There is no talk of China in Bulgaria, but it is quietly penetrating the municipalities – World
Pragmatic, without breakthroughs and with small economic benefits, but also without a strategy for China. That’s right describe relations between the Asian giant and Bulgaria over the past decade in the study published by the Friedrich Naumann Foundation and the Sofia Security Forum this week.
In the report with an author network of national experts and compilers Plamen Tonchev and Mirela Petkova there is talk of China’s interaction with Southeast Europe now. In the section on Bulgaria, it is noted that Beijing’s charm generally does not work in attempts to develop a framework for cooperation to work towards a specific goal. Bulgarians’ interest in China is less than in other countries in South-Eastern Europe, although there are also people who see interaction with China as an opportunity for Sofia to strengthen its international positions.
As a result, China has harnessed its efforts to change the preferred method of cooperation – from intergovernmental to commonwealth states – 7% of which have cooperation agreements with their counterparts in the Asian giant. In municipal asymmetries in opportunities, it turns out to be unavoidable, and municipal and non-governmental actors such as agricultural institutes and universities welcome the economic promises with open arms.
Bulgaria: No success
Bulgaria is failing to capitalize on its promising growth potential through cheap labor and geography, says the Bulgaria piece written by Mirela Petkova. Only 61st out of 190 in doing business and fears of corruption and an inefficient justice system a problem for investors.
China finds itself in a difficult position in sectors such as energy (due to Russia) and road construction (due to “shadow local companies”). Attempts by players such as China Communications Construction Company (CCCC) are trying to enter the market – for example, to build the tunnel under the Shipchen Pass or the Ikhtiman – Kostenets railway link, but they lost to local companies.
China is not even among the top 20 investor countries, it is the seventh largest holder and the eighth exporter (up only two places in the last six years). Addressing the lack of significant investments in critical infrastructure, mainly in agriculture and production. A large part of the Chinese investments have either not materialized, or there is no information about their fate following their election announcement, the report continues (examples are given such as the intention of China Machinery Engineering Corporation to participate in a project to develop the port of Varna). Bulgaria does not make active attempts for cooperation and joint projects, although there is an idea for such.
No scandals, but…
China is absent from the public debate, its image is not tarnished by scandals, it is covered uncritically in the media. Topics such as human rights violations in Xinjiang are not actively discussed and have not provoked a serious public pushback (even the pro-China position on the topic is represented by the “fringe” online media). Modern newspapers such as “24 Chasa” present content from the state television CGTN, according to which China does not have a problem with Islamophobia, but with terrorism.
Despite the cooling at the national level, China’s unfulfilled promises do not affect its public perception. It cites a 2022 Eurotraveler survey, according to which 50% of Bulgarians view China positively (compared to an average of 22% of Europeans) – an increase compared to previous surveys. However, socio-political appeal is lacking – China is liked for pragmatic reasons.
At the same time, “the political landscape in the country allows Chinese companies to penetrate the micro level of municipalities and universities and create frameworks for cooperation with local elites,” writes Petkova. It notes that out of 265 municipalities, 19, or 7%, already have agreements with their Chinese counterparts. Over 140 agreements have been signed between Bulgarian universities and their Chinese counterparts – mainly around student exchange, joint research activities and publications.
More research is needed on cooperation in the security and justice sector: for example, in cases like the extradition of a Chinese citizen suspected of corruption, an attempt to deport Uighurs despite the risk to their lives and donations from the Chinese Embassy in Sofia to the Foreign Ministry. “These developments are significant as the Bulgarian authorities wish to cooperate with their Chinese counterparts without attracting attention.”
The report also recommends developing regulations for cooperation with third countries in the academic, research and agricultural spheres where China interacts with Bulgaria, but also to make efforts to fight corruption and ensure the rule of law.
In the region: controversial results
The summary for the region notes that all countries should benefit from good strategies for China because of its potential as both a source of investors and a huge desired market, but this should be with consideration of both the cost and the long-term impact on Chinese investment – Beijing pursues its own interests.
Given the region’s need to upgrade its infrastructure and industrial base, China’s appeal can be attributed to its economic weight, its growth over the past two decades, and the expectation of two benefits: investment in infrastructure and industry, on the one hand, and growing size to the vast Chinese market on the other.
The problem with this vision is that Chinese investments (with the exception of the port of Piraeus, Greece and some mining and metallurgical projects in Serbia) are mainly in construction, the contracts go to Chinese companies, and the projects are implemented with Chinese loans. Despite the negligible share of Chinese participation in Bulgaria, Romania and Albania, the region reports larger amounts of Chinese loans and investors from other countries in Central and Eastern Europe, but they too remain far below expectations. Beijing supports them with a China-Central and Eastern Europe format, but the talk of the “Chinese population” and promises do not match the investments.
There is also the understanding of the controversial nature of projects with Chinese participation – often opaque, awarded without tenders, insufficiently compliant with the state’s environmental or labor standards. For the more shadowy of them, the legislation is not applied, and there is a lack of political will to clash with Beijing on controversial issues.
The Serbian exception
The results in the second direction – trade – are also limited. The region remains in the economic orbit of the lowly union, and while its sum to China is growing, it remains marked by a severe imbalance.
Despite all this, China’s image in Southeast Europe is better than in other parts of Europe – especially in Serbia, although it is shaped by state-controlled media there. Romania is the most reserved, and the difference in attitudes between the two main components of Bosnia and Herzegovina – the Federation of Bosnia and Herzegovina (populated by Bosniaks and Croats) and the Republika Srpska (Serbs) is distinct.
However, the majority of residents in the region would probably be reluctant to support the introduction of Chinese governance standards and are not enamored of the one-party system despite criticism of the efficacy of Western democracy and the way the EU keeps its promises – especially in the Western Balkans. The delays and the ambiguity of the European perspective in the Western Balkans certainly have a negative impact on attitudes towards Europe.
The imprint of Beijing’s public “vaccine diplomacy” is ambiguous – from the time when, at the beginning of the pandemic, the only Chinese vaccines were available in the Western Balkans. Serbia and North Macedonia can be considered exceptions.
Only the titles of the chapters on Serbia (“Serbia and China – steel friendship”) and the Republic of Bosnia and Herzegovina (“Republika Srpska – China’s support in Bosnia”) create an impression of good and promising relations. Bosnian Serbs are much more positive (79%) toward China than Bosniaks (40%) and Croats (42%), according to the cited survey.
This is largely a product of the “illiberal turn” in Serbian politics, of course with the deterrent effect of Belgrade-Beijing ties, which makes the EU cautious in its criticism. The pro-China narrative comes primarily not from the government in Beijing, but from the pro-government media in Serbia. This is also the reason for the highly positive reputation of China in Serbia, which, however, is familiar with the actions of “local Serbian actors”. Without a serious and well-organized opposition, the efforts of the EU and civil society, the revealed picture cannot be changed.
Between 2010 and 2020, 4.28% of direct investments in Serbia came from China – after the EU (67.5%) and the single-digit expression of Russia and Switzerland. The biggest greenfield investment in Serbia – 1 billion dollars – is in a Chinese tire factory in Zrenjanin. By the end of 2021, investments from China in Serbia are over 3 billion, Beijing’s infrastructure loans – 8 billion. There is a commitment to a free trade agreement between the two countries, but the violation of the trade deficit with China Serbia will hardly penetrate the large and demanding Chinese market. As of 2021, China forms 43% of the entire Serbian national deficit, with over 70% of Serbia’s amount to China being copper owned by the Chinese company RTB Bor.
In the Bosnian case, however, there has been talk of “big promises and little money” over the past decade – after all, the process has only started in the last two years. Most of the projects are in Republika Srpska, as in the construction of the big ones both there and in neighboring Serbia, the same big company is involved.
The authorities in Banja Luka are constantly talking about memorandums of deals with China, but with too many investments of 1 billion euros from the Asian giant, according to the Balkan Network for Investigative Journalism, the total value of the projects, agreed and only announced, reaches 5 billion. , but the real value is difficult to estimate. In Banja Luka, they negotiate directly with the Chinese companies, and the contracts, shrouded in secrecy, raise doubts – what the company will get, what it will cost the taxpayers, the conditions for foreign workers. No major Chinese project has yet been completed in Bosnia.