China’s Belt and Road Initiative (BRI) continues to embrace and connect China with European Union (EU) Member countries; the latest in 2019 with Italy, a G-7 member, also joining. EU members participating in the BRI include Poland, Greece, Italy, Hungary, Czechoslovakia, Croatia, Bulgaria, Latvia, Portugal, Romania, and Slovakia. While Germany and France lead the EU in trade and investment with China, political winds may be blowing. The EU has noticed that the seventeen Central and Eastern European countries (CEEC) under the “17+1” format, a majority of which are EU members, are capturing greater amounts of Chinese trade under their BRI cooperation agreements; CEEC trade reportedly totaling over $82 billion in 2018. EU officials are increasingly critical of the 17+1 and wary that the mechanism could further undermine and divide EU unity on policies toward China.
In 2016, the European Commission Joint Communication on Elements for a New EU Strategy on China insisted that any bilateral relations with China—including in-group settings such as the 17+1 format—should be coordinated with the EU to ensure that relevant aspects are “in line with EU law, rules and policies, and that the overall outcome is beneficial for the EU as a whole.” Current EU policies and regulations require that process.
Poland is one of the largest countries in this group and has important ports along one of China’s strategic BRI corridors. Chinese investments in Poland were estimated between 130 million and one billion Euros from 2016 to 2017. Poland offers China several assets—proximity to key partners in Western Europe, access to the sea or convenient road and rail connections, and access to a qualified workforce.
Labor issues are also a factor in Chinese investment in Poland and the CEEC. Chinese investors, particularly the large SOEs, frequently bring much of their own workforce with them. Poland and other CEEC with low wage levels have been experiencing a labor exodus of Central and Eastern Europe (CEE) workers and an introduction of many foreign workers. With the wage levels in China and Poland not so disparate, both factors could allow a positive fit under BRI.
Attention is given to the relevancy and implications, including legal limitations on foreign trade agreements (FTA) for EU members in the CEEC, relevant EU Directives, and international treaties influencing a future EU-China FTA.
Discussion includes whether Poland and the CEEC/17+1’s developing BRI relationship with China might divide the EU or facilitate a pathway to an eventual EU-China FTA which places trade and investment under the EU. This could diminish the competitive labor advantages of Poland and the CEEC.
Ronald C. Brown,
China’s BRI in Central Eastern European Countries: “17+1” Connectivity, Divisiveness, or Pathway to EU-CHINA FTA?,
San Diego Int'l L.J.
Available at: https://digital.sandiego.edu/ilj/vol22/iss1/2