Belt and Road projects foster China-CEEC cooperation

Latvian participants attend a video conference with Chinese health officials, experts and their counterparts from Central and Eastern European (CEE) countries in Riga, Latvia, March 13, 2020. (Photo by Janis/Xinhua) As projects under the China-proposed Belt and Road Initiative (BRI) proceed as scheduled despite the impact of the COVID-19 pandemic, they are becoming a driving force for economic and trade cooperation between China and Central and Eastern European countries (CEEC), industry experts and analysts said on Sunday.  Infrastructure buildup is attracting more investment into CEECs and providing jobs to local communities, as it paves up the hardware for trade and economic cooperation, Chinese analysts have said, ahead of the second China-CEEC Expo & International Consumer Goods Fair.

The expo, held in East China’s Ningbo, aims to promote China-CEEC trade by showcasing CEEC products. A number of high-level infrastructure projects are being pushed ahead despite the pandemic.  In Croatia, Chinese engineers are working at Croatia’s Peljesac Bridge project. “As we manage to overcome the difficulties brought by the pandemic and keep its impact at the minimum, the project is 85.45 percent complete, with 113 steel box girders being installed,” a manager on the site told the Global Times on Sunday.

The Peljesac Bridge and access roads project, the biggest transportation infrastructure project between China and Croatia, connects the Croatian peninsula Peljesac with the Croatian mainland. The project is being constructed by Chinese infrastructure giant China Communications Construction Co (CCCC) and is expected to greatly improve connectivity for local residents as they don’t need to cross national borders to travel once the bridge is completed. At Serbia’s E763 highway project – another BRI project contracted by CCCC, a manager at the project site told the Global Times on Sunday they developed and executed a plan to store three-month-worth of epidemic control materials and essential goods at the project’s site to minimize the impact of the pandemic.

The China-Europe cargo freight train has also been gaining momentum as the pandemic disrupted production in Europe and gave an unexpected boost to e-commerce.  Liu Ying, research fellow at the Chongyang Institute for Financial Studies at Renmin University of China in Beijing, told the Global Times on Sunday that seen from her field studies, the cargo freight train service had taken advantage of the post-virus transportation with soaring sea freight rates and is now being increasingly used by merchants who want to book shipment capacity to Europe amidst an economic recovery. In June 2020, a direct link by China Europe cargo train connected Chongqing in Southwest China with Budapest, Hungary.

All-round connection In addition to roads and bridges and railway connection, direct air link between China and CEECs has also seen an increasing trend.  In May 2021, Zhengzhou in Central China’s Henan Province added a direct air link with Budapest.

The direct air link connection will include five weekly flights, with each flight carrying up to 17 tons of goods including jewelry, sportswear and gardening tools.  The addition of the new airlink and an affiliated local truck delivery network are making delivery of goods from China more efficient to destination, cutting time by 20 percent and cost by 5 percent, according to media reports. On May 26, Ningbo also established a direct air link with Budapest with a cargo flight executed by China Eastern Airlines.

The twice weekly flight, carrying anti-pandemic goods and e-commerce cargoes, is Ningbo’s first direct air link with CEEC city. Ningbo, a city which has seen particular strong growth in trade and investment with CEECs, saw its trade with CEECs totaling 11.96 billion yuan (£1.87 billion) in the first four months this year, with an annual increase of 48.8 percent from the same period last year. Imports surged by 241.2 percent year-on-year while exports grew by 27.9 percent. 

The city also is involved in £560 million worth of investment to CEECs, accounting for over 5 percent of the country’s total.  Liu said the massive buildup reflected that infrastructure and connectivity projects between China and CEECs were previously inadequate. Liu noted that unlike developed Western European countries, there is a gap between development demand and the existing infrastructure level in CEECs.

“It can be said that the weak link and gap in supply chains, and financial arrangements are blocking China-CEEC trade and cooperation to develop toward a higher level,” Liu said. “In this sense, the infrastructure projects between China and CEECs are not too much, but too little.”  Digital infrastructure AliExpress.com, which plays a key role in cross border e-commerce trade between China and CEECs, told the Global Times in a statement on Sunday that since the e-commerce boom that came along with the global pandemic there has been a rapid expansion by Chinese vendors in CEECs. 

“CEECs now, especially Poland, have become one of the largest markets for AliExpress.com vendors with leading sales volumes,” according to a note sent to the Global Times by the China-based online retail service on Sunday. Poland is now the top market for leading brands on AliExpress including iLife, Booster, inFace that won consumer recognition with their high-cost-efficiency products, according to AliExpress.com. More sectors for cooperation

Besides infrastructure projects, trade and investment cooperation between China and CEECs have expanded to include more areas such as forestry.   On June 2, China and CEECs issued a joint statement on the cooperation in the forestry sector with an eye on climate change issues and sustainable development.  Under the framework of the BRI, CEECs have become important partners and key investment destinations for Chinese companies in the forestry sector.

China’s trade on forestry sector goods with CEECs has jumped from £1.37 billion in 2016 to £2.4 billion in 2019, with an average annual growth rate of 20.5 percent.