China provides 3 billion USD for CEE investment projects

Li KeqiangChina will provide 3 billion USD of funding for development and investment projects in Central and Eastern Europe. This was announced by Chinese Prime Minister Li Keqiang on Monday at the sixth summit of the Heads of Government of the countries of Central and Eastern Europe and China.

“Under the auspices of China-CEEC interbank association to be inaugurated today, China Development Bank will provide 2 billion EUR (2.39 billion USD) equivalent of development financial facility”, said Li Keqiang. “The second stage of China-CEEC investment cooperation fund has been launched with a capitalization of 1 billion USD, most of which will be channeled to CEE countries”, added the Prime Minister.

At today’s sixth summit of the countries of Central and Eastern Europe and China, Hungary will launch a tender for the reconstruction of the Budapest-Belgrade railway line. The project is financed mainly by China, informs AP, BTA reports.

In its latest issue, however, the Financial Times has a wide-ranging analysis of the Southeast European Summit of 16 + 1, which is opening today in Budapest. According to the publication, Beijing’s activity in this region and the counter-sympathy with which Chinese projects and aspirations are welcomed in the capitals of the Eastern European countries give rise to suspicion in the old West European capitals.

The daily quoted unnamed diplomats as saying Beijing could take advantage of the poorer Eastern European enthusiasm to deploy massive infrastructure projects with unlimited Chinese financial resources to undermine European Union (EU) rules and further exacerbate already-growing tensions East-West in the union itself.

According to another senior European diplomat who also wished to be anonymous due to the delicacy of the topic, the 16+1 format deals with many things, some of which affect EU competences, or it is entering new areas where there are already common EU-China initiatives.

From 2009 to 2014, CEE countries’ exports to China grew by 173%, while total trade exchange with China grew by 86%. In the first four months of 2017, CEE countries exported 5.48 billion USD worth of product to China, marking an 18.9% increase year-on-year. Every year, over 800,000 Chinese tourists spend their vacations in CEE countries, with countries like Bulgaria witnessing a 50-percentage-point surge in visitors year-on-year in the first half of 2017. Furthermore, over 8 billion USD of investment has been brought into the region due to China’s Belt and Road Initiative, according to figures from the Chinese government.