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Re-imagining the Silk Road: Chinese Investments in the Balkans – Introduction

0 Comments 🕔14.Dec 2015

This article is part of our feature Re-imagining the Silk Road.

An 1830 image depicting a caravan on the Silk Road. Source: Wikimedia Commons.

 

by Bela Belojevikj

To many Western observers, the Silk Road, the ancient trade route connecting the Asian and European continents, evokes images of scenic beauty and exotic adventures. From the adventures of Marco Polo to the recent Netflix series that bears his name, the Silk Road has long been described as a route of commerce, traversed by fortune-seeking merchants, bandits, and the occasional army.

But the history of the Silk Road does not end there. As this new CritCom feature reveals, its legacy has been revived by the increasing inflow of Chinese investment on the European continent; in the age of financialization, the new Silk Road appears as an assemblage of high speed trains, highways, and technological ports connecting East and West.

But what are the causes and consequences of the recent re-emergence of the Silk Road? The contributions collected here explore various aspects of the Silk Road, which is both a strategy and a set of physical investments at the periphery of the European Union. This research sheds light on the growing economic and strategic importance of the Chinese presence in the Balkans and other Eastern European regions, a phenomenon that has received very little attention despite its relevance for the balance of global power.

Broadly, these short articles address one major question: What motivates Chinese investment in the region? As Graham Hollinshead stresses, despite the rhetoric of a Sino-Serbian friendship, there are more prosaic reasons for massive infrastructural investments. Yanko Yordanov rightly emphasizes that these have a lot to do with preserving economic growth by enhancing commercial networks and relations at a time of crisis in global manufacturing. Dragan Pavlićević brings to our attention another interesting fact: the Chinese government increasingly shifts to financial strategies for producing more profitable investments.

The recent wave of instability that hit the Chinese stock market and its rumored real estate bubble signal that Chinese investments cannot simply be reduced to political will. And, in fact, observations conducted by Sophie Meunier on the Chinese-operated port of Piraeus confirm that while the Chinese takeover certainly had strategic implications, its operation of the port has increased its efficiency and brought in new technology and contracts with major international corporations. Paradoxically, China is taking advantage of potentially profitable enterprises and infrastructures that have been neglected by states as a consequence of the EU-imposed politics of austerity – nowhere is this better illustrated than in Greece, as Pantelis Sklias stresses. In this way, this feature analyzes not only Chinese strategies and interests in the Balkans and CEES; the authors also stress what’s in it for countries that have been impacted by a series of crises, from the collapse of the Soviet Union to the world financial crisis and the European debt crisis.

Should the EU be alarmed by Chinese investments? Wade Jacoby and Kong Tianping provide us with detailed accounts of the types of investments that are really being pursued by Chinese companies; they demonstrate that most of the money is being directed towards greenfield investments and not the manufacturing industry. Showing the increase of foreign direct investment (FDI) inflow into the Balkans and Central and Eastern European states (CEES) does not only undermine semi-nationalist discourses about a “Chinese takeover,” but also reinvigorates a critical perspective on the differential integration and participation of these countries in the EU project. Maybe China is not the enemy after all.

With that in mind, as Vangeli shows, China also faces significant risks in investing in this region: instability and political turmoil in societies that have gradually transformed into illiberal regimes, such as Macedonia, have the potential to create both political and financial problems for China as well as for Macedonian citizens, as recent events in the city of Kumanovo indicate. Together, these articles provide useful insights into one of the major transformations of our century at a critical moment of political and financial instability.

 

Bela Belojevikj is an Editorial Associate at the Council for European Studies.

 

This article is part of our feature Re-imagining the Silk Road.

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