Just how important is Croatia on the Chinese Investment Map?
China’s investment in European Union countries has grown steadily over the past ten years, and the European Commission (EC) has recently referred quite openly to the Chinese as a “systemic rival” and “a strategic competitor.”
The European Union has thus introduced a new mechanism for the strict overseeing of foreign investment, in order to promptly react should they assess that foreign investment could harm the security of EU member states.
According to the EC’s report, a third of total EU assets are in the hands of foreign companies and 9.5 percent of companies in the EU have owners based in China, Hong Kong or Macau.
When compared with 2007, when this share was only 2.5 percent, it’s a significant increase, although the share of European business in Chinese hands is still relatively small. By comparison, back at the end of 2016, 29 percent of EU companies were controlled by Americans and Canadians.
Chinese investment in Europe reached its peak back in 2016, when it amounted to an enormous 37.2 billion euros, followed by a visible slowdown.
“This is mainly a result of stricter control over Chinese capital, but also changes in the global political climate when it comes to China’s investments,” explained Agatha Kratz of the Rhodium Group.
Just where are the Chinese investing the most? Although a recent visit by a large Chinese delegation has been accompanied the news of the growth of Chinese investment and ambitions here in Croatia, according to the Rhodium Group, the Republic of Croatia is not even in the top ten countries in which China is the biggest investor in terms of capital.
Between 2000 and 2018, most Chinese investments took place in the largest European economies, such as the United Kingdom, Germany, Italy, and France. The top ten were ranked in the Netherlands, Finland, Sweden, Portugal, Spain, and Ireland.
According to Bloomberg’s survey last year, they have owned or used to own shares in four European airports, six naval ports, and as many as thirteen football clubs.
Nevertheless, one must not forget the new big Chinese project, the Silk Road, known as the “One Belt, One Way” Initiative, in which the Chinese plan large investments in European infrastructure to strengthen trade links between China and Europe.
Croatia is along that ”road”, and therefore the Chinese are investing in Rijeka Port, the Rijeka-Karlovac railway, mentions of investments in Croatian airports have been floating around, and there’s almost no need to mention the fact that the Chinese are building Peljesac bridge, although its cost is mostly paid for by European Union funds.
The Chinese are also investing in Croatia’s neighbouring countries, building roads and railways in Serbia, Bosnia and Herzegovina, and even in Northern Macedonia.
In addition, Montenegro, as Novac.hr reported earlier this week, provided part of its state territory as a guarantee for the repayment of credits for the construction of part of the Bar-Boljari motorway to the Chinese Exim bank.
Since Montenegro has less of a chance of repaying this loan, it’s not an entirely unbelievable option to remain without part of the state’s territory, as bizarre as it might sound at first, and in that context, it’s possible to understand some Croatian fears about entering into partnerships with the Chinese.
This example is often cited as a warning to European countries to be extremely cautious when concluding economic agreements with China, to make sure they don’t eventually fall into becoming a slave to the debts.
Trump’s administration is much more closed to Chinese investment activities in the United States, and the authorities of other non-EU countries are much more cautious in entering into such partnerships, especially in the areas of telecommunications and defence.
In any case, positively or negatively, China is certainly an extremely important player in Europe.