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China: New Guidelines for Cooperation Signed with Central and Eastern European Countries

(Dec. 29, 2014) On December 16, 2014, China and Central and Eastern European (CEE) countries agreed to the Belgrade Guidelines for Cooperation Between China and CEE Countries. Under the Guidelines, the parties will expand trade, investment, and economic cooperation and oppose protectionism. (China, CEE Countries Outline Blueprint for Further Economic Cooperation, CCTV (Dec. 17, 2014).) The Guidelines were announced in Belgrade at the third meeting between China and the CEE countries, held on December 16 and 17. (China Boosts Investment in Central and Eastern Europe, EURACTIV (Dec. 19, 2014).)

The Guidelines also:

• support the establishment of the executive body of the China-CEEC business council in Warsaw, Poland, and urge “relevant business organizations from both sides to cooperate on a voluntary basis;”

• welcome the founding of the secretariat of the contact mechanism for China–CEE investment promotion agencies in Beijing and Warsaw;

• support the role of Bulgaria in leading joint efforts to set up a Chinese-CEE consortium on promoting agricultural cooperation in the first half of 2015;

• call on the parties to fully utilize US$10 billion in special loans and other financing tools, provided by China, for the promotion of trade and economic cooperation between China and CEE countries;

• back the signing of currency swap agreements between China and Hungary and Albania, with the use of RMB by business circles as the settlement currency in cross-border trade and investment; and

• note the parties’ “common will to boost cooperation in science, technology, innovation, environment protection and energy, among other fields, pledging to deepen people-to-people exchanges and cooperation at various levels.” (China, CEE Countries Outline Blueprint for Further Economic Cooperation, supra; Text of the Guidelines, XINHUA (Dec. 17, 2014) (in Chinese).)

China announced the provision of new funds to pursue new ventures with the CEE countries, “stressing that the cooperation will be in line with European standards.” (China Boosts Investment in Central and Eastern Europe, supra.) Some analysts view strengthened cooperation between China and CEE countries as the creation of “a new ‘Silk Road'” others see it as a means for China to enhance its presence in the greater European Union market. (Id.) While CEE countries hold that the ties with China should first enable investment in infrastructure and energy projects, needed during an economically difficult time, analysts argue “that it is questionable how profitable those projects are, given that they are carried out by Chinese companies with Chinese loans, although the loans are favorable.” (Id.)

The most discussed project at the summit was the modernization of the Belgrade-Budapest railroad, in connection with which China, Serbia, and Hungary signed agreements at the meeting. The project, which would cost between €1.5 and 2 billion (about US$1.8-$2 billion) and shorten travel time from 8 to 2.4 hours, is scheduled for completion in two years, with a subsequent planned extension to Skopje and then Athens. China sees the railroad as an eventual “land and maritime express line” between China and Europe. (Id.)

The first China–CEE meeting was held in Warsaw in 2012; the second was in Bucharest in 2013. The 2015 session may be held in Beijing. Aside from being attended by delegations of officials from participating states, the summit meetings are also attended by businessmen from both sides; at the Belgrade summit, representatives of nearly 500 companies reportedly took part. (Id.)