An Emerging Foreign Policy Trend in Central and Eastern Europe: A Turn from China to Taiwan?

2021 / 09 / 13

Soso Dzamukashvili, Contributing Researcher, Central and East European Studies Specialist, M.A. from the University of Glasgow (UK)

Eter Glurjidze, Contributing Researcher, Alumna of the Estonian School of Diplomacy and the North China University of Technology

In July 2021, Lithuania announced its unprecedented decision to allow Taiwanese authorities to open a “representative office” under the name of “Taiwan” in its country, and opened a Lithuanian embassy on the island. This diplomatic move from the small Baltic State irritated the Chinese government, which, on August 10, announced plans to recall its ambassador from Vilnius and urged the country to apply a reciprocal measure. 

Nevertheless, Lithuania has not been alone in its growing wariness towards Beijing. In September 2020, a Czech diplomatic delegation, led by the senate president, Miloš Vystrčil, visited Taiwan and pledged support for the island and vowed: “not to bow to Chinese threats”. Subsequently, the Czech Republic, along with Slovakia, donated 30,000 and 10,000 vaccine doses to the island, respectively. 

Despite much enthusiasm to establish a close partnership with China in recent years, some countries of Central and Eastern Europe, led by Lithuania, seem to be increasingly changing their policies toward Beijing. 


Partnership with no substance

Almost a decade has passed since China established a partnership with Central and Eastern European (CEE) countries. China’s ever-increasing relations with the CEE countries were largely framed within the 17+1 initiative (now 16+1), which included China and 17 CEE countries. The project was designed to enhance cooperation between Beijing and the region. While China vowed to invest, develop infrastructure and help boost regional economies, the 17 states promised to provide Beijing with cheap access to the European market.

The cooperation backed by Chinese investment has developed steadily throughout the past decade. Nonetheless, it stumbled in 2020, when CEE opted for ‘social distancing’ from Beijing. China sparked suspicions among the region’s leaders due to trade imbalances, a lack of access to the Chinese market and unfulfilled promises regarding large-scale investment.

Most of the CEE countries’ expectations to expand economic ties with China have not led to significant results and have failed to match Beijing ’s intentions. For instance, foreign direct investment from Germany and the United States in the region has constantly outscored that of China. This is even relevant for Hungary, which has the closest relationship with Beijing compared to other states in the region (see chart 1).

Chart 1. Chinese FDI in CEE in comparison to US and Germany (Source: Central and East European Centre for Asian Studies)

The global pandemic, which is widely considered to have originated in China, has somewhat further hampered the relationship. Even though Chinese President Xi Jinping made new promises to boost investments and trade relations with the region in 2021, the 17+1 summits have been increasingly perceived as “photo opportunities” rather than real chances to achieve tangible results. This disappointment was demonstrated at the February summit, as six CEE countries were represented by ministers instead of state leaders. The ones that ignored Beijing’s request were from the NATO 2004 enlargement states, among them Bulgaria, Estonia, Latvia, Lithuania, Romania and Slovenia. In May, Lithuania went even further and decided to drop out, from the initiative as the cooperation between Beijing and Lithuania had brought “almost no benefits”.

While relations between CEE and China have been cooling, Taiwan has seen an opening to become an important economic partner for the region, as well as the EU as a whole, especially in the field of informational technologies and in the biotech and food industry, in which the Taiwanese government has been investing heavily. 

Today, Taiwan is the European Union’s fifth-largest trading partner, with the total bilateral trade reaching 35 billion USD. The island’s economic engagement in the CEE region has also been deepening. For instance, Taiwan and Poland have promoted their trade and investment partnership despite the pandemic, with trade between the two countries expanding by 13 per cent in 2020. 

Taiwan’s growing economic relationship with CEE could benefit the region, given that the island has a lot to offer. Taiwan’s free-market economic development plays a key role in this regard. Steady economic growth, backed by the pursuit of sound economic policies, has made the island one of the most prosperous countries in South-East Asia. According to the Heritage Foundation’s Economic Freedom Index, Taiwan is the sixth freest economy in the world, which significantly increases its economic attractiveness. On the contrary, the People’s Republic of China is among “mostly unfree” states and comes in at 107th place.


A value-based friendship

Western media has often viewed the CEE region as a homogenous post-communist area, with democratic backsliding, elite capture and corruption. Beijing’s emergence in the region has largely intersected with democratic backsliding, particularly in Hungary and Poland. While the region attempted to strengthen ties with Beijing, it has further damaged its reputation, and this fact has become a worrisome issue for the West. 

The 17+1 initiative has been widely seen as a forum providing China significant leverage over the region through investment, infrastructure and transport projects. Even though the Chinese engagement has not brought a significant amount of incentives, the platform has still drawn acute Western criticism for allegedly imposing an authoritarian ‘China model’ in the region and for demonstrating “the same aggressive behaviour as Russia”. 

Hence, even though CEE countries have been following a pragmatic approach toward China, interacting with the authoritarian regime without accruing economic benefits entails significant risks and damages the international image of the entire region. The pragmatic foreign policy of the CEE countries, except Hungary, follow the ‘backward-looking’ rationality which emphasises the totalitarian Communist past of the region in decision making. In this regard, Taiwan’s society-centric model, which entails intellectual, cultural and people-to-people exchanges, is preferable to the CEE region as opposed to China’s hardcore diplomacy. 

Picture 1. Czech Senate president Miloš Vystrčil and Taiwanese President Tsai Ing-wen (Source: Taiwan Insight)

Furthermore, party politics has been an important impetus for the newfound openness between the region and Taiwan. The Taiwanese government pursues the ‘diplomacy of democracy’ approach to promote the image of itself as a democratic country that upholds human rights and shares the EU’s underpinning values. For instance, when Taiwanese President Tsai Ing-wen expressed her gratitude to the Czech Republic in response to the 30,000 Covid-19 vaccine donations, she underlined that this was a manifesto for a good friendship based on “firm partnership on the path of freedom and democracy”.

The foreign policy of most CEE states is based on liberal values as well, strongly advocating democracy and human rights in its neighbourhood. These countries often leverage their membership in the EU and NATO and utilise their bilateral diplomatic ties to motivate and support democratic norms and practices, especially in Eastern Partnership countries. In June, all CEE countries except Hungary signed the Joint Statement on the Human Rights Situation in Xinjiang. The document criticises China’s Xinjiang policies and calls for immediate access for international observers in the region, where Beijing is allegedly operating camps in which Uyghurs and other Muslim minorities are interned. The Lithuanian parliament also adopted a resolution that condemned the alleged violations of human rights.                                                                                                  

The region’s recent rapprochement to Taiwan shows that some CEE countries are not willing to risk their global image for a cooperation with China that has been nowhere near successful. By turning to Taiwan and capitalising potential opportunities with the democratic country, CEE states can escape China’s “charm offensive”, benefit financially and, at the same time, contribute to global democracy promotion.

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