This month, the Communist Party of China (CPC) celebrated its 100th anniversary in Beijing. The smooth celebration of this centenary in the midst of a global pandemic was crucial for the Chinese government. By gathering thousands of party members at this event, this celebration fit the narrative of the CPC presenting itself as the savior of the Chinese nation not only against covid-19 but also from a historical perspective.

The main event of this celebration was a speech by Xi Jinping, General Secretary of the CPC and President of China. Xi proclaimed that "China’s success hinges on the Party", meaning that the CPC is the only actor that can guarantee China’s national unity and economic success. In this regard, he asserted that the CPC has been the only historical force capable of reunifying the Chinese nation after the “intense humiliation” and “national disunity” caused by the foreign powers that semi-colonized China during parts of the 19th and 20th centuries. Xi also pointed to the CPC as the main architect of China’s robust economic development in recent decades. In short, he repeated the glorifying and deterministic narrative of the CPC as the only force that can hold China together and create economic prosperity.

Xi’s speech also presented the CPC’s stance towards the rest of the world. The message was meant to sound both benevolent and frightening. On the one hand, Xi said that “the Chinese nation does not carry aggressive or hegemonic traits in its genes” and that China will work to maintain the international order and promote peace and development. On the other hand, he warned that any external force that tries to “bully” or “subjugate” China will clash with “the great wall of steel forged by the flesh and blood of the 1.4 billion” Chinese citizens. This message fits with the more assertive narrative and foreign policy that Xi Jinping’s China has pursued in recent years.

This speech and the centenary come at a time of renewed global power competition. China has increased its relative power vis-à-vis the United States and the European Union, a fact that has generated a balancing reaction from Washington and Brussels. China’s increased economic and military capabilities, as well as its more assertive foreign policy abroad and greater levels of domestic repression, have generated a bipartisan consensus in the US that sees China’s authoritarian rise as a threat to US national security interests. In the case of the EU, Brussels has tried to build a policy towards China based on “strategic autonomy”, which seeks to differentiate itself from the US approach and tread a fine line between opposing China’s authoritarian trends while continuing to do business and compete internationally. The EU sees Beijing as a competitor in systemic and economic terms and has increasingly adopted tougher policies towards China. This EU response follows Beijing’s growing presence and influence in Europe in recent years. Moreover, the EU-China relationship has recently been strained by the aggressive messaging of Chinese diplomats during the covid-19 pandemic, something that generated negative perceptions in Brussels. The latest examples of these tensions have been the imposition of crossed sanctions on Chinese and European politicians and organizations, and the European Parliament’s freezing of the EU-China CAI investment agreement.

After China shifted its foreign policy from a low-profile to a more assertive one under Xi Jinping’s leadership, its geopolitical and economic impact in Europe has increased. In particular, Beijing’s influence in Central and Eastern Europe has gained strength in different areas. 

• China has increased its economic footprint in the region through the Belt and Road Initiative, Beijing’s international strategy to gain influence abroad and strengthen its global value chains through investment and connectivity. Although Chinese FDI levels in Central and Eastern Europe are lower than in Western Europe, the rate of FDI in infrastructure construction has been higher. 
• China has also gained political influence in some Central and Eastern European EU member states. In fact, countries such as Hungary have blocked EU statements criticizing China, and MEPs from different countries in the region (including Bulgaria) have shown partisan divisions in their positions towards Beijing. Yet, China has also faced strong rebukes in countries such as the Czech Republic, where it has become an issue of national division.
• China’s influence has not only affected Central and Eastern European EU member states, but even more so non-EU Balkan states. The main channel through which China has sought to build stronger ties with all these countries has been the 17+1 forum, an annual event where these states can meet bilaterally with Chinese representatives. In addition, China has increased its media presence in the region in order to enhance the narrative of the Communist Party of China.

Finally, while China has advanced its influence in many fields in the region, it has failed in areas such as 5G technology. Following pressure from the US, most Central and Eastern European states have opposed Huawei as a 5G infrastructure provider, dealing a blow to China’s technological aspirations abroad.

China’s strategy in Europe is based on a combination of an aggressive charm offensive and message control, and strategic political engagement with less integrated regions, such as the 17+1 format for CEE. It is also based on technological and high-return investments in Western Europe and rule bending regarding the acquisition of distressed asset in CEE. In particular, China has sought to arrange non-market infrastructure deals in the Western Balkans countries, providing cash-strapped local governments with alternatives to EU-rules and conditionality-based financing. Yet, this has made them vulnerable to Chinese debt-trap. Montenegro has been the first European country to fall into such a trap, as it has recently asked EU partners to help it refinance non-transparent Chinese loans. 

The EU needs a much more coherent response to China’s multi-pronged strategy of building inroads into the continent’s economy and politics. Business as usual is not an option:

• The EU needs to strengthen internal rule of law mechanisms and guarantee that member states and CEE candidate countries respect market and public procurement regulations in their dealings with China.
• The EU needs to introduce adequate investment screening mechanisms to ensure that strategic Chinese technological and debt-trap investments are fended off for security reasons.
• In particular, the EU needs to ensure that China respects its climate goals and introduces credible mechanisms for climate-proofing its investments in Europe and globally. If Europe is to succeed in its climate leadership, it would need to provide a firm response to China’s neglect for climate goals just as well as to its disregard for human rights at home and abroad.