China’s rising influence in the Balkans

For years, China’s interests in the Western Balkans were predominantly economic. Recently, however, Beijing has increasingly made its influence felt in the politics of the region – usually in partnership with Moscow.

China and Russia have a common foe: the United States and its allies. In several areas, they have cooperated to thwart the West’s initiatives, including in the Balkans. Both stand in opposition to United Nations membership for Kosovo, and both recently opposed an initiative to keep an international peacekeeping force in Bosnia and Herzegovina at the UN Security Council.

Beijing and Moscow are likely to maintain this alliance in opposition to the Euroatlantic presence in the region. For its part, after having invested in “vaccine diplomacy” in the region, as well as providing loans for huge infrastructure projects (call it “loan diplomacy”), China is now demonstrating a “harder” type of foreign policy in the Balkans – exporting its authoritarianism through strategic corruption.

‘New Yalta’?

For years now, China has been building up its military might to match its growing global economic heft with the goal of becoming a superpower. A particularly striking example is its recently stated ambition to quadruple its nuclear arsenal.

With China’s continued rise, Russian President Vladimir Putin has frequently put forward the idea of a “new Yalta” system, in which the world’s great powers would have their own spheres of influence, with buffer states wedged in between. Recent events in Ukraine show that the Kremlin is working in this direction. According to Moscow, just as the leaders of the U.S., Soviet Union and the United Kingdom agreed on such an arrangement at the famous Yalta Conference near the end of World War II, the new alignment would be decided upon by Washington, Moscow and Beijing.

So far, however, this has not materialized, and Russia has sought to align itself with China, believing that such cooperation can protect its interests. The U.S. for its part, has responded by forming partnerships with like-minded countries around the world. It used this strategy most recently last year with the creation of a strategic alliance with Australia and the UK, dubbed AUKUS, aimed at containing China’s rise.

Increased engagement

It is at the UN Security Council where the China-Russia axis has been most active on Balkans issues. Both have veto power on the council and have warned that they will block any future decision for the region that they believe contravenes their interests. So far, they have been highly active on two issues: Kosovo’s UN membership, and an international peacekeeping force in Bosnia and Herzegovina.

On the former, Beijing has supported Moscow’s position, making for two vetoes on the issue. On the latter, China and Russia have jointly opposed having an International High Representative for Bosnia and Herzegovina. Both have also described the international peacekeeping force as “Western interference” in the country’s sovereignty.

This is a new development. China is not a signatory of the 1995 Dayton Accords that set the status quo for the region after the bloody wars of that decade, nor has it previously been involved in other political negotiations connected with the Western Balkans. This new involvement comes on top of its recent financing of big infrastructure projects, as well as its “vaccine diplomacy” providing Covid-19 shots to some Balkans countries.

Around the same time as China and Russia were banding together on Balkans issues at the UN Security Council, Chinese Foreign Minister Wang Yi visited the region, pushing forward Beijing’s Belt and Road Initiative and its 16+1 group to promote business and investment with Central and Eastern Europe. Notably, both Kosovo and North Macedonia were left out on the trip, though China is financing two highways in the latter. Both states have close ties to the West.

Also in late 2021, Taiwanese Foreign Minister Joseph Wu visited the Czech Republic and Slovakia and made an “unofficial” trip to Brussels, hoping to shore up support. For many countries, China has conditioned investment on not recognizing Taiwan. In the 1990s North Macedonia had recognized Taiwan but changed course a few years later. China will be watching this issue closely when it comes to its relations with countries in the region.

China’s Balkans partnerships

In the 1970s, China and Albania had extremely close ties, but the relationship cooled around the turn of the century. Now, relations are improving again, mostly through economic cooperation. In October, Albanian Prime Minister Edi Rama received Foreign Minister Wang in Tirana and said that his country “welcomed more Chinese investments.” He also confirmed that his country’s position on Taiwan was in line with Beijing’s.

China’s bilateral ties with Bosnia and Herzegovina have grown in recent years. Sarajevo has expanded cooperation with Beijing politically, militarily and culturally, but again, economics here plays the biggest role. Chinese entities have invested in several large infrastructure projects, including a 350 million euro loan from the China Development Bank for the construction of the Stanari coal-fired power plant. Chinese firm Dongfang Electric Corp built the facility.

Of all the countries in the region, Serbia is the closest to China. According to a recent poll by the European Council on Foreign Relations, some 91 percent of Serbians consider China an “ally or necessary partner” while only 57 percent see the European Union as such. According to publicly available data, Chinese infrastructural loans in Serbia have come to more than $8 billion.

Recently, Serbia contracted a Chinese company to build a 108-kilometer section of the Belgrade-Budapest railway – a project that is being partially funded by the European Union. When Foreign Minister Yi visited Belgrade in October, he said that the China-Serbia friendship stands “on the right side of history.” For his part, Serbian Prime Minister Aleksandar Vucic called China a reliable and valuable friend.

Montenegro is paying back a $944 million loan from China for the construction of a highway. In 2014, Montenegro took out the loan as part of a plan to build a highway from Bar, a port city on the Adriatic coast, north to the border with Serbia. The highway is now one of the most expensive in the world. The first stretch was supposed to have been completed in 2019 but was delayed due to the country’s failure to pay its loan installments. The Chinese financing represents more than one-sixth of the country’s gross domestic product (GDP), which was projected to reach $5.62 billion for 2021.

The EU ultimately agreed to help Montenegro pay off the debt, putting it on the hook for supporting at least two huge Chinese infrastructure projects (along with the Belgrade-Budapest railway), despite the bloc describing China as a “systemic rival.”

 Exporting authoritarianism

China is using its loan diplomacy to spread its authoritarian governance model in the Balkans. A recent report found that a drop in the quality of governance in the region coincided with China’s growing economic footprint. The dependence on Chinese investment, and reliance on its good graces when the debt bills get high, give Beijing immense political sway in the region. China has used “strategic corruption” through these investments to create or buy off regional “bosses” who have introduced authoritarian-style governance themselves.

Serbia remains the most vulnerable to this type of influence, from both Russia and China. Such was the conclusion of a recent study by GLOBSEC Policy Institute, a Bratislava-based think tank focused on international politics and security issues. On a scale of 0-100, with 100 being the most susceptible to Russian and Chinese influence, Serbia scored 66, the highest in Central Europe and the Balkans. For context, the next highest scoring country was Hungary, with 43.

Of the six Western Balkans countries, only Kosovo has no diplomatic relations with China, is therefore not part of its regional initiatives and has not taken out any loans from Beijing.

By Blerim Reka, former Minister in the Republic of Kosovo.

Source: Geopolitical Intelligence Services (GIS)