China puts links with central and eastern Europe on the fast track

At a meeting with the leaders of 16 Central and Eastern European countries (CEE) in the Serbian capital of Belgrade in December, Chinese Premier Li had announced a new investment fund of $3 billion to facilitate financing in the cash-strapped countries.

Cui Hongjian, head of European Studies of the China Institute of worldwide Studies, said China had pledged to provide US$10 billion in special loans to central and eastern European countries in 2012, but that had not worked out because it required governments to provide guarantees, which conflicted with EU policies.

A version of this article appears in print on November 25, 2015 of The Himalayan Times.

Serbia wants to become one of the crucial trade hubs in this part of Europe being part of the Belt and Road Initiative.

China supports its businesses to participate in the privatization of some Slovenian state-owned enterprises, as well as new energy, high tech, forestry and tourism, Li said.

To remain on track, Li encouraged strengthened cooperation between China and Central and Eastern European countries, particularly on connectivity projects and infrastructure upgrade. Li suggested setting up “a 161 multilateral finance company” to finance trade and investment, reducing financing costs and removing the need for governments to provide guarantees.

The train ride is a showcase for future China-CEE cooperation.

Once complete, the railway will help create a fast lane for importing and exporting products between China and Europe.

Details of the two deals are not immediately available, but Li had pledged earlier in the day that construction work of the railway would be underway by the end of this year and be finished within two years.