China and poses challenges to the already established powers.

Sino-Romanian relations in the actual context 

The trajectory of the relationship between Romania and China can be understood only in the broader framework given by our country's status as a strong EU-optimist and also as a state for which the strategic partnership with the United States has a leading role as a guarantor of national and regional security. What should Romania do in a period when the Western European and American critiques against China are on the rise? How should Romania react amid concerns that Chinese investment in strategic sectors might compromise national security, as asserted by Western European countries such as the United Kingdom and Germany? Undoubtedly, it should react in line with its obligations under the EU legal framework, but in accordance with its national interest.

Romania’s stance towards China might be described as a “wait and see” attitude.

Let us have a look at Romania as a participant in the 16+1 platform. Romania’s stance towards China might be described as a “wait and see” attitude. A passive attitude was evident during November 2015-December 2016, despite the recognition of the importance of the partnership with China, and the fact that the Chinese market is one of the most relevant in the world, and China is a valuable source of investment.

Even if Romania took part in all the high-level meetings until now – Warsaw (2012), Bucharest (2013), Belgrade (2014), Suzhou (2015) and Riga (2016) – and was one of the first countries to sign a Memorandum of Understanding on BRI Promotion in the Joint Economic Commission in 2015, however its participation in this platform is less intense than that of other countries.

Romania considers that a balance should be struck between the EU decisions and the Member States’ national interest.

Among the CEE states, Poland is considered by China as its most important partner (Góralczyk, 2017), while Hungary is a partner with a “special status” (Chen, 2017), which manifests the most obvious political will to strengthen bilateral relations (Góralczyk, 2017). Out of the CEE-16 countries, Poland, the Czech Republic and Serbia are China's strategic partners. Poland is not considered by China to be merely a regional economic power, but also a country with the ambition to become a powerful state (Yao, 2017), which does not hesitate to criticize EU decisions when the national interest calls for it. The same is valid for Hungary, which has not supported a firm EU common position against China in sensitive issues, which reflects the success of the latter's bilateral lobbying actions (Godement, 2016). Romania is obviously not a supporter of lobbyism and subversive actions; nevertheless, Romania considers that a balance should be struck between the EU decisions and the Member States’ national interest.

In the 16+1 format, each country has chosen to coordinate one or more priority areas for cooperation. Poland is the most active, coordinating trade, investment and maritime business sectors, while Hungary has chosen tourism as a priority, the Czech Republic cooperation at the level of local authorities, Bulgaria agriculture, Latvia logistics-transport, Slovenia forestry cooperation, Serbia infrastructure, Macedonia culture, and Romania energy. It should be underlined that Romania has the potential to strengthen relations with China in all these fields, but also in others, such as IT, education, telecommunications, but it has chosen energy sector as the potential Chinese investment and partnership agreements with the Romanian state in this field might attract funds estimated at Euro 7-8 billion. However, none of the plans announced by the Romanian government in partnership with China have been implemented until now, neither in the field of energy, nor in others such as infrastructure.

Out of the CEE-16 countries, Poland, the Czech Republic and Serbia are China's strategic partners.

In contrast to the CEE countries actively participating at the 16+1 platform, which organized in due course the meetings in their coordinated spheres, Romania postponed the energy meeting announced for 2016. The Center for Dialogue and Cooperation on Energy (CDCEP 16+1), coordinated by the Romanian Energy Center, was set up only on the 20th of October 2016. However, as a member of the 16+1 framework, due to the networking push effect, Romania is stimulated to keep the pace with the active players, in order not to be left behind. Therefore, the energy meeting will take place in Bucharest in 2017.

Unlike the unfulfilled commitments of the public sector, many private initiatives could be implemented. The total value of Chinese investment in Romania during 2000-2016 is estimated by Rhodium Group at almost Euro 890 million, and the sectors most attractive to Chinese investors are: energy (35% of total Chinese investments in Romania in 2000-2016), information and communication technology (24%) and the automotive industry (parts and components, 14% of the total). Apart from these three fields, that concentrate nearly three-quarters of Chinese investments in Romania, there are many others that are attractive to Chinese investors: transport, utilities, infrastructure, industrial machinery and equipment, tourism, agriculture, biotechnology.

Among the other positive results which warrant mention was in 2016, when the first “smart city” project was launched by Chinese company ZTE along with Timişoara City Hall, including street lighting and intelligent parking facilities. It should be underlined that the initiative belongs to ZTE, not to the local authorities.

Romania should pay more attention to its national interest, while developing more balanced relations with other countries of the world, outside the EU and NATO.

Since the beginning of 2017, Romania seems to be paying increased attention to China and vice versa. On May 13, 2017, the Board of Governors of the AIIB approved seven new members, including Romania[3]. At the same time, between May 15-16, 2017, Romania participated in the first Belt and Road Forum for International Cooperation held in Beijing. Our country was not represented at the presidential or prime-minister level, as was the case of the most active 16+1 countries in relation to China (Czech Republic, Poland, Hungary, Serbia), but has shown that it is determined to be positioned on the New Silk Road Map. 

Conclusion 

The geometry of both BRI and 16+1 is variable and depends primarily on the political will of the partners to engage and support cooperation with the world's most powerful emerging economy. In our opinion, Romania should pay more attention to its national interest, while developing more balanced relations with other countries of the world, outside the European Union and North Atlantic Treaty Organization. Definitely Romania must continue the EU integration process and the strategic partnership with the United States, but these should not become barriers towards intensifying the relationship with China, a rising power. 

References 

Arduino, A. (2016), China’s OBOR: Has the EU Missed the Train?, RSIS Policy Report, March.

Chen, X. (coordinator) (2017), How Hungary Perceives the Belt and Road Initiative and China-CEEC Cooperation, China Social Sciences Press, National Think Tank (1), Beijing.

China Daily (2017), List of Deliverables of the Belt and Road Forum for International Cooperation, May 16.

European Parliamentary Research Service (2016), OBOR, China’s regional integration initiative.

Godement, F. (2016), EU strength and weakness facing China, Commentary, July 28, European Council on Foreign Relations.

Godement, F. (2015), One Belt, One Road: China’s Great Leap Outward, European Council on Foreign Relations, June.

Góralczyk, B. (2017), China’s interests in Central and Eastern Europe: enter the dragon, European View.

Huang, K., (2017), Will the Arctic be the next stop on China’s new Silk Road?, May 21, South China Morning Post.

Lai, S-Y. (2017), Understanding Europe’s Interest in China’s Belt and Road Initiative, May 10, Carnegie Endowment for International Peace.

National Development and Reform Commission (NDRC) (2015), Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, March 28, available at: http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html.

Rogers, J., Simon, L., Fiott, D. (2014), European Geostrategy’s ‘Audit of Major Powers’: the world’s fifteen most powerful countries in 2014, European Geostrategy.

Sun, Z. (2016), “16+1 Cooperation” in Synergy with the “Belt and Road” Initiative: Approach and Prospect, Keynote speech at China-Poland Foreign Policy Forum, Warsaw, June 20.

Turcsányi, R. (2014), Central and Eastern Europe’s Courtship with China: Trojan Horse within the EU?, European Institute for Asian Studies, EU-Asia at a Glance, January.

Yao, L. (2017). “China and Poland: Economic Cooperation under the 16+1 Formula”, Nouvelle Europe, February, available at:

http://nouvelle-europe.eu/en/china-and-poland-economic-cooperation-under-161-formula.

 

[1] This synthesis is based on the preliminary results of the investigations carried out as part of the study “Romania, at the junction between the Chinese initiatives Belt and Road and 16 + 1. Positioning Romania on the New Silk Road Map”, included in the research plan of the Romanian Academy, 2017, coordinator I. M. Oehler-Șincai.

[2] The acronym refers to the cooperation platform proposed by China in 2011 and which includes CEE-16 (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia) and China.

[3] The other six member countries that joined the new bank together with Romania are: Bahrain, Bolivia, Chile, Cyprus, Greece and Samoa. Other 13 EU member states are already AIIB members: Austria, Denmark, Finland, France, Germany, Italy, Luxembourg, Malta, Netherlands, Poland, Portugal, Sweden and United Kingdom.

 

 

 
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