By Bloomberg Editorial Board
From the article:
China’s efforts to make inroads in eastern Europe are being hindered by what nations see as failed promises on money materializing and the strings attached to investments.
The so-called 16+1 framework was established by China as a means to deepen its footprint in eastern Europe. Its members -- 11 European Union countries, from Poland to Hungary and Estonia, plus five Balkan states -- saw the annual forum as a means to attract Chinese investment in infrastructure like roads and rail networks to boost their economies.
But many of those states are disenchanted with the lack of investment from China, according to people with direct knowledge of the forum. Members are also unhappy at Beijing’s preference to provide loans rather than cash, and now recognize that better deals are available within the EU framework, such as via the European Bank for Reconstruction and Development.
Some of those projects that have materialized with Chinese help have attracted unwelcome attention. Mounting costs for a highway development in Montenegro prompted the Washington-based Center for Global Development to single out the country as “at particular risk of debt distress,” while the tender for an as-yet unfinished high-speed rail link between Budapest and Belgrade prompted an EU commission probe.
Read the full article here.