Balkans:Chinese engagement in the field of infrastructure

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By Blerim Abedini, the Center for Security Studies and Development- Macedonia(CSSD).

 

China faces a new challenge, to compete with technological innovations and studies which will rank among the developed countries. The Gross Domestic Product(GDP) in China reported by the World Bank Group was worth 10354.80 billion US dollars in 2014. China is already investing in the Eastern Europe- Balkans, with production of chemicals, electronics and other, in the region which is attractive because of the labor cost where is lower than those of Western Europe.

Today certain changes in constitution and state governance enable China to raise economic power in the international market.
China a country with a high potential of people able to work, makes investments in certain regions. With a new policy must retain its macroeconomics policy continuously. China faces a new challenge, to compete with technological innovations and studies that will rank among the developed countries. Chinese teaching programs in schools by decades have been different. In the countries of socialist regulation systems, the subjects lacked studies on technological advancements. Capitalist countries, they have treated as primary, science subjects and technology, because of competing in the “Cold War” between two military world of alliances. In the absence of technique and technology world of Socialist Union has failed to produce computer microchip. For this reason the Unity of socialist states will lose competition in the “Cold War”, and also seen as dispersed into separate states. Although someone will criticize the quality of Chinese products, but the products still meet the needs of people in comparison with technology trends.

The Gross Domestic Product (GDP) in China was worth 10866.44 billion US dollars in 2015. The GDP value of China represents 17.53 percent of the world economy. GDP in China averaged 1605.36 USD Billion from 1960 until 2015, reaching an all time high of 10866.44 USD Billion in 2015 and a record low of 46.69 USD Billion in 1962.

Source: tradingeconomics.com

China is ranked as 3-rd of 126, GFP Power Index rating. Open market to whole World contributed to military modernization. According to ‘Lowy Institute for International Policy’ in Sydney, both the People’s Liberation Army (PLA), People’s Liberation Army Navy (PLAN) and the People’s Liberation Army Air Force (PLAAF) constitute the largest military in the world, with 2.3 million active personnel.

We are seeing recently the Chinese engagement in the field of infrastructure constructions. China can build railways around the world, including and developed countries. China competes with activities that enable opening and exploitation of mining, drilling of oil wells and natural gas. It has developed enough with the automotive industry. It produces trains for passengers and for the industry. In Macedonia, we can see all the above mentioned industrial products. Investments in the automotive industry, especially in vehicles with electric recharging, are as global market challenger. In this respect to work, the prices of vehicles that consume electricity are affordable and accessible to developing economies, such as the Balkan Peninsula.

SOME INVESTMENTS OF CHINA IN EUROPE AND BALKANS ARE:

  1. The manufacturer of the train is Zhuzhou Electric Locomotive Co. Ltd., is a subsidiary of China’s high-speed rail (HSR) group CRRC Corp. Ltd. New trains and the renovated railway stations along the Corridor 10 are the first investment in the Macedonian railways sector for more than 30 years.
  2. The breakthrough project between Serbia and China was construction of a bridge near the capital Belgrade named after Serbian scientist Michailo Pupin, which is the Chinese enterprise- China Road and Bridge Corporation. http://www.balkaninsight.com/en/article/serbia-s-credit-based-economic-cooperation-lacks-direct-investments-06-14-2016#sthash.CRUvBKwr.dpuf
  3. The planned construction of the Belgrade-Budapest high-speed railway which is expected to be completed by 2018.
  4. Serbian government has also closed a deal to sell Zelezara- Smederevo steel mill to China’s He Steel Group, one of the largest firms in the global steel business, for 46 million euros.
  5. In March, Canada’s Banker’s Petroleum announced the sale of oil exploration and production rights to affiliates of China’s Geo-Jade Petroleum for a price of €384.6 million. Banker’s started to exploit the Albanian oil fields of Patos-Marinze and Kucova in 2004, until 2014. Now the Chinese will hold those drilling rights.
  6. China’s Everbright and Friedmann Pacific Asset Management announced the acquisition of Tirana International Airport SHPK, which operates the Albanian capital’s major airport.

Under the program, announced by President Xi Jinping in 2013, and also known as the “One Belt, One Road” program, China aims to invest in infrastructure projects including railways and power grids in central, west and southern Asia, as well as Africa and Europe. Chinese companies invested nearly $15 billion until 2016 years in countries participating in Beijing’s new Silk Road initiative.

China’s Hesteel signed a 46-million euro deal in April 2016, to buy the Smederevo steel-works, a 100-year-old company that was part of U.S. President Xi Jinping visited this year Serbia, Poland, and Uzbekistan where was held the summit of the Shanghai Cooperation Organization, a Chinese and Russian-led security grouping.  China is already investing in the Eastern Europe with production of chemicals, electronics and other products in the region, which is attractive because of the labor cost which is lower than those of Western Europe.

So, Chinese intrusions in economic unstable countries can provide benefits in terms of exploitation of minerals required by the international market. This gives the benefits of safe intervention for Chinese budget. While the reconstruction of the infrastructure does not provide a guarantee for debt repayment by the state in development.

Regarding investments in developed countries China has achieved some concrete steps, leaving policies run the risk of foreign investment. This initiative is welcome, because the economy should be developed as much as the political spectrum that the country’s leadership. Balkans gradually become areas of interest or crusade ‘Silk Road’. ‘Silk Road’ is repeated, often, through the Chinese agenda.

Economists will be optimistic for ground connection, as the continent united Euro-Asian but they should know that political disputes must be overcome. An industrial economy which will produce under the supervision of organizations that care for the ecology and improve the conditions and survival for people and animals. So that should be taken into account, investments in energy potentials such as solar, erosion, hydrosphere, energy plants, recycling of waste, prevention of natural disasters, etc., This requires a political and international access.

China apparently refers not to the formation of mega federations and Rule the World. It is understood that the world through economic policy can be a haven for all. China also distance itself from some extreme policies of neighboring states considering the progress that has already come in the name of developing cooperation with international companies. This gives hope that China is a shield against ‘Cold War’ that has now gripped the world.

WORKS CITED