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Belt and Road Initiative and its Impact on Southeast Asia and Central Eastern Europe: Similarities and Differences

REGIONAL STRATEGIC AND POLITICAL STUDIES PROGRAMME SEMINAR

 
Tuesday, 26 February 2019 - Three experts from Palacký University Olomouc, Czech Republic, shared their perspectives on the similarities and differences on China’s renowned Belt and Road Initiative (BRI) in terms of its impact on Southeast Asia and Central Eastern Europe (CEE).


The panel getting ready to deliver the seminar.  (Credit: ISEAS - Yusof Ishak Institute)

Dr Maria Strasakova, Senior Lecturer at the Department of Asian Studies at Palacký University Olomouc and Associate Fellow with ISEAS - Yusof Ishak Institute, observed that China‘s BRI was initially launched to much fanfare and high expectations among the countries in Southeast Asia as well as in CEE due to the prospects of profiting from China´s economic rise, promises of substantial investments and other economic incentives.


However, more than five years on, Maria noted that the initial enthusiasm has to some extent given way to sobriety and wariness, as the implementation of BRI projects has encountered problems, such as the fear of economic dependency on China and falling into the “debt trap”, unattractiveness of the terms and conditions of Chinese loans, negative image of Chinese companies, strategic implications of BRI on the South China Sea dispute in Southeast Asia, as well as China´s efforts to gain access to strategic fields in CEE. In particular, Maria cited examples of stalled BRI projects in Malaysia, scaled down projects in Myanmar and Vietnam’s wariness to participate in BRI projects as examples of Southeast Asian countries’ wariness of the negative impact of BRI.



 Dr Alfred Gersti, Mr Lye Liang Fook, Dr Maria Strasakova and Dr Richard Turcsanyi (Credit: ISEAS - Yusof Ishak Institute)

Dr. Alfred Gerstl (researcher at the Department of Asian Studies at Palacký University Olomouc and currently on a Marie Skłodowska-Curie Individual Fellowship) dwelt on ASEAN’s response to BRI and compared it with the response of CEE to BRI. Alfred explained that the CEE plus One (i.e. China) mechanism, comprising a number of the European Union newer and poorer members that were selected by Beijing, was established in 2012. Alfred opined that initially all the 16 CEE countries held a positive view of the BRI but now some of them were increasingly critical of the impact of BRI. He cited the example of the Belgrade to Budapest High Speed Rail Line which was agreed to by China, Serbia and Hungary in 2013 and had now run into difficulties as it may have broken the EU rules on public tenders. He also brought up the example of the report by 27 of the 28 national EU ambassadors to Beijing (with Hungary abstaining) in April 2018 that criticized the BRI as running counter to the EU agenda for liberalizing trade and for unfairly subsidizing Chinese companies.


Dr Richard Q. Turcsányi (Senior Researcher at Palacký University Olomouc and Assistant Professor at Mendel University in Brno and Program Director at the Institute of Asian Studies in Bratislava) took a broader perspective and examined China’s approach to CEE, Africa, Latin America and the Middle East. He observed that China’s FDI flows were mainly concentrated in Western Europe, particularly in France, Germany and the United Kingdom and comparatively very little flowed to CEE. In CEE, China’s focus was on financial loans that were linked to infrastructure projects. He was of the view that the CEE plus One mechanism was not a very effective mechanism for individual CEE countries to engage China as each country had only about 10-15 minutes (with translation time included) to meet with the Chinese leader. He also shared the observation that the interaction among CEE countries and China was almost entirely about economic benefits with the former having limited genuine attraction towards China.


The attentive audience during the seminar asked good questions. (Credit: ISEAS - Yusof Ishak Institute)

The presentations by the three speakers were well received by the audience. During the Question and Answer Session, there were questions ranging from the “debt trap” arising from the BRI, China’s assertiveness in general, the Czech Republic’s view of China, Russia’s relations with CEE apart from that of China, to whether Europe as a whole understood the Chinese business culture and Europe’s position on the Huawei episode. On the “debt trap”, Richard did not think that China had a coherent policy on getting other countries into such a trap. The recipient countries, in his view, also had a responsibility to negotiate the proper terms of the agreement before agreeing to collaborate on the BRI.