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The New Balkan Route – China’s Development Aid for Southeastern Europe

China's premier Li, Hungary's PM Orban and Bulgaria's PM Borissov at the 6th summit of the Cooperation of Central and Eastern European Countries and China in Budapest 2017. © / CC BY-SA 4.0 / Wikimedia Commons

The ancient Silk Road was a trade and road network that connected China and Europe across the Eurasian landmass. It reached a peak in its expansion in the 13th century and received its name through the silk trade towards the West, whereas mainly wool, gold and silver traded to the East. Beside an economic exchange, a socio-cultural exchange took place as well, which Western trading partners used to spread Christianity (Britannica, 2021). 800 years later, the ancient Silk Road is brought back to life. Trade is still its main driver, but the conditions have fundamentally changed. It seems that the East now expels its own worldview in addition to its own goods. This is especially noticeable in areas that have not yet found their supposed place in the contemporary world order, such as the Balkan states in Southeastern Europe.

Since the middle of the last decade, China's President Xi Jinping has been propagating a trade route across the Balkans through which China's export goods should reach Western Europe - the new Silk Road or “One Belt One Road” (OBOR) (Aitzhanova 2019, p.63). OBOR is the ultimate result of China’s foreign policy since the Chinese economic reform in the late 1970s. The Balkans are only a small part of the entire OBOR network divided into a land route and a sea route.

The New Silk Route stretches from Moscow in the North, across the South Pacific in the South, reaches Latin America in the East to the Netherlands in the West, thus covering almost the entire landmass of the globe (Wang 2015a, p.99). In 2016, 65 countries around the world were involved in OBOR, covering approx. 60% of the world’s population and one-third of the world’s GDP (Leverett and Wu 2016, p.127). China's status as a leading (future) global economic power is the natural foundation of the OBOR. The world's second largest economy serves a strong demand as well as a high supply capacity. Many countries need China to serve their own domestic demand and export their own goods, mostly commodities (Li and Cui 2015, p.68; Hu 2019, p.150). China's OBOR investments often flow into underdeveloped states without significant ties to the West (Kuhn 2019, p.882). Nevertheless, 18 states from Eastern and Southeastern Europe are also included, such as Serbia, Hungary and Poland, often with a socialist past (Li 2019, p.44; Zhou et al. 2020, p.3562 & 3565). Officially, the OBOR mindset is to strengthen economic cooperation, improve people’s wealth, manifest prosperity, promote regional integration in world market and build a new economic trade pattern that is contrary to the transatlantic trade axis of leading developed countries of Western Europe and the US (Li and Cui 2015, p.65 & 70).

However, in equal measure China is also pursuing financial, political and economic self-interests through OBOR. In OBOR countries, China is primarily a financier of infrastructure projects with high interests; exports own surplus capacities of its SOEs and sources its labor and capital-intensive industry out to developing and emerging countries (Li and Cui 2015, p.67). At the same time, China finds direct consumers of their products along the OBOR routes (Rasonyi 2018) and secures valuable imports of raw materials, e.g. natural gas, oil, iron ore, or soybeans. This is because the Chinese domestic industrial consumption exceeds the domestic supply of commodities by far. In 2017, China only produced 190 million tons of crude oil, but in the same year, the domestic industry's demand was 420 million tons. By investing heavily in OBOR countries, China aims to secure sources of commodities in return. This endeavor ranges from oil and natural gas-rich but poorly connected countries in Central Asia, such as Kazakhstan or Uzbekistan (Hu 2019, p.150 & 155) to EU member states, such as Lithuania, which in return exports briquettes, lignite, or peat to the People's Republic (Chen, Chen and Li 2019, p. 60). China is already the third largest importer of Albania and Serbia, ranks fourth in Hungary and is far ahead of other European states – and rising (Zhou et al. 2020, p.3566). Beside consumer goods and loans, its China’s infrastructure projects that are driving the Southeastern European countries further into China's arms and cementing the ties. For example, China is financing and building a highway route in Serbia and Montenegro and a rail link from Serbia to Hungary (Emerson 2019, pp.166-167; Chen, Chen and Li 2019, p.54). China even finances the port of Piraeus, a port without any advocates during and after the global economic crisis of 2008. In the long term, a high-speed network of roads and railways through Ea