Hungary’s controversial Prime Minister Viktor Orban seems to enjoy baiting western world opinion whenever he gets the chance. He’s been known to cozy up to Russia’s President Vladimir Putin and he is perhaps the only remaining supporter of Turkey’s President Recep Tayyip Erdogan in the European Union. His long-running battle with Hungarian-American billionaire philanthropist George Soros is legendary.
This week he’s poking western Europe in the eye by hosting China’s Premier Li Keqiang for the sixth annual meeting of the Cooperation between China and Central and Eastern European Countries, or “16+1.” The 16+1 grouping links China with 16 central and eastern European (CEE) countries, 11 of them members of the EU. Orban is courting Chinese investment for a series of prestige projects, including a vague plan for cooperation in the healthcare industry and the troubled Budapest-Belgrade high speed rail upgrade.
Off the rails?
The Budapest-Belgrade railway project was launched with much fanfare the last time 16+1 was in Belgrade, in 2014. It was supposed to be finished in time for this year’s 16+1 meeting. So far it has gone precisely nowhere.
The Hungarian half of this high speed railway to nowhere is under investigation for breaking EU tendering rules. The Serbian half is apparently going forward, though where it will go without a connection on the Hungarian side is anyone’s guess.
Even if the railway does push through from Belgrade to Budapest, it’s not clear why anyone would ride it. Despite the fact that the current railway journey takes eight hours, there are only two flights a week connecting Belgrade and Budapest, and they’re run by Belavia, the Belarussian state airline. Google Maps makes it out to be a four-hour drive.
Other 16+1 hopes for big injections of Chinese money have also been slow to bear fruit. Earlier this year there was a lot of talk about China financing a new airport for Poland’s capital Warsaw, but nothing has come of it yet. Meanwhile China has reportedly set up a 10 billion Euro fund to finance CEE infrastructure projects, but in the year since the announcement was made, none of it seems to have been spent.
A lot of promises, but little cash
So just what does eastern Europe get out of 16+1? A lot of promises, it seems, and very little hard cash. Eastern European leaders like Viktor Orban are falling over themselves to attract Chinese investment (and in the process purchase a degree of autonomy from the European Commission in Brussels). China has promised them the Moon. But with budgets tight at home and more pressing foreign policy priorities in Asia, China has so far failed to deliver.
China’s outbound foreign direct investment in CEE remains modest and is concentrated in just a few countries. The headline list of projects completed to date seems to consist of a bridge in Serbia and two roads in Macedonia — and little else. Chinese firms have invested heavily in port infrastructure in Greece, but CEE dreams that China would use its Greek ports as gateways for the economic development of the Balkans have so far failed to materialize.
The 16+1 meetings may give CEE leaders like Orban a welcome opportunity to talk big with China, but it seems increasingly unlikely to deliver them any tangible benefits. The most 16+1 can offer CEE is perhaps a little better visibility among Chinese investors, for whom countries like Slovakia (population 5.4 million) and Slovenia (2 million) are equally obscure minor markets.
Western pundits routinely wring their hands over the possibility that CEE may sell out to China. Orban seems more likely to sell out to Russia, if he sells out at all. China still hasn’t committed the resources needed to have any serious political impact in CEE. China has put on a load of conferences, issued press releases, and subsidized yet more talking shops in the region, but it will have to spend a lot more if it wants to buy any real influence.