On 22 June, ELIAMEP hosted a hybrid event in Athens to present the policy paper “Chinese direct investment in South-East Europe: the story behind the numbers”, co-authored by Dr Ana Krstinovska and Ioannis Alexandris.
Following the welcome remarks of ELIAMEP’s Director General, Professor Maria Gavouneli, the two authors presented the rationale of their study, its key findings and conclusions. Professor Ioannis Armakolas, Head of ELIAMEP’s South-East Europe Programme moderated the event.
The study examined China’s outbound foreign direct investment (FDI) in Southeast Europe (SEE) from 2012 to 2022. It highlighted that China’s FDI in SEE is influenced by the Communist Party’s agenda, China’s growth model, the Belt and Road Initiative (BRI), and strategic objectives.
Overall, China’s FDI in SEE reflects a combination of incentives and constraints. While certain countries, like Serbia, actively facilitate Chinese investment, others with pro-Western orientations and limited economic rationale face difficulties attracting significant FDI. Beijing’s own economic priorities and restrictions on outbound capital flows further impact investment opportunities.
Despite these incentives, Chinese FDI in the region faces constraints. These include restrictions on outbound capital flows, limitations of China’s economic model, and the pro-Western orientation of many SEE countries. These factors have hindered significant Chinese FDI presence in certain countries. To overcome these constraints, Chinese firms, particularly privately-owned enterprises (POEs), are increasingly opting for joint ventures with Western firms in the region. This strategic shift aims to navigate the challenges and make Chinese companies more welcome in SEE. This trend of joint ventures is expected to shape future Chinese FDI in the region.
Following the presentation of the study by the two authors, Andreea Leonte, China fellow at the Romanian Institute for the Study of the Asia Pacific (RISAP), took the floor to discuss these trends and patterns and Chinese FDI, outlining what we should expect next from the Chinese FDI in the region. She also presented findings and key patterns in the case of Romania, demonstrating a strong preference for Chinese FDI in the automotive sector, albeit with limited results.
In the Q&A session, participants explored specific cases and examples of Chinese investments in the SEE, and their reception in the host countries, discussing potential implications for their local economies and population. Another issue of particular interest was the distinction between Chinese POEs and SOEs, given the tight grip of the Chinese party on the economy, often blurring the lines between private and state business in China.