Zivadin Jovanovic, the Belgrade forum for a World of Equals, Connectivity Research Center

It is five years now since the inception of cooperation between Central and Eastern European Countries and China (16+1 format). In 2012 then Prime-minister of the People’s Republic of China Wen Jibao presented to the first summit of prime ministers of China +16 CEE countries in Warsaw, Poland, the document titled “China’s Twelve Measures for Promoting Friendly Cooperation with Central and Eastern European Countries. The document known as “Warsaw Initiative” symbolizes the beginning and foundation of multitier, long-term, strategic cooperation between China and 16 CEE countries (1+16), based on sovereign equality, mutual trust and benefits, in win win mode.

Now, five year after, concrete results in practical economic cooperation and people to people exchange, have confirmed that the Initiative has been widely accepted and able to deliver unprecedented results. Cooperation mechanism 1+16 proved in practice to be realistic, efficient and in harmony with development strategies of participating countries. Outside the region of CEE countries 1+16 format of cooperation gained positive reactions as the new reality producing synergy between various forms of integration and improving understanding between the East and the West.

The One Belt One Road (OBOR) Initiative launched by the President of PR of China Xi Jinping in September 2013 gave strong impetus to China+CEE format of cooperation attributing to it new dimensions and opening new opportunities. In addition, the OBOR Initiative released synergy for development of much closer cooperation between CEE countries themselves and between CEE and the countries all along Economic Belt.

The China -CEE cooperation under OBOR opened possibilities to:

- Speed up modernization of infrastructure, particularly railways, highways, airways, sea and inland water ways;

- alleviate development, technological and social discrepancies within CEE as well as between CEE and highly developed countries of EU;

- accommodate to the new realities in the world economy wherein China with her stable, continuously rising economy, plays global role;

- contribute to the overall cooperation between EU and China, having regard EU-China 2020 Strategic Agenda for Cooperation;

 - participate in regional and global economic recovery while upgrading own economic development having regard global, multidimensional character of the OBOR Initiative.

Geographical position of CEE countries, significant economic, market human resources, on one side, thirst for investments, modern economic development and higher employment, on the other hand, make China and CEE countries mutually desirable cooperation partners. China’s interests to improve strategic relations with Europe (EU), to upgrade mutual trade and investments, make CEE region through 16+1 format new engine of deepening EU-China cooperation. In addition, China’s rise to the post of the second strongest world economic power, China’s great achievements in development of new high technologies as well as worldwide recognized win win approach to cooperation did encourage CEE to embrace 16+1 cooperation as important possibility to enhance trade and investment.

After 2012 Warsaw Summit regular yearly16+1 format Summits have taken places in: Bucharest, Romania (2013); Belgrade, Serbia (2014); Suzhou, China (2015) and Riga, Latvia 2016. The venue of the 2017 Summit will be Budapest, Hungary. Each of the summits adopted guidelines as key documents setting out mutually agreed concrete tasks and measures, as well as reviewing status of preceding guidelines. Riga Summit adopted separate Declaration “Adriatic-Baltic-Black Sea Seaport Cooperation”.

All meetings, documents and implementation status reports have proved to be highly important, both, in preparation and implementation of guidelines or other common decisions thus reinforcing efficiency and practical character of 16+1 format cooperation.

Think tanks have very important roles in studying in depth and analyzing various aspects of cooperation under OBOR Initiative, identifying best options, predicting development conditions and producing policy recommendations. They play irreplaceable role in the field of promotion, public diplomacy and people to people connectivity. Participation in associations’ activities is voluntary.                                      

Remarkable achievements. CEE countries and China have made unprecedented progress in intensifying political dialogue on all levels, especially on the highest levels of heads of states and heads of governments. Following strategy of reforms and opening China made herself power house of the world economy and global factor of international relations. Thus, to be partner of China, to have regular dialogue with Chinese top leaders for CEE countries is significant not only for improving economic and other fields of cooperation but, also, to strengthen own international reputation, to balance international standing and, finally, to provide own place in the multi-polar world which emerged greatly thanks to China’s great contribution. In this regard, adoption of the documents to build strategic, or even comprehensive strategic relations, between China and CEEC is of particular importance providing stability of cooperation and the base for shaping future relations and processes.
In parallel, we witness daily vigorous intensification of cooperation in the people to people exchange. Apart from growing exchange o official delegations and business people, it should be noted that young leaders, artists, scientists, students, think tanks, dance groups, tourists, journalists and many others are amassing direct contacts spreading information, culture, understanding and friendship. Mutual political understanding, dialogue and economic cooperation, on one side, and intensification of the people to people exchange and friendship, on the other side, radiate synergy strengthening overall relations and comprehensive cooperation.

There are many of impressive achievements in mutually beneficial China-CEE cooperation. Regular freight railway connection Chengdu, China – Lodz, Poland, started operation in July 2013 (Chengdu Europe Express). A number of other direct freight railway connections have been established between Chinese, CEE and West European destination (Prague, Duisburg, Frankfurt, Budapest). “Land and Sea Express Line“ has been established between port of Shanghai, and heart-land of Europe. The Express Line’s hub is the Greek port of Piraeus from which the goods are transported by railways (or highways) via Skopje (Macedonia), Belgrade (Serbia) and Budapest (Hungary) to the Central and Western Europe. Direct flight connections between Beijing and a nuber of CEEC’s capitals (Warsaw, Prague, Budapest) are also in operation while some other air-flight connections are in preparation (Belgrade, Serbia).

Investments in industry and Energy sectors have been impressive. Chinese Wanhua Industrial Group invested in Hungary’s BorsodChem (1,6 billion USD); LiuGong Co. Machinery  acquired Poland’s Huta Stalowa Wola; China’s Railway Signal and Communication Co. became majority owner of Check’s Inecon tram producing Group; one of the largest Chenese and world steel producers HeSteel acquired Serbian Steel Mil Company in Smederevo (2016); “Great Wal” Car Factory was established in Bulgaria; Stanari and Tuzla Power Plants in Bosnia and Herzegovina financed and constructed by Chinese partners; Rovinary caol-burning power plant (600MW), valued at around 1 billion USD and Nuclear Power Plant (Cernavoda), both in Rumania, the first Chinese undertaking of the kind in Europe; Cmec Company is currently constructing Power Plant, “Kostolac B”(350MW), Serbia (700 m. USD); Hydro Power Plant Kozjak, Macedonia, is financed and constructed by Chinese partners.

Two of the main highways in Macedonia – Miladinovci – Stip (50km) and Kicevo – Ohrid (57km) valued at 730 million USD have been financed and constructed by Chinese banks and companies. In Serbia, after completing the Danube bridge “Mijalo Pupin”, Chinese partners, continued to build highways, bridges and tunnels including highway on the Corridor 11 connecting Serbia with Southern Adriatic (Montenegro).

Construction of high-speed railway Belgrade (Serbia)-Budapest (Hungary) (370km) is expected to start this coming November. When completed, new railway will reduce traveling time between the capitals of the two countries from present 8 to less than 3 hours.

The trade exchange between China and CEEC grew rapidly reaching volume of 60.2 billion USD in 2014 with realistic ambition to double the volume in five years. This goal was set in 2013 at the Bucharest China-CEE Summit.

In the past five years CEEC-China cooperation under OBOR has already become significant factor of economic growth, rise of employment and better life of the people in CEE countries. This is, at the same time encouraging and obliging, for all participants to continue upgrading and enlarging future cooperation, removing remaining obstacles and making closer Europe, China and Asia.  

The role of Balkan Peninsula countries. The Balkan is Southern-East European Peninsula boarded by Adriatic, Ionian, Aegean and Black Seas. According to the Encyclopedia Britannica the Balkan comprise Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia (FYROM), Montenegro, Rumania, Serbia, Slovenia, while Greece and Turkey are often included (depending on the definition). Its total area is usually given as 666,700 square km (257,400 square miles) and the population as 59,297,000 (est. 2002). The Peninsula countries are active participants in CEE-China format cooperation, except Greece and Turkey, which otherwise have very important roles in the implementation of OBOR Initiative but within bilateral frameworks of cooperation. Five of them (Bulgaria, Croatia, Greece, Rumania and Slovenia) are members of EU, while the rest of them are in various stages of candidate status for EU membership.

All the Balkan Peninsula countries have open market economic system of which are in the income range ($4,000 – $12,000 p.c.). The Gross domestic product per capita is highest in Slovenia and Greece (over $25,000), followed by Croatia (21,000) and then Turkey, Bulgaria, Romania, Montenegro, Serbia, Macedonia ($10,000 – $15,000), Bosnia and Albania (below $10,000). Generally, the unemployment is burning problem for the most of Balkan countries,, particularly affecting young generation where over 30% are unemployed. The lowest unemployment is in Romania (below 10%), followed by Bulgaria, Turkey, Albania (10 – 15%), Greece, Serbia (15 – 20%), Montenegro, Bosnia (20 – 30%), Macedonia (over 30%).
  (Political Map of the Balkan Peninsula: Nations on Line)

The Balkan Peninsula countries have been playing very important role in cooperation 16+1mechanism under OBOR, particularly in trade, infrastructure and investments. They have – interests, political will and potentials to further strengthen this cooperation.

Although, the interests may vary from one country to the other, for the most of the countries the key priorities concern modernization of cross border infrastructure, new industrialization with high, environment friendly technologies and renewable energy production.

Balkans possess great connectivity potentials, both, in physical and people to people sense. These countries control the direct land routes between Western Europe and South West Asia (Asia Minor and the Middle East). However, those routes, in many cases have become bottlenecks for the demands of contemporary transport and need modernization.

A number of sea ports in Greece, Turkey, Bulgaria, Rumania, Albania, Croatia and Montenegro make the Balkan countries well interconnected with ports and markets of Europe and beyond. Other countries, like Serbia, command significant potential in inland water international transport, primarily via Danube River, its tributaries and canals’ networks. Thus, the most of the Balkan Peninsula countries, if not all, may play important role in operation of “Land and Sea Express Line” as well as in the Three Seas sea-ports and inland water ports cooperation .

Over millenniums the Balkan Peninsula emerged as the juncture and meeting area of various civilizations, cultures and religions. In spite of turbulent history and periods of long occupation, countries of this the most southern part of Europe succeeded in maintaining unique openness for communication and interaction with other parts of the world, with other cultures, different societies and economies up to the present time.

To summarize characteristics of the Balkan Peninsula related to the nature and objectives of 16+1 format under OBOR cooperation the following may be of interest:

1. Favorable geographic position, for which the Balkan Peninsula is often considered the “gate to Europe”;

2. High connectivity potential in physical infrastructure– juncture of railways, highways, seaways, inland water-ways, airways connecting Balkan with all other regions of Europe, with Asia Minor (Turkey), Near East by railways  ,roads, seas or combined transport;

3. Sea ports and sea ways  conveniently accessible from/to Indian and Atlantic Oceans, Africa and other regions of the world;

4. Inland water ways (Danube-Rheine-Mein) connecting Black Sea with North and Baltic Seas, substantially cutting time and cost of transport;

5. Geographic position, social and cultural environment and already achieved high level of cooperation with China are good recommendations for the Balkan to host “BRI connectivity juncture park” combining sea and land roads, railways, inland water ways, even airways, in a flexible, comprehensive (regional) connectivity system;

6. Connectivity in the field of people to people exchange: for over 2.000 years the Balkan has been meeting and mixing ground of civilizations (Western, Eastern, Latin, Byzantine, Islamic), of cultures and religions – Christianity (Greek Orthodox, Catholic, Protestant), Islamic. It commands an open-minded, communicative spirit and thirst to learn other peoples’ history, cultures, and arts.

All the countries of the Peninsula command important potentials in tourism development and cooperation. Rich historic and cultural heritage still need to be broadly presented to tourists from China and countries along the OBOR. Tourism, most probably, will be the field to witness the most dynamic Cooperation of the Balkans sub region and China in the coming years.  

From the point of view of the Belgrade Forum for a World of Equals and the Silk Road Connectivity Research Center, as Serbian think tank, it would be viable to give some consideration to the idea of Three Rivers Comprehensive Development Project. As a trans-boarder project it would comprise: Danube, Morava and Vardar Rivers; Aegean Sea; the land valley stretching from Pannonia plains (Hungary, Serbia, Croatia), via Macedonia to the Greek Aegean Sea planes and Port of Thessaloniki. In addition to existing highway and railway lines passing along the Three Rivers (European Corridor 10), consideration may include development of the other important potentials such as water, irrigation, food and green energy production.