China’s increased engagement with the six non-EU countries of the Western Balkans affects the EU’s ability to shape the policy context (that is, to shape parameters of the choices another country can make) and conduct (that is, to affect concrete actions or choices) of governments in the region. At the same time, Chinese and EU economic engagement does not need to constitute a zero-sum game in which gains by one mean losses for the other. Efforts by the two great powers aimed at economic development and regional stability can be potentially mutually reinforcing. China’s most important strategic objective for the WB region, building the Land–Sea Express Route, can provide the region with a more central role in transport networks that connect Central Europe to Asia and East Africa. This, in turn, can help the region attract more foreign direct investment, both from Chinese and non-Chinese sources.
Whether and to what extent China’s involvement is actually compatible with EU interests depends on the conditions under which such involvement takes place. This Clingendael Report shows that activities by Chinese actors in regard to the Western Balkans are to some degree incompatible with the EU acquis and EU standards. This relates to a variety of domains, including public procurement, state aid, environmental sustainability and human rights. China is relevant not only for the behaviour of Western Balkans governments in these domains, but linkage formation with China also weakens (somewhat) the EU’s bargaining position, as governments in the region have an increased opportunity to play the EU and China against each other. Moreover, linkage formation with China provides politicians in the Western Balkans with new avenues for established practices of corruption.
To date, there are no signs that the political leaders of the EU and EU member states are interested in disengaging economically from China. Moreover, China may be expected to continue to respond to the demand for economic development in the WB6, especially as a provider of infrastructure development, and particularly if EU institutions refrain from doing so. In other words, China will remain a significant economic actor both in the Western Balkans and within the EU, with which the EU will need to continue to deal. This poses a dilemma for the EU. To draw the Western Balkans closer, the EU needs to show that it is able and willing, to an important extent, to meet the demand for economic development. At the same time, the EU needs to stick to its own standards. To address this fundamental dilemma, this Clingendael Report makes a number of recommendations.
Policy recommendations for the European Union:
The EU should acknowledge the (economic) interests of the WB6 and provide alternatives for cooperation with China. The European Commission’s upcoming economic investment and development plan for the Western Balkans can create a basis for such an approach.
At the same time, the EU should use a more effective enlargement process to mitigate potential negative effects of increased Chinese–Western Balkans engagement. The revised enlargement methodology, with its increased attention for political steering, is promising in this regard. EU institutions and EU member states should take the implementation of the revised methodology seriously in order to ensure its effectiveness.
The EU would do well to increase its efforts to ensure that when there is Chinese economic engagement, it is in accordance with EU standards, rules and values, especially with regard to the EU’s good governance agenda and EU rules on public procurement. It could do so by employing its vast institutional, political and economic linkages with the WB6 to communicate clearly and consistently when engagements with China are contrary to the WB6’s obligations under the Stabilisation and Association Agreements and that accepting different standards than those of the EU strongly disturbs the WB6 countries’ path towards EU membership.
The attractiveness of EU funding for infrastructure development is negatively affected by the conditions attached to it. While the EU should not do away with bureaucratic rules that guarantee the feasibility, transparency and environmental sustainability of projects, it could offer increased operational support to the WB6 to meet the demands attached to funding.
Given the high prevalence of corrupt practices in China itself (and despite an ongoing anti-corruption push by the Chinese government), linkage formation between China and the Western Balkans will continue to offer incumbent governments in the region with opportunities to retain locally established practices of corruption. Vulnerable institutions, with the judiciary being the prime example, are crucial to the ruling parties' abilities to profit from contracts not disclosed to the public, as Chinese contracts have frequently been. While the EU offers a framework and financing for the rule of law, anti-corruption has only sporadically been on the agenda of high-level political dialogue, exerting little pressure on ruling parties. Reinforcing dialogue on (high-level) corruption, and clear condemnation of corrupt practices in written documents such as the EU non-papers on Chapter 23 and the Annual Enlargement Package, will remain key in this regard.
It remains vital for the EU to communicate clearly the benefits of the standards it seeks to diffuse in the Western Balkans, both to governments and to citizens. Especially in those fields where alternative standards are incompatible with the EU membership objective of the WB6, such as environmental protection or privacy and data protection, the EU should step up its communication.
Intra-EU initiatives aimed at preventing or discouraging Chinese acquisitions that have negative long-term implications for the European Union’s strategic autonomy should be aligned with the fact that the non-EU countries in the Western Balkans are preparing for EU membership. The EU should condition progress in the accession process on a mechanism for such alignment that converges long-term strategic interests of both the EU and individual WB countries in ways that are politically feasible and acceptable today for those countries (prior to their membership) and in the longer run (once they are members) for the EU as a whole.
Public procurement rules only work if they are consistently applied. The European Commission should therefore monitor when state-to-state deals circumvent public procurement law through lex specialis procedures, and should clearly condemn such instances, as well as follow up its political condemnation with action.
Policy recommendations for the Netherlands:
With its China policy paper of 2019, the Dutch government took an important step towards establishing a comprehensive China strategy. The Netherlands should keep developing all aspects of such a strategy, including its approach towards intra-EU debates on relations between the European Union and China in regard to the WB6.
Within the EU, the Netherlands is one of the EU member states most actively promoting the rule of law and standards of good governance. At the same time, increased linkage formation between China and the WB6 directly impacts those standards. Given the path towards EU membership on which the WB6 find themselves, the promotion of EU standards is as important in the WB6 as within the EU. The Netherlands could therefore step up its political prioritisation of the EU enlargement dossier, and is in a well-placed position to ‘lead by example’ with regard to the rule of law, media freedom and other issues.