China is losing Eastern Europe

China’s failure to condemn the Russian invasion of Ukraine and its speculative “neutral” posture has put strain on the China-EU relationship. Nowhere has the disillusionment with China been more pronounced than in Europe’s eastern flank, which once was subjected to Russian aggression. China’s posture is at clear odds with the region’s strategic security interests. Moreover, Beijing’s ambassador to France, Lu Shaye’s, comments that post-Soviet countries did not enjoy “an effective status under international law” may have pushed the relationship beyond a point of repair.

Eastern Europe was once viewed as a promising region for an expanded and pragmatic cooperation with China and it was even touted as China’s economic ‘gateway to Europe’. This was exemplified by several economic and diplomatic configurations, including the massive, infrastructure-focused Belt and Road Initiative and the ‘17+1’ format bound to increasing Chinese investment in the region. But even pre-war, it was apparent that these formats had failed to bring in a meaningful wave of Chinese investment. With the exception of Hungary, they were unsuccessful in generating results, and were reduced to a zombie mechanism, delivering an annual forum alongside failing projects. Today, the Port of Piraeus located in Greece—the format’s latest addition—is also its lone meaningful investment story.

Following these events, the CEE region increasingly turned away from China. Last year, the Baltic states exited the CEE-China ‘17+1’ cooperation mechanism. Other Eastern European countries that once favored close ties with Beijing doubled down on strengthening ties with like-minded democracies, as evidenced by the new Czech president Petr Pavel’s first diplomatic call to Taiwan, followed by a large Czech delegation being received in Taiwan in March, in defiance of China. Prague and Bucharest, moreover, banned Chinese companies from building their new nuclear plants. The CEE countries also signed a Memorandum of Understanding with the US government to restrict companies like Huawei from building its 5G infrastructure in the region.

Perhaps only Hungary remains keen on keeping Beijing close, as evidenced by last August’s announcement that Chinese Contemporary Amperex Technology Co., Limited will open its second European battery plant in Hungary, with an investment of €7.3 billion, more than three times the previous one.

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