Learning from China
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        • China lacks innovation? Take another look
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        • Why China won't suffer a Western type financial crisis
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Learning from China - Blog

China's increasing impact in Central and Eastern Europe

27/11/2017

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The Financial Times carried on 27 November a long article on China's increasing impact in Central and Eastern Europe under the self-explanatory title 'Eastern Europe’s China pivot'. Unfortunately for copyright reasons it is not possible to republish the article and a subscription to the FT is necessary to read it. However the general analysis of China's impact can be understood from the following excerpts:

'In Hungary it is hailed as the “Eastward Opening”. Serbian authorities see it as the glue in a “reliable friendship”, while the Polish government describes it as a “tremendous opportunity”. ... the 16+1, a grouping of 16 central and eastern European countries led by China... [is a] catalyst for... China’s ability to finance and build the roads, railways, power stations and other infrastructure that some poorer central and eastern European countries need....
Picture


​'as the 16 countries — Hungary, Bulgaria, Romania, Poland, Bosnia and Herzegovina, Serbia, Croatia, Slovenia, Slovakia, Albania, Macedonia, Montenegro, Czech Republic, Lithuania, Latvia and Estonia — prepare for an annual summit in Budapest on Tuesday, it is clear that Beijing’s star is rising in central and eastern European nations.

'“The world economy’s centre of gravity is shifting from west to east; while there is still some denial of this in the western world, that denial does not seem to be reasonable,” Viktor Orban, the Hungarian prime minister, said in October. “We see the world economy’s centre of gravity shifting from the Atlantic region to the Pacific region. This is not my opinion — this is a fact.”

The lure for central and eastern European nations is clear. Since 2012, Chinese companies, backed by state banks, have announced an estimated $15bn in investments in infrastructure and related industries, according to data collected by the Center for Strategic and International Studies, a Washington think-tank, in co-operation with the Financial Times. “To China, the 16 countries are important in their own right but also as a bridge into the EU,” says Jonathan Hillman, director of the CSIS Reconnecting Asia Project...
​
'Serbia, with which China has a “comprehensive strategic partnership” and an “all-weather friendship”, is due an estimated $1.9bn in infrastructure investments, according to the CSIS data. Hungary, with which China officially has a “high level of mutual trust”, has been promised an estimated $1.5bn. Milos Zeman, the Czech president, last year described his country — with whom some $3bn worth of deals has been announced — as “a gateway for the People’s Republic of China to the EU”.'

The evidence of China's increasing impact in Central and Eastern Europe is therefore clear from the article despite the fact that unfortunately its authors, James Kynge and Michael Peel, instead of welcoming this 'win-win' outcome for both Central and Eastern Europe and China, spend a lot of time criticizing it both on political grounds and quoting unsubstantiated charges China is trying to compete with existing international institutions.

In addition to the interest of the FT's clear statement of China's increasing impact in Eastern Europe readers may therefore be interested in the comment I have put on the article:

'The article cites "Jonathan Hillman, director of the Reconnecting Asia Project at the Center for Strategic and International Studies. “Under both the 16+1 and the Belt and Road, China is the common denominator. To shift from balancing against existing institutions to effectively competing with them, [Beijing] will need to deepen these parallel structures.”

'But there is no indication China wants to create, or has any strategy, for competition with existing structures. What it states it wants, and is consistent with its actions, is appropriate weight for its new economic position within existing structures. The AIIB, which in any case is not a competition for existing structures, was created only after a long period of failure to adequately reform the IMF and World Bank - in particular an inordinate delay of the US Congress in ratifying changes to the IMF which were agreed by governments during the international financial crisis.

'As regards economic strategy as China is demonstrably producing faster growth than the EU the Central European countries can scarcely be blamed for wanting to learn from China's success.'

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  • Home
  • Economy
    • Economic development & China >
      • Economic growth & human well-being - the example of China
      • China is the greatest economic growth in human history
      • Why China's social achievements are even greater than its economic ones
      • Why China will grow rich long before it grows old
      • China faces slower Western growth than in the Great Depression
      • China's 'socialist development strategy' outperformed Western alternatives
      • Why did China grow so fast?
      • Why are China and India growing so fast?
      • The 'Belt & Road' region will be the main locomotive of the world economy
      • Growth in the G7 'Great Stagnation' Will Be Slower than in the Great Depression!
      • What China achieving 'moderate prosperity' means for itself & the world
      • China is now the main pillar of globalisation
      • Solar power illustrates China's manufacturing future
      • Why China has made the world's greatest contribution to increasing human rights
      • Socialist policies can help famine-stricken countries
      • Here’s why China and BRICS will drive global economic growth
      • BRICS are more important for world growth than the G7
    • Economic theory >
      • China's & Western economic theory >
        • Deng Xiaoping & John Maynard Keynes
        • Deng Xiaoping - the world's greatest economist
        • Why Adam Smith’s ‘classical theory’ correctly explained Asia’s growth
        • The global significance of China's discussion on the economy's 'supply side'
        • China lacks innovation? Take another look
        • A Copernican Revolution in Western economics & China’s supply side reform
        • Why Chinese neo-liberals are forced to falsify world history
        • Why China won't suffer a Western type financial crisis
      • Macro-economics & growth theory >
        • A damaging confusion in Western economics books
        • To become a high income economy China needs to study facts not myths
        • How Singapore achieved a higher per capita GDP than the US
        • The most important book on economic growth to have appeared for many years
        • Why do Western economies have hard landings but China doesn't?
        • Reality & myth of the US 'internet revolution'
      • International monetary system >
        • Europe's crisis & the Euro - predicted in advance
        • The limits of RMB internationalisation
        • China is right to maintain & tighten capital controls
      • China vs the errors of 'shock therapy' >
        • Why the economic reform succeeded in China & will fail in Russia
        • An economist's Mein Kampf
        • How IMF policies helped oligarchs loot Russia - lessons for China and other countries
    • 40 years of 'reform and opening up' >
      • Part 1 – The factual results of reform and opening up
    • US Economy & China >
      • Why neo-liberalism destabilised US politics
      • Why the US remains locked in slow growth
      • Economic logic behind Trump's foreign policy - the key countries are Germany &China
      • Trump's economy - cyclical upturn and long term slow growth
      • Economic data shows claim of US 'strong economic recovery' was a myth
      • The damaging blind alley of US protectionism
      • US economic growth under Trump - explained in 3 charts
      • China's economy is growing three times as fast as the US
      • The ‘Anglo-Saxon’ political crisis - from Reagan & Thatcher to Trump & Brexit
      • Why the US turned protectionist - while China defends an open global econmy
      • Why Trump won’t persuade Apple to produce the iPhone in the US not China
      • The American Way leads to Americans dying early
  • Foreign Policy
    • China's international relations >
      • China & India >
        • A 'must read' article on current China-India disputes
      • China & Russia >
        • Good China-Russia relations are the guarantee of world peace
        • Increasing interest in Russia in China's economic policy
        • What is really behind Trump's obsession with Russia
      • China & the US >
        • Why 'China bashing' is a disaster for the US people
        • Why a US-China ‘Thucydides Trap’ can be avoided
        • The real reason for the US South China Sea provocation
        • The real sinister relation of the US & 'jihadism'?
        • The neo-con forces behind Trump's Twitter attacks on China
        • Why the US not China threatens world peace
        • The new shape of world politics - disorder in the West, stability in the East
    • Theoretical bases of China's foreign policy >
      • Theoretical bases of China's "win-win" foreign policy concept
      • Hamburg G20 Summit highlights China's 'thought leadership'
      • How Xi Jinping’s Marxism out-thinks the West
      • One year on, impact of Xi's agenda-setting Davos speech still felt
  • China Analysts
    • New economic data shows diorientation of US foreign policy analysts
    • China's GDP data destroys ‘hard landing' myth again
    • Wrong analyses of China - listed by author and date
  • China's History
    • Socialism with Chinese characteristics >
      • The importance of Xi Jinping's speech to foreign political parties
      • China is most promising hope for third world: Fidel Castrp
    • The truth about China’s crucial role World War II is not only history
    • Comparison of Hong Kong and ‘poor whites’ in the US South
  • Other languages
    • 中文文章 >
      • 作为英国人我想对香港说,忘了港英时代吧!
    • Em Português >
      • Lições do desenvolvimento econômico da China para a América Latina
  • Blog
  • About
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  • Key data
    • Exchange rates
    • Key China data
    • G7 >
      • US
      • Japan
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      • France
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      • Canada
    • BRIC & BRIICS >
      • Brazil
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