China connecting Europe?

Area of Science:

• Geopolitics and International Relations
• Economics and Infrastructure Development
• European Studies

Background:

• China's Belt and Road Initiative (BRI) is increasingly significant for Europe.
• The '17+1' cooperation format (China and 17 Central, East, and Southeast European economies) highlights intensified Chinese infrastructure development in the region.
• Greece joined the '17+1' in April 2019, boosting interest in BRI's connectivity effects.

Purpose of the Study:

• To analyze the geographical distribution and sectoral focus of Chinese infrastructure development in Europe.
• To assess the potential economic benefits and risks of BRI projects for European economies, particularly the Western Balkans.
• To examine the role of EU initiatives in complementing BRI and managing associated challenges.

Main Methods:

• Descriptive analysis of Chinese infrastructure development activities in Europe.
• Examination of construction contracts and their sectoral distribution within the '17+1' region versus other European areas.
• Review of economic effects through production and supply chains and the impact of EU initiatives.

Main Results:

• Chinese infrastructure development is geographically concentrated in the '17+1' region, with ~90% of contracts in connectivity sectors.
• The Western Balkans are poised for significant economic gains due to infrastructure deficits and limited EU grant access.
• BRI projects impact broader European supply chains, affecting more countries than initially apparent.

Conclusions:

• The BRI is set to transform physical and digital connectivity across Europe.
• Active EU engagement is necessary to align BRI with European interests, fostering economic convergence and mitigating risks like debt and trade barriers.
• Strategic EU involvement can ensure improved connectivity drives positive economic outcomes rather than political divergence.