The Fast-Moving Orient Express

　　Expanding cooperation with Central Eastern Europe will be the new highlight of Chinese collaboration

　　Traditional friendship， a common desire for development and shared needs constitute the glue that binds China and Central Eastern European (CEE) countries together.

　　Chinese Premier Li Keqiang kicked off his first state visit to CEE in late November following the Third Plenary Session of the Central Committee of the Communist Party of China， which detailed the nation’s major targets of future reform and development. On November 26， Premier Li and 16 of his CEE counterparts forged a guideline to expand their cooperation in political， trade， investment， finance， science and cultural exchanges. With this blueprint， CEE countries will link up on the China expressway of rapid development， while China hastens its pace of foreign investment and technological cooperation with the region.

　　Mutually strategic moves

　　Most CEE countries established diplomatic relationships with China since its founding in 1949. Over the past decades， China and CEE countries have established various exchange mechanisms that cemented political relations between all sides.

　　“Friendly political relations and vigorous economic cooperation are expected to complete a positive circle of China-CEE relationships，” Cui Hongjian， Director of European Studies with the China Institute of International Studies (CIIS)， told Beijing Review.

　　The traditional friendship has now been injected with vigorous multi-faceted cooperation. Premier Li arrived in Bucharest on November 25 for his visit to Romania and the China-CEE leaders’ meeting there. This was the first visit to the country by the head of Chinese Government in the past 19 years.

　　Describing his trip to Romania as an endeavor to improve mutual political trust， Li suggested three proposals for developing bilateral relations： deepening practical cooperation， seeking mutually beneficial and win-win collaboration based on strong economic complementarity， and making the bilateral relationship an example in promoting relations between China and Europe as a whole. His Romanian counterpart， Victor Ponta， echoed that Romania is willing to be China’s honest partner in Central and Eastern Europe as well as the European Union.

　　Cui from the CIIS said both China and CEE countries need to conduct reforms to realize development. Their traditional friendship has provided a positive background to boost cooperation to the benefit of all sides， he said.

　　China and CEE countries have a common desire to increase collaboration， with the knowledge that two joined hands are always stronger than one. Ruan Zongze， Vice President of CIIS， noted that both China and CEE countries are at a stage of development transformation in which heightening cooperation would enable each side to fully utilize the other’s advantages. CEE countries， most of which are emerging economies with similar GDP per capita as China， are also at a crucial transitional stage to a market economy， and their social and economic development is in urgent need of advanced technology and funds.

　　Moreover， 11 of the 16 CEE countries are member states of the EU and the rest also intend to join the regional bloc. They need to shorten the gap with developed EU members to better adapt to the organization’s integration rules. “After the financial crisis， old EU members are no longer able to provide capital assistance. It is natural that CEE countries are turning to China for new investors and as an export market，” said Shen Jiru， a senior research fellow with Chinese Academy of Social Sciences (CASS).

　　For China， exploring the CEE market is a strategic choice in shifting its economic development pattern， adjusting its economic structure and promoting product grade， said Shen.

　　CEE countries have big market and development potential while China has extra capital and technologies， which is a key point of convergence. The guideline signed on November 26 at the second China-CEE leaders’ meeting seeks to expand investment and boost infrastructure collaboration. Plus， China has promised to provide a $10-billion special credit line to CEE countries， which will become a firm support to CEE’s development demands.

　　During the premier’s visit， China and CEE countries also agreed to launch practical projects for its mid- and long-term cooperation plan. Premier Li and his Romanian counterpart Ponta agreed that the two countries would work together in building high-speed railways in Romania. The two leaders reached comprehensive consensus on deepening cooperation in such fields as trade， energy and infrastructure and agreed to set up a working group immediately to implement their agreements in high-speed railway construction， nuclear energy and railway upgrading projects.

　　During Li’s visit， China and Romania reached an agreement to strengthen cooperation on a fourth generation (4G) mobile network. Given that China has mature 4G mobile communication technologies， 4G technologies transferred from China will enable Romania to enter the 4G era at a faster pace.

　　In addition， China reached an agreement with Hungary and Serbia to jointly build a railway between two countries. Premier Li hailed the project as a landmark in cooperation between China and CEE countries. Highlighting Chinese equipment as a new global trend due to its high quality and low cost， Premier Li said these advantages will not only improve infrastructure in these countries， but also reduce China’s over-capacity and improve product and service quality.

　　A parallel relationship

　　“Premier Li’s visit will enhance China and the CEE’s confidence in seeking common cooperation and development， thereby pushing forward the China-EU relationship in a comprehensive and balanced way，” said Ruan with the CIIS.

　　Currently， the CEE covers one quarter of the EU population. However， trade volume between China and CEE countries is only one 10th that of China’s trade volume with the EU.

　　China and CEE countries have set a target to double their trade volume in five years. China is now the biggest trade partner of CEE countries in Asia. In 2012， China-CEE trade volume reached over $52.1 billion， and it dispatched over 100 trade and investment promotion delegations to the area. From January to October 2013， bilateral trade volume hit $45.4 billion； China’s investment in CEE countries exceeded $3.5 billion， while CEE countries’ investment in China surpassed $1.1 billion.

　　Future cooperation will bring tangible benefits to China and CEE countries. According to agricultural cooperation documents signed during Premier Li’s visit， Romania will export about 500，000 cows to China in the next seven to 10 years， which will bring in 500 million euros (about $679 million) to Romanian farmers.

　　The CEE countries， for their part， are offering China an invitation to the wider market of the EU.

　　Li Jun， a research fellow with China Institutes of Contemporary International Relations (CICIR)， pointed out that by conducting investment and cooperation with CEE countries， Chinese enterprises and products can reach West Europe more easily. Meanwhile， CEE’s development and foreign investment will present greater trade opportunities for countries in West Europe， which is sure to aid in the integration of the EU.

　　Statistics show that two-way trade between China and the EU exceeded $546 billion in 2012， with the EU becoming the largest trade partner of China. In October 2013， China and Europe inked $270-million in investment and trade deals.

　　Economic cooperation with CEE countries is one aspect of China’s economic relationship with the EU. The framework of the recently signed “roadmap” reveals Europe’s confidence in China’s development， presenting CEE countries with the bright future of cooperating with China， said Shen from the CASS.

　　Moreover， China can accumulate experience via its cooperation with developing CEE countries. Expanding China-CEE cooperation will also help improve China-Europe cooperation as a whole and foster a more comprehensive and balanced development of China-Europe relations， said Ruan.

　　On November 21， China and the EU signed a plan for bilateral cooperation. “The plan is unprecedented in its breadth of content， ranging from aerospace and counter-piracy to urbanization and energy，” said Premier Li， calling the plan a “roadmap” for China-Europe cooperation until 2020. According to the plan， China and the EU will discuss the feasibility of a free-trade agreement and work toward the goal of increasing bilateral trade to $1 trillion by 2020.

　　The Chinese premier described the $1-trillion goal as “no low-hanging fruit” in his article published in the London-based Daily Telegraph. “We need to jump to reach it，” Li said， reasserting confidence in attaining the target. The premier also reaffirmed China’s stance on supporting Europe’s integration process， saying “a united， stable and prosperous Europe is in the interest of the world and of China.”

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