Geoeconomic ripples of the 17+1 Mechanism
The trade between CEE countries and China has been developing since 2012 within the 16/17+1 Mechanism. However, it needs to adapt to the new circumstances and reconsider its strategy to meet the expectations it originally projected.
In 2017 trade to China-CEE trade amounted to $68 billion, almost 16% from the year before, and surpassing the EU-China trade growth rates. However, over 95% of investments are concentrated in six of the 17 CEE countries (Poland, Czechia, Slovakia, Hungary, Romania, Bulgaria), while other countries seem to be experiencing a ‘promise-fatigue’, affecting both public image and economic rationale of the Mechanism.
While European Structural and Investment Funds provide much more generous and cheaper financing, they are also very administratively demanding. On the other hand, arrangements negotiated with the Chinese diplomacy may provide more speed and flexibility in implementation, but EU countries require screening procedure to assess whether foreign direct investment constitutes a strategic and public security threat.
Foreign direct investment and more balanced trade are the core promise indicators of the 17+1 Mechanism, and at the same time they reflect deep structural geoeconomic asymmetries interlocking the EU, CEE, and China.
As some of the Chinese diplomatic posts in the 17 CEE countries suggest in their reports, socio-cultural obstacle to desired increased exports into China my be the lack of practical knowledge about the opportunities and trade modalities in China. China tackles this situation by continuous cultural diplomacy and exchange activities, which may benefit from more focus and depth, and including Chinese language courses through its Confucius Institute network, various public diplomacy campaigns, as well as by trade fairs, latest organized in Ningbo in 2019, and the next one planned to take place as the online exhibition in June 2020.
Anti-pandemic measures have scaled back sharply global production and consumption in the short-term, while the effects are forecasted to resonate globally for years. Rapid and domino lockdowns took place amid the conflict between Russia and UAE which resulted in flooding the market with short-term surplus oil, temporarily but strongly affecting the USA and CEE countries as well.
The real GDP growth is projected globally at -3% in comparison to the 2008 financial crisis which generated a drop of 0,1%. Developing countries are particularly affected by the crisis, falling particularly in the risk of larger debt, further affected by currency exchange slides. These acute geo-economic challenges may generate a web of ripples in the global economy and strongly direct the repositioning in the geopolitical constellations, potentially aggravating (and be further aggravated by) the global and intra-national inequalities and disparities.
Geoeconomic aspects resonate strongly in the cultural-security complex. Acquired habits during good years, traditions and customs, expectations and perceptions of change, efficiency and reach of the social safety networks, employer’s and workers’ unions, professional associations and professionals, intertwined social hierarchies, and all the way down to the interdependent journalism and reliance on the current governance system, may be affected by the performance of economies.[1]
These, in turn, depend also partly on the proficiency of the managers to reframe and reinterpret perceptions, narratives, and futures. To be perceived credible, realistic and desirable, in addition to the solid (although not necessarily favorable) reputation of the deliverer, especially to explain if not justify any sacrifice, they need to support continuity, transformation and ‘since always’ goals of the imagined community, on any side.[2]
The results of the 17+1 Mechanism are clearly not as effective as originally desired, and the economic mechanisms seem not to be the only, maybe not even the strongest leverage in the game. The 17+1 Mechanism seems to mandate a vision- and approach- makeover. Apparently, a makeover which will consider both cultural and security indicators of connectivity, diversity, and cross-cultural cosmopolitanism for the 17+1 countries, and be able to anticipate their trends.
References
[1] Carrier, J. G. (2005) A Handbook of Economic Anthropology. - Cheltenham and Northampton: Edward Elgar.
[2] Anderson, B. (2006) Imagined Communities. – London and New York: Verso.