Belgium — Den of Chinese spies and gateway for China

The host to EU institutions and NATO headquarters, the European nation is an alluring draw card for China: 250 Chinese spies were working in Brussels — more than from Russia.

By Alan Crawford and Peter Martin 

When a suspected Chinese spy was extradited to the US last year, the US Department of Justice praised the “significant assistance” given by authorities in Belgium.
Xu Yanjun was arrested in Belgium after going there to meet a contact “for the purpose of discussing and receiving the sensitive information he had requested,” the US indictment said.
Xu was charged with attempting to commit economic espionage, with GE Aviation the main target. The case is pending.
Belgium might seem an unlikely destination for a Chinese agent, but it is a den of spies, the Belgian State Security Service (VSSE) says.

It says the number of operatives is at least as high as during the Cold War and Brussels is their “chessboard.”
Host to the EU’s institutions and NATO headquarters, Belgium is an alluring draw card for aspiring espionage-makers. 

Diplomats, lawmakers and military officials mingle, sharing gossip and ideas, while Belgium’s strategic location makes it important to China in its own right as a place to exert its influence in Europe.
“The mere fact that we hold international institutions such as NATO and the EU makes Belgium a natural focus for China,” Brussels-based Egmont Royal Institute for International Relations research fellow Bruno Hellendorff said. 

“It’s common knowledge that there are many spies in Brussels, and these days espionage from China is a major and growing concern.”
German newspaper Die Welt in February cited an unpublished assessment by the EU’s European External Action Service that about 250 Chinese spies were working in Brussels — more than from Russia.

Famous Chinese spy Song Xinning

Song Xinning, a Chinese director of the Confucius Institute at VUB Brussels University, was in October barred from entering the EU Schengen area for eight years after being accused of espionage.
An insight into the methods employed by China are outlined in the Xu indictment.

His duties included obtaining trade secrets from aviation and aerospace companies in the US, “and throughout Europe.”He used aliases and invited experts on paid trips to China to deliver presentations at Nanjing University of Aeronautics and Astronautics, operated by the Chinese Ministry of Industry and Information Technology. 

He ensured targets carried a work computer whose data could be captured.
The US remains at the core of Beijing’s espionage activities — the head of the FBI in July said that China was trying to “steal their way up the economic ladder at our expense.”
Yet Europe appears increasingly in focus, with cases of interference by China identified in Poland, France, Germany and the UK.
“The Chinese are becoming far more active than they were 10 or 20 years ago,” said former British diplomat Charles Parton, who has more than two decades of experience of China.
Espionage is “the far end of the spectrum” of interference that ranges from academia to “technological spillover” — collecting data to send back to China for mining, London-based Royal United Services Institute senior associate fellow Parton said.
Belgium’s elite generally has a relaxed attitude toward China that can open it to charges of complacency. 

A fractured political system makes it harder to craft a unified strategy — there is still no government six months after elections.A delegation to China this month included four ministers responsible for trade relations — a federal minister plus one each for Dutch-speaking Flanders, Francophone Wallonia and Brussels.
Even as the EU adopts a more skeptical stance toward China — losing its naivety, as one senior European official put it — Belgium is opening the gates to Chinese investments in strategic areas from energy to shipping and technology.
Belgium is responding to China’s rise “in a pragmatic way,” stressing its advantages in areas such as logistics, while ensuring “attention to the sustainability of the projects and respect for international standards,” the Belgian Ministry of Foreign Affairs said.
“They [Belgium] have very advanced technologies that China needs,” said Renmin University Institute of International Affairs director Wang Yiwei 王義桅, a former Chinese diplomat based in Brussels. 

“Through Brussels you can access Europe and even the United States.”
He said that Chinese innovation is fast catching up with the US.
All nations make efforts to win over hearts and minds, and much influence-building is legitimate diplomatic activity, but there is also a gray zone and it can be “difficult to tell the hand of the Chinese state from a much more diffuse web of influence-peddling,” the European Council on Foreign Relations said in a 2017 report.

Flemish Quislings

Brecht Vermeulen, chairman of the Belgian parliament’s home affairs committee until losing his seat this year, joined parliament’s China friendship group soon after his election in 2014 as a lawmaker for the Flemish nationalist N-VA party, the largest group in the then-ruling coalition.
Over the course of his five-year term, Vermeulen made several trips to China, where officials briefed him on technological advances in artificial intelligence, facial recognition and cybersecurity.
During that time, N-VA policy evolved from sympathizing with efforts by some in Taiwan and Hong Kong to keep a distance from China, toward what Vermeulen called “Realpolitik.”
“I think we must open more doors to the Chinese and see how they react,” Vermeulen said in an interview in Ghent. 

“If they open their doors, too, then it’s good on both sides. Of course, we are a small country and China is enormous, but if we act in one way and there’s a reaction in the same way, then OK, we can proceed, step by step.”
Still, there are signs that the Belgian authorities are attuned to potential threats.
State Grid Corp of China, which has more employees than Brussels has inhabitants, in 2016 bid for a stake in energy company Eandis. 

A last-minute leak of a VSSE dossier urged “extreme caution,” citing the risk that Belgian technology could be used by the Chinese military, and a planned vote on the bid never took place.
Engaging with China’s influence apparatus is not without risks.
Filip Dewinter, a regional lawmaker with the far-right Vlaams Belang party, was investigated over his ties to an organization suspected of spying for China. 

The probe was dropped after it was found Dewinter had committed no crime.
“Maybe I had too much faith in these people,” De Morgen cited Dewinter as saying in February, adding that he was now “more informed” about Chinese espionage and the need “to be careful.”
However, while there is now “some strategic thinking” on China in Belgium, the institutional setup means it is not across the board, Hellendorff said.
He sees “little to no dialogue between regions on the implications of growing Chinese investment in the country, not only in economic terms, but also in terms of its impact on values and influence.”That lack of coordination between regions and layers of government allows Antwerp Mayor Bart de Wever to play an outsize role in ties with Beijing. 

Antwerp is home to Europe’s second-largest port and has a direct rail link to China.
Wang thinks bilateral relations are developing well.
“In Europe there’s a saying that small is beautiful,” Wang said. 

“Belgium is beautiful in the Chinese understanding.”

Chinese Peril

China's Spreading Influence in Eastern Europe Worries West
Associated Press
In this photo taken Friday, March 1, 2019, a woman walks by Chinese flag placed on a street in Belgrade, Serbia.

BELGRADE, SERBIA — Coal-powered plants, mobile networks, major bridges, roads and railways: Chinese investments have been booming throughout Central and Eastern Europe's cash-strapped developing countries, even as European Union officials scramble to counter Beijing's mounting economic and political influence on the continent.
EU member Croatia is hosting a summit Thursday between China and 16 regional countries -- the 8th so far -- that focuses on expanding business and other links between China and the region, which Beijing sees as a gateway into Europe.
The gathering in Dubrovnik of the so-called 16+1 initiative consists of Central and Eastern European countries that have endorsed China's ambitious global "Belt and Road'' investment project, which has triggered concerns among some key EU states about increased Chinese political and economic clout in the region.
China has already invested billions of dollars in various infrastructure projects in Central and Eastern Europe. 

Western leaders worry that further investment in the states that are EU members -- or those hoping to join -- could mean lower environmental and other standards than those in the rest of the bloc.
Thorny issues include the flouting of EU competition rules, potential over-borrowing by some of the states, the quality of constructions, and security concerns over high-speed 5G network technology supplied by Chinese companies. 

Critics also say that in return for allowing Chinese expansion into the region, Beijing should give better reciprocal access for European companies to Chinese markets.
Top Chinese officials have sought to alleviate EU fears of unfair competition from Chinese state-controlled companies, which benefit from the government's financial backing. 

Chinese dictator Xi Jinping agreed during a recent visit to Paris to work with European leaders to seek fairer international trade rules.
French President Emmanuel Macron, Xi Jinping and European Commission President Jean-Claude Juncker hold a news conference with German Chancellor Angela Merkel at the Elysee presidential palace in Paris, France, March 26, 2019.

​Of the 16 participating countries -- Albania, Bosnia, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia -- 11 are EU member states, and the remaining five want to join.
Beijing has marketed its expanding initiative as a way to give some of Europe's neediest countries a financial boost, helping them gain access to more trade and investment. 

That has been mostly welcomed by the Central and Eastern European nations.
Major Chinese-led infrastructure projects in the region include a planned high-speed railway from the Hungarian capital, Budapest, to Belgrade in neighboring Serbia. 

The line will link up with the Chinese-controlled port of Piraeus in Greece as an entry point for Chinese goods to Central and Eastern Europe.
The project has drawn scrutiny from the EU because Chinese state-owned banks would provide financing, and Chinese companies would supply technology and the actual building. 

That conflicts with EU rules requiring public works to be broken into segments small enough to attract multiple bidders.
Hungarian Prime Minister Viktor Orban, whose own government often has been criticized for anti-democratic policies, says Hungary's relations with China should be based on "mutual respect.''
Hungary last year did not sign an EU report criticizing China's human rights record and business policies.
In Serbia, an EU membership candidate, Chinese companies are building major bridges and highways. 

They are also constructing a large coal-powered electricity plant even as China is trying to curb pollution at home by implementing renewable energy projects and reducing the use of lignite, by far the most polluting fossil fuel.
Power grid stand against the residential and office buildings in Beijing as the capital of China is shrouded by mild pollution haze on June 5, 2017.

Serbian analyst Mijat Lakicevic said the strategically-located Balkan country situated between East and West is a perfect place where "China can realize its economic concept, the way it wants to enter (Eastern European) markets,'' without much concern over fair bidding processes or pollution standards.
Bosnia, a potential EU candidate, is at odds with the bloc over its decision to issue a public guarantee for a 600-million euro ($676 million) loan from China's Export-Import Bank to expand Bosnia's largest coal-fired power plant.
EU's energy watchdog has warned that the move could eventually harm Bosnia's bid to join the EU because the agreement violates EU's subsidy and environment rules. 

Enlargement Commissioner Johannes Hahn has said the issue "raises serious questions'' about the Balkan country's "commitment to international treaties (and) European rules.''
Chinese companies are also involved in the construction of a $380-million Peljesac bridge in Croatia, which links two coastal parts over the Adriatic Sea, as well as a highway linking the Adriatic in Montenegro to neighboring Serbia.
In the Czech Republic, the National Cyber and Information Security Agency followed U.S. authorities' warning against the use of hardware or software made by Chinese companies Huawei and ZTE. 

That, however, did not change Czech President Milos Zeman's positive stance toward Huawei.
Zeman publicly criticized the Czech watchdog, saying it harms the Czech Republic's business interests as it could affect Huawei's plan to invest $370 million in 5G networks in the Czech Republic.
U.S. officials mounted an international campaign to keep Huawei gear out of any foreign 5G network that might carry sensitive U.S. intelligence.

"Italy joining China’s Belt and Road project is geopolitically unwise", former prime minister says

Italy’s government provoked controversy as it joined China’s Belt and Road Initiative, becoming the first EU and Group of 7 country to do so.
By Natasha Turak

Ex-Italian PM: Important to pay attention to Belt and Road initiative
Italy’s former prime minister doesn’t approve of the current government’s newly inked partnership with China, calling the decision “unwise” during a conversation with CNBC Monday.
“Politically, geopolitically, I deem (it) really unwise from the Italian government to take such a decision without coordination with the European Union and our allies,” Paolo Gentiloni, who served as prime minister from 2016 to 2018, told CNBC’s “Squawk Box Europe.”
“Europe is showing its divisions toward China, and this is not something that will strengthen our position even on trade.”
The Italian government stirred up fresh controversy over the weekend as it officially agreed to join China’s massive Belt and Road Initiative (BRI), becoming the first EU and Group of 7 country to do so.
Chinese dictator Xi Jinping’s visit to Rome saw a total of 29 deals signed, altogether worth 2.5 billion euros ($2.8 billion). 

They were focused on agricultural, finance and energy sectors, and opened up new access to the Chinese market for major Italian energy and engineering firms.
Gentiloni, who himself visited China in 2017 to discuss the Belt and Road initiative with Beijing’s leadership, echoed the analyses of many observers who described the deals signed as largely symbolic and not an economic paradigm shift for Italy.
“The agreements signed in Italy are not so relevant from an economic point of view,” he said.
“We will not change the mood of our economy with these agreements, and my guess is that perhaps we will not even change the balance of trade between Italy and China, which is unfortunately a balance of deficit on the Italian side.”
But politically, he stressed, “I am worried that we are not showing EU unity, and for this reason I think that the MOU (memorandum of understanding) that was signed from the Italian government was not a wise decision.”
Gentiloni is a founding member of Italy’s Democratic party, whose stances are largely described as a social democratic, center-left and Europeanist. 

Italy is currently led by a euroskeptic coalition whose largest parties are the anti-establishment Five-Star Movement and the right-wing Lega party.

‘Italy is not an African country’
Western critics warn of Chinese debt traps and describe the initiative as a ploy to expand geopolitical and strategic influence, while Beijing pursues links to Europe and Africa via South Asia and the Middle East to expedite and increase the export of Chinese goods.
German foreign minister Heiko Maas criticized Italy’s decision on Sunday, telling local media: “If some countries believe that they can do clever business with the Chinese, then they will be surprised when they wake up and find themselves dependent.”
Still, in defense of his country, Gentiloni dismissed concerns that Italy would become economically beholden to China in the way that some African and South Asian nations have.
“Italy is not an African country … We will not have a Chinese invasion after these agreements,” he said, pointing out that Italy has less Chinese inward investment than the U.K. or Germany.
“We have to be very cautious especially in issues connected to security, telecommunications, but I don’t think these agreements economically will change much in the framework we have.”
Indeed, Italy is not an African country — it has a higher debt-to-GDP ratio and far lower growth than most countries on the African continent. 

Its economy dipped into recession at the end of last year, and the deadly collapse of its Genoa Bridge last August cast a stark spotlight on its dire need for infrastructure investment.

China and 5G: Avoiding ‘dangerous situations
Gentiloni stressed caution toward China when it comes to sensitive sectors like telecommunications, an issue dominating headlines recently amid the U.S. government’s global campaign against Chinese telecoms giant Huawei. 

Washington says Huawei’s role in building 5G internet infrastructure around the world is a security threat and will allow the Chinese government to spy on users, a claim Beijing rejects.
“I think we have to be very cautious and careful, exactly in this subject,” the former prime minister said.
“Strategic infrastructure and telecommunication infrastructure, and this means now 5G ... We have a very modern infrastructure for mobile phones in our country, we don’t particularly need foreign investment, and in any case we have a law — the golden power law — that allows the Italian government to avoid any form of control in our telecoms infrastructure.”
Italy’s “golden power” legislation refers to state powers designed to protect strategic industries, which it says it plans to extend to 5G technologies. 

This would entail requiring Italian companies in both the private and public sectors to declare to the government any 5G technology purchased from non-European countries.
“I hope that the new government will use these means, these tools, to avoid dangerous situations,” he added.

Europe raises flags on rampant China’s cyber espionage

By LAURENS CERULUS 

The EU is gearing up to confront China on alarming levels of Beijing-linked cyber espionage on European industry.
The European Commission’s department for industry is drafting a document that would sum up Europe’s worries on the issue, two sources briefed on the plan told POLITICO, and could still come up with new measures to defend European trade secrets during this mandate, which ends in May next year.
The European Commission Thursday met a group of national government experts, foreign affairs officials and industry lobbyists to go over a study by PricewaterhouseCoopers and the Commission department that is likely to lead to EU action in coming months.
The study, an executive summary of which was obtained by POLITICO, offers a peek into “public and private sector concerns about the increasing risks associated with cyber-theft of trade secrets in Europe.”
In the manufacturing sector, it said, industrial espionage and cybertheft of trade secrets constitute up to 94 percent of all cyberattacks. 

The summary cites estimates that Chinese cyber espionage is costing Europe up to €60 billion in economic growth — a figure that would rise as European companies digitize their services.

Previous reports have consistently pointed fingers at Beijing as the world’s most active government on cyber espionage.

PwC will finalize the report later this month, it said at Thursday’s meeting, after which the Commission would release it and work on its own follow-up.
The Commission’s initiative comes as Bloomberg Businessweek on Thursday published a extensive investigation into how manufacturing subcontractors in China implanted chips as tiny as a grain of rice in parts of servers that make their way onto the global market and into the server centers of cloud services giant Amazon Web Services, Apple and other tech firms. 

The microchips would give Chinese actors access to data touching the servers.

Previous reports have consistently pointed fingers at Beijing as the world’s most active government on cyber espionage. 

A 2013 study by Mandiant raised flags across the world and governments have sought to strike deals with China to stop the practice.
The U.S. struck a deal with China in 2015. 

But intelligence officials have complained that Chinese counterparts have failed to abide by the terms of the agreement. 

On Wednesday, the Department of Homeland Security warned industry that the Beijing-linked “Cloudhopper” hacking group is again launching a widespread campaign on technology service providers to hack and steal industrial secrets.
The PwC study recommends that the European Union, as well as member countries, engage in talks similar to the U.S.-China dialogue. 

It also says that the EU could broaden its requirement to report cyber incidents to companies outside of critical infrastructure sectors. 

It adds that 60 percent of respondents that agree with the need for notifications said that such a notification system should be made mandatory across the EU.
Compared to national governments in and beyond Europe, the EU has in the past been cautious about wading into the debate. 

It lacks an intelligence agency, and is still struggling with the question of whether and how it can attribute cyberattacks to third countries — a naming-and-shaming power that is currently the purview of member countries and not Brussels.
European industry is getting increasingly anxious about the issue, however.
The PwC study says people working in industrial sectors in Italy, France, Germany and the Netherlands are most concerned about cyber espionage. 

Germany is most affected, the study says, as 17 percent of companies reported the theft of sensitive data between 2015 and 2017.
Europe’s largest business lobby BusinessEurope released a statement Thursday in which it asks the EU to come up with a “strategy to deter hostile actors” like China. 

“Diplomatic action or economic retaliation could be considered,” the group says, adding that “the EU could seek to cooperate with the United States, Japan and other OECD economies to apply political pressure.”

China's 16 European Horses

Beijing is lending billions to Hungary and Serbia for a faster rail link. The project has been called insane. But for China, at least, there’s method in the madness.
By Nick Miller

The nine-hour rail trip from Budapest to Belgrade gives new meaning to a slow Europe experience.

At 11.25am a whistle blows and our spray paint-smeared train pulls out of Belgrade’s 130-year-old central station, over weeds and crumbling concrete, past decades of neglect.
For the next half-hour we move at barely walking pace, crawling past old signal boxes, creaking over a narrow, rusty bridge.
Gradually we pick up speed. 

Not much, though. 

The single-track Belgrade-Budapest line was built in 1883 and last renovated in the 1960s. 

It’s not in a good way.
Children stare glumly out the windows at endless flat fields of unripe wheat, rippling green under the Central European sun.
There will be nine hours of this. 

Testing for even the biggest wheatfield fans.
At 8.24pm: stop number 25, Budapest. 

We’ve travelled roughly the distance of Sydney to Canberra, or Melbourne to Warrnambool, at an average speed of 30km/h, sometimes much slower. 

At one point we pause for half an hour then spend the rest of the trip going backwards.
“This is a catastrophe,” laughed passenger Gabriella, 43, who takes this train for a portion of its journey several times a week for work. 

“It smells like wet dog shit and it’s slow.”
One winter day she spent her journey counting deer in the snow out the window. 

She got to 72 before she gave up.
Some of Europe’s famous train trips promise old-fashioned romance, others high-tech speed.
The Belgrade to Budapest line delivers new, almost inconceivable levels of dullness.
But here’s the good news: China has promised to fix this. 

To help fund and build a modern, high-speed connection that will cut the journey time by a factor of three (making it just about faster than driving).
Gabriella has heard. 

She’s excited at the prospect.
“The only question is, why are they giving us the money?” she says.
It’s a very good question.

The train creaks along at 30km/hr.

All aboard?
In February, Germany’s then foreign minister Sigmar Gabriel gave a surprisingly frank assessment of what he believed China is up to in Europe right now.
“The initiative for a new Silk Road is not what some people in Germany believe it to be – it is not a sentimental nod to Marco Polo,” he told the Munich Security Conference.
“Rather (it) stands for an attempt to establish a comprehensive system to shape the world according to China’s interests.”
He didn’t blame China for trying it on, he said. 

But that didn’t mean Europe should let it happen.
“Powers such as China and Russia are constantly trying to test and undermine the unity of the European Union. Individual states or groups are tested with sticks and carrots to see whether they want to remain in the community that is the European Union.”
He, and other politicians in Berlin and Brussels, want to push back. 

There have been talks of a counter-Belt and Road fund, a way to export liberal European values counter to China’s vision of a new world order.
Others believe this is an overreaction.

But if what Gabriel fears is true, nowhere is it more true than in that most recalcitrant EU member state Hungary, which hosts the second half of our interminable train trip.
“We in this region have looked at China’s leading role in the new world order as an opportunity rather than a threat,” Hungary’s foreign minister, Peter Szijjarto, said last November – as his prime minister, Viktor Orban, prepared to sign 11 bilateral agreements with China and announced the opening of tenders for the Hungarian section of the train link to Belgrade, at the 16+1 summit in Budapest.
The 1 is China and the 16 are 11 eastern EU nations and five other European countries on the Balkan peninsula. 

The 16+1 format was born in 2012, with a permanent secretariat and yearly meetings.
The Belgrade-Budapest railway is intended to be a breakthrough project for 16+1.
But here’s a funny thing: no-one really asked for it.

Passengers are few and far between on the route. 

Mystery train
“Most Western and Hungarian experts say it’s insane to build the Belgrade-Budapest railway line,” says Tamas Matura, founder of the Central and Eastern European Center for Asian studies and assistant professor at the University of Budapest.
The government’s official justification for the project is literally a state secret. 

But academics have reverse-engineered the proposed $3.6-billion Hungarian leg, 152 kilometres of double-track railway over mostly flat ground, engineered to a 160km/h top speed and designed to take passenger trains and 750-metre-long freight trains.
There’s currently almost no commerce on this route, and less passenger traffic. 

Eastern Europe’s traditional connections go east-west, not north-south. 

Hungary’s biggest trade partners are in western Europe, and to a lesser extent Ukraine and Russia. Serbia is almost not on the chart.

It will take 2500 years to make a profit on the Belgrade-Budapest line.

And the link doesn’t come cheap. 

The Hungarian section will cost 750 billion forints ($3.6bn), 85 per cent financed by Chinese loans. 

Plus interest, the whole project will cost an extra $1 billion – and according to reports, the interest rate will be higher if Chinese companies don’t win the construction tenders (a matter of some contention, as EU rules insist on transparent, competitive public procurement).
On current figures, even given a generous multiplication factor for new trade opportunities, it will take 2500 years to make a profit on the Belgrade-Budapest line, says Matura. 

And that’s assuming it doesn’t need maintenance.
This is “building pyramids” kind of thinking, says another Hungarian expert, Adam Bartha, director at EpiCenter, the European Policy Information Center. 

And he points out that Hungary is the second-largest net recipient of EU funds per capita after Poland, so it was never about the money anyway.
Matura agrees: “Central Europe is not in need of liquidity, we have money,” he says. 

“And even if we want to build certain infrastructure projects, we get non-refundable European money.”
Says Bartha: “There are a lot of unanswered questions about this project.”

China's then vice-premier Zhang Dejiang addresses workers in Piraeus in 2010.

From Beijing’s perspective, the railway makes more sense.
China’s biggest shipping company, COSCO, bought a majority stake in the big Piraeus port in Greece in 2009.
The Belt Road Initiative (BRI) plan is to link China’s maritime routes from Asia, around Africa and into the heart of Europe via Piraeus – which is being aggressively expanded, with a plan to double its container volume in the next couple of years.
Hungary’s foreign minister Szijjarto says the train line from Belgrade to Hungary will be part of the main transport route for Chinese goods that arrive at Piraeus and head into Europe.
But Matura suspects that China has based its plans on a misunderstanding of the region – they just “looked at a map” rather than doing the sums, he says.
“To be fair, the Chinese way of thinking is very different from the Western,” he says. 

“We have a demand-based way of thinking: if there is a demand for something, we supply. In China it’s completely the other way around... there is even an ancient Chinese saying, ‘let’s build a road and they shall come’.”

Piraeus, flush with Chinese investment, is a portal to and from Europe. 

It’s a win-win proposition for China, anyway. 

They have insisted on guarantees so they will get their money back, plus interest, no matter what happens with the railway. 

Of course, they would prefer that it stimulates trade but it’s not essential.
And, once complete, it will be a demonstration project for Chinese companies keen to tap into the European market.
But that doesn’t explain why Hungary wants this train line, where there are many other infrastructure projects that would provide a bigger economic boost for the country -- nor why it wants China to fund and build it.
“Big question mark. Pretty big question mark,” says Matura.
Eva Balogh, a historian and publisher who blogs on Hungarian current affairs, wrote in November that the very unprofitability of the project explains the decision to go to China.
“The lure of the project, if it ever becomes reality, is that China might use Hungary as a distribution hub,” she said. 

“For that elusive prospect, the Orban government is ready to get involved in this risky venture.”
Matura says there is also some limited political value for Orban in having big non-EU investors: Hungary is one of the EU’s most perverse members, an “illiberal democracy” that often zags when Brussels zigs. 

Big allies outside Europe help Orban flaunt his independence.

The trip is long but the timeline on the tender was short – very short. 

But other knowledgeable observers, who spoke to The Age-SMH asking not to be identified, say there’s a more obvious reason the Hungarian government loves a big public project funded by a big pot of money: the opportunity to parcel it out to their mates.
Systemic corruption in Hungary’s public procurement system adds more than 20 per cent to the cost of government contracts, according to Transparency International. 

“In many cases the private sector trust in public procurement processes is so low that they don’t even bother to bid,” it said in a recent report.
The timeline on the tender process for the new train line was remarkably short – often an indicator that a tender has an invisible inside track.
Neither tender bidders nor the winner have yet been made public, but it’s very likely the money will end up, in part, in the pockets of oligarchs closest to the government, many of whom have become remarkably rich in recent years.
In 2016, a researcher from the Central European University in Budapest, Anita Koncsik, wrote that public procurement has become Hungary’s “most important payout channel enabling the allocation of state funds to government-friendly economic players”.
So much for Hungary. 

But is China getting more than a nice rate of return?
“For the first few years of 16+1 relations I really believed the Chinese intentions were mainly focused on economics,” says Matura.
“But it seems that in the past few years it turned towards political influence. I don’t know whether it was intentional from the very beginning or they changed their minds because they realised that the economic cooperation wasn’t going well.”

16+1 members have acted against the EU, including on issues to do with the Belt Road. 

How 16+1 is adding up
To the 16 members of the 16+1’s dismay, the economic flow from China has been much bigger in Europe’s west than east. 

Chinese foreign direct investments in the EU reached 35 billion euros in 2016, a 77 per cent increase over the previous year. 

Bloomberg has calculated that around 360 European companies have been taken over by China, from Italian tyre-maker Pirelli to Irish aircraft leasing company Avolon Holdings Ltd. 

It has gobbled up office towers in the City of London, a German robot maker, a Scandinavian carmaker and a Swiss pesticide maker.
Germany has tightened its investment rules in response. 

It is concerned about “technology flow” from Germany to China as well as security questions, its economy minister said in February.
France and Italy have joined in a push for a tighter screening regime for outside investments allowing the European Commission the right to supervise investments.
But while the west pushes back, there are some signs in Europe’s east of more favorable China policies.
In 2016, Hungary and Greece blocked the common position of the EU Council on China’s activities in the South China Sea. 

They were joined by Croatia and Slovenia. 

And in 2017, Hungary and the Czech Republic signed a joint declaration on the principles of financing BRI, against the recommendation of the European Commission.
The EU is increasingly suspicious that BRI is a part of the inspiration for this dissent. 

And it objects to the way China does business.
In April, Handelsblatt reported that 27 of the 28 national EU ambassadors to Beijing had compiled a report sharply criticising the Silk Road project because it “runs counter to the EU agenda for liberalising trade and pushes the balance of power in favour of subsidised Chinese companies”.
Only Hungary’s ambassador refused to sign the report, which was part of preparations for an EU-China summit in July.
The report said China was seeking to shape globalisation to suit its own interests, and should be pushed to adhere to European principles of transparency in public procurement, as well as environmental and social standards.
Whenever European politicians travel to China they are put under pressure to sign bilateral agreements to expand the Silk Road, the ambassadors said – deals that “lead to an unequal distribution of power which China exploits”.

China's influence might not be so great in Europe after all. 

Are we there yet?
Not everyone is panicking over China’s presence in Europe’s east, though.
A paper by Polish think tank OSW last September found that “Beijing has not succeeded in making an attractive offer to the region’s EU member states, who make up the majority of the participants in the 16+1 format”.
If China has a “strategy of divide et impera, aimed at breaking up the unity of the European Union” it was not having much effect, the paper said.
“The much-discussed infrastructure cooperation has not even started,” authors Jakub Jakobowski and Marcin Kaczmarski wrote. 

“Consequently, Beijing has failed to obtain the political tools which could have weakened policy coherence at the European level, or even divided the EU.”
China has two big problems driving the BRI into the EU, the authors wrote.
Their funding model linking loans to the appointment of the contractor without an open tender is incompatible with EU law.
And the EU just isn’t short of money at the moment.
“Allegations appearing in the public debate that the countries of the 16+1 have been fostering divisions within the EU seem to be substantially incorrect,” the OSW paper said. 

“As long as Central and Eastern Europe remains capable of pursuing its economic and developmental interests within the architecture of the European Union, the political risks coming from China’s capital inflow will remain limited.”
Much like that train from Belgrade, it’s proving a slow, sometimes frustrating journey for the Chinese as they try to push their influence north and west.

Just a handful of tourists opt for this rail experience. 

Chinese State Hooliganism

EU, Sweden call for China to release detained publisher
AP

In this June 18, 2016, file photo, freed Hong Kong bookseller Lam Wing-kee stands next to a placard with picture of missing bookseller Gui Minhai, in front of his book store in Hong Kong as the protesters are marching to the Chinese central government's liaison office. Gui, who was secretly detained in China has been taken away by Chinese authorities again after being released into house arrest last October, his daughter said Monday, Jan. 22, 2018. 

BEIJING— The European Union on Wednesday joined Sweden in calling on China to immediately release a Swedish book publisher who was taken off a train in front of his country's diplomats by Chinese police four days ago.
The Chinese foreign ministry on Wednesday indicated Gui Minhai, the Hong Kong-based book publisher, and the Swedish diplomats who were with him may have been breaking Chinese law.
Gui was first abducted in 2015, one of five Hong Kong booksellers whose disappearances became a symbol of the extent to which China was willing to reinforce its hard line on squelching political dissent and a free press — despite international criticism.
The office of EU foreign policy chief Federica Mogherini said it "fully supports the public statement and efforts of the Swedish government" on Gui's behalf.
"We expect the Chinese authorities to immediately release Mr. Gui from detention, allow him to reunite with his family and to receive consular and medical support in line with his rights," it said in a statement.
On Tuesday, Swedish Minister for Foreign Affairs Margot Wallstrom said in a news release that China has given no clear explanation for Gui's detention. 

Sweden has already summoned China's ambassador in the Scandinavian country over the 53-year-old's case.
"We take a very serious view of the detention on Saturday of Swedish citizen Gui Minhai, with no specific reason being given for the detention, which took place during an ongoing consular support mission," Wallstrom said in her statement.
"We expect the immediate release of our fellow citizen, and that he be given the opportunity to meet Swedish diplomatic and medical staff," she said.
Wallstrom said the Swedish diplomats accompanying Gui had been "providing consular assistance to a Swedish citizen in need of medical care.
"This was perfectly in line with basic international rules giving us the right to provide our citizens with consular support," she said.
Gui had been running a Hong Kong publishing company specializing in tales about high-level Chinese politics when he disappeared from his Thai holiday home about two years ago. 

He had been spirited away by Chinese security agents to mainland China, where he later turned up in police custody. 

In a videotaped confession that was coerced, Gui stated that he'd turned himself in to mainland authorities over a hit-and-run accident.
He was released into house arrest in October in the eastern city of Ningbo, living in what his daughter Angela called a police-managed apartment.
His daughter told Radio Sweden, the English-language service of national broadcaster Sveriges Radio, that her father was on a train with two Swedish diplomats on Saturday when a group of police officers seized him.
She said her father was traveling to Beijing to see a Swedish doctor after he was diagnosed with amyotrophic lateral sclerosis, a neurological disease that he developed while in custody.
Gui's 2015 abduction reinforced rising fears that Beijing was chipping away at the rule of law in Hong Kong, a semiautonomous Chinese city that is promised civil liberties such as freedom of speech until 2047.
The books Gui and his colleagues sold at their Causeway Bay Bookshop were popular with visitors from mainland China, where such titles are banned.

Chinese authorities have a history of continuing to persecute political prisoners even after their release from prison and other legal strictures.
Noted human rights lawyer Gao Zhisheng recently disappeared back into custody after five years of prison and three more years confined by guards at home. 

Liu Xia, the wife of the late Nobel Peace Prize laureate Liu Xiaobo, has been held a virtual prisoner for years despite never being charged.
Since her husband's death in July while serving a prison sentence, Liu has had virtually no contact with friends or family and the authorities will not say where she is currently being held.

Rogue nation: Why Europe need not kowtow to China

With a modicum of confidence, EU nations can set the terms of the relationship 
By PHILIP STEPHENS

Economic weakness has seen EU governments allow Beijing to play divide and rule 

It is a commonplace in Chinese commentary that Europe is in irreversible decline.
Hope, you suspect, is welded to expectation.
Democracies, the story goes, are in trouble as the old economic powers are left behind.
China is stealing a technological march.
As the US turns inward, an enfeebled Europe will have to turn eastward.
China’s grand “one belt, one road” project will connect east to west, new to old.
Guess who will be in charge?
Western liberalism, this prognosis has it, has outlived its time.
Cumbersome, inefficient and divisive, it lacks the unity of purpose harnessed by autocratic regimes.
Nor can it any longer meet the demands of the people — witness the trouncing of the old elite by Donald Trump in the US and the nationalist backlash in much of Europe.
The future belongs to strongman leaders untroubled by the competing demands of pluralist societies — Vladimir Putin in Russia, Recep Tayyip Erdogan in Turkey and, above all, China’s Xi Jinping. Europeans are often too feeble in the face of such jibes.
The autocrats, otherwise intelligent people mutter, have a point.

Xi has attached the might of the state to his great China dream.
The breathless advance of technology is allowing autocrats to tighten their grip on the state.
Look at China’s chilling experiment to capture digitally every detail of its citizens’ lives in a single electronic “rating”, combining everything from credit status to fealty to the party.
Economic weakness at home has seen EU governments scramble for the benefits of doing business with a booming China. 
They have allowed Beijing to play divide and rule. 
London, Paris and Berlin have had their sights on the rich market for exports; smaller economies on the eastern periphery seek a new source of investment.
Human rights now take a back seat. 
Only the other day, 16 leaders from the eastern half of the continent paid homage to Chinese premier Li Keqiang at a summit in Budapest.
All true.
But, as the European Council on Foreign Relations says in an excellent analysis of the balance of power in the EU-China relationship, even the most enthusiastic mercantilists have begun to count the costs of doing business with Beijing. 
Win-win too often refers to a double whammy for China. 
 There is anyway a bigger flaw in these grand predictive sweeps.
The organising assumption is that history travels in straight lines — that Europe’s troubles are inescapable and that China will be forever impervious to the economic cycle and the human desire for freedom.
To the contrary, the EU is on the mend.
Sure, Britain is leaving, but every passing week simply confirms Brexit as a grotesque act of self-harm. 
The rest of the continent has rediscovered economic growth.
Unemployment is falling and investment rising.
Greece no longer threatens to collapse the eurozone.
The migration crisis has subsided.
There are strong hopes in Paris and Berlin for a reinvigoration of the Franco-German relationship.
In short, Europe no longer feels like a continent flat on its back.
 As for European democracy, the populists have been held at bay.
For all the imperfections, successive crises have also shown the peculiar resilience of democratic systems. 
Chucking out the rascals is a safety valve.
Angry though they might be, voters are not clamouring for curbs on individual freedom or yearning for despotic rule.
What is needed now is for Europe to recover confidence in its values and institutions.
The oft-rehearsed argument between those certain that China will soon rule the world and others sure that it will collapse under the collision of rising living standards and political repression is a silly one. What can be sensibly be said is that China has plenty of hurdles yet to jump before it realises Xi’s dream.
Party rule rests on a fragile bargain — economic prosperity in return for the absence of freedom.
One of the striking features of authoritarian regimes is their brittleness. 
They are unassailable until the moment they break.
 Where Beijing is right is that the relationship between China and Europe will be as important as any in shaping geopolitics during coming decades.
The belligerent isolationism of Trump’s foreign policy is unlikely to survive beyond his presidency, but it is a fair assessment that his successors in the White House will draw tighter lines around America’s international commitments.
 So the focus of geopolitical attention will shift from the littoral states of the north Atlantic to what the late Zbigniew Brzezinski once called the “axial supercontinent” of Eurasia.
This is the vast space over which China would like to hold sway during the second half of the 21st century.
The EU has a choice: it can be supplicant, partner or roadblock.
 Europe is rich, technologically advanced and educationally sophisticated.
“One belt, one road” is an offer it can refuse. 
At the very least it can set its own terms for the relationship.
If China wants connectivity it must open up its own economy; if it wants to be an investment partner, it should observe European standards and norms. 
All that is required of EU nations is a modicum of confidence and shared resolve. 
 Europe has taken a battering.
China’s rise has been amplified by western disarray.
Geopolitics, though, is a long game.
Not so long ago the US called itself the indispensable superpower.
Beijing is not immune from such hubris.
China may be at the gates, but Europe should feel no obligation to bow to Beijing.

China told to back off: China hits roadblocks in Central Europe

Tough competition laws and investment from the bloc slow Beijing’s infrastructure push.
By LILI BAYER

China's Trojan horse Viktor Orbán

BUDAPEST — China’s seduce-and-divide strategy in Central Europe is getting a reality check.
For years, Beijing has promoted heavy investments and a particular diplomatic format — called 16+1 — to build its influence with a cross-section of 16 Central and Eastern European countries, some that belong to the EU or NATO, some to neither. 

Chinese Premier Li Keqiang and Hungary’s Prime Minister Viktor Orbán on Monday open the sixth China-Central and Eastern Europe summit in Budapest.
This push has set off alarm bells in Brussels, in particular about Beijing’s activities in the Balkans. But it is now also running into regulatory, financial and political hurdles, highlighting possible limits to Beijing’s economic and diplomatic influence in Europe.
China’s “One Belt, One Road” program has pumped money into infrastructure, logistics and transportation networks to allow Chinese products easier access to European markets. 

Chinese officials estimate that the country has invested over $8 billion (€6.7 billion) in Central and Eastern Europe. 

This region of some 120 million is relatively new and unknown to the Chinese, but trade is growing: Last year bilateral trade between China and Central and Eastern European countries was up 11 percent from 2011.
As much as Beijing envisioned 16 Central and Eastern European countries as a cohesive entity that could work together to implement joint projects, in practice they have different priorities and operate under different legal regimes. 

The EU members among them are less welcoming to Chinese investment.

For Hungary, the host of this week’s summit and the country that absorbs the most Chinese investment in Central and Eastern Europe, Beijing is a source not only of capital but of political leverage that could play to Orbán’s advantage as his government’s relationship with EU institutions become more tense.
“As a country that cooperates with the EU, China — if it notices us, because there’s the problem of size, the problem of the difference in our sizes — can quite confidently say that they have an interest in Hungary being strong in the European Union,” Orbán said in July in his annual speech at Băile Tuşnad (Tusnádfürdő), Romania.
But China faces significant challenges as it tries to push through its plans in the region.
“Chinese investment in EU members of the 16+1 has remained limited,” said Tamás Matura, an assistant professor at the Budapest-based Corvinus University. 

“Some countries have not received any new major Chinese investors in the last five years.”
China has had more success in Western Balkan countries like Serbia, Montenegro and Bosnia and Herzegovina, “where EU funds are not available and EU regulations are not applicable,” he said.
Western Balkan leaders have warmly welcomed Chinese economic initiatives and worked to build friendly ties with Beijing. 

In Serbia, the region’s largest beneficiary of Chinese investment, China has bought factories and provided funding for roads, bridges, energy projects and railways.
“There are no problems in our economic and political relations, we are always on the same side, and when China has something to say, we are always on the side of China,” Serbian President Aleksandar Vučić said in May.
China’s flagship project in the region is the planned Belgrade-Budapest high-speed rail link, with construction work on the Serbian stretch expected due to begin this week. 

The modernized railway would enable Chinese goods coming through Greek ports to quickly move from Serbia into the EU.
Currently, the journey between the Serbian and Hungarian capitals by rail takes eight hours. 

The planned railway would allow passengers and cargo to travel up to 200 kilometers per hour, cutting travel time to less than three hours.
Progress on the project has been slow. 

The Export-Import Bank of China is expected to lend about 85 percent of the funds for the €2.4 billion-project, and an agreement between China and Hungary over the railway raised concerns within the European Commission earlier this year that the planned tender process may not be in compliance with EU rules.
“The EU welcomes investment — whether domestic or foreign — as long as it is compatible with EU law,” the EU Delegation to China said in a statement in February regarding the Belgrade-Budapest railway project.
“It is standard practice for the Commission’s services to assess the compliance of major public contracts with EU law. Against that backdrop, a dialogue with the Hungarian authorities, at technical level, is ongoing in order to seek some clarifications,” the delegation wrote.

Analysts say China is also likely to face challenges when attempting to implement projects in other Central and East European states that are members of the EU.
The bloc’s newer members are not only bound by EU competition rules, but also receive significant infrastructure funding from the bloc.
China’s interest in the Baltic states “focuses on transportation and logistics,” with Latvia hoping to offer its ports and railway network to help Chinese goods reach Scandinavian markets, said Una Aleksandra Bērziņa-Čerenkova, who heads of the New Silk Road program at the Latvian Institute of International Affairs.
Nevertheless, she said, “under the current situation and the availability of the EU funds it is difficult to see a viable project that could require Chinese loans.”
“We cannot guarantee Chinese companies would win tenders” due to EU rules, she added.
Despite the hurdles, for some leaders in the region, China is still seen in some respects as a friendlier negotiating partner than Brussels.
“It has become increasingly offensive that a few developed countries have been continuously lecturing most of the world on human rights, democracy, development and the market economy,” Orbán said during a television appearance in May. 

“Everyone has had enough of this; and of these the Chinese are the strongest.”

Chinese Dumping

EU e-bike makers make complaint against Chinese imports
Reuters 

A fuel station for e-bikes is pictured in the historic city centre of the western German city of Koblenz, March 1, 2016. 

BRUSSELS -- European producers of electronic bikes (e-bikes) have filed a complaint with the European Commission against cheap Chinese e-bike imports, saying that they are sold in the bloc at excessively low prices with the help of unfair subsidies.
The European Bicycle Manufacturers Association (EBMA) lodged the complaint alleging dumping of e-bikes by Chinese companies which they say are flooding the market at prices below the cost of production.
The Commission has until late October to determine whether to start an investigation.
The EBMA is also preparing a related complaint alleging illegal subsidies and asking for registration of Chinese e-bike imports, which could allow eventual duties to be backdated.
Such an investigation would be the latest in a string of probes into Chinese exports ranging from solar panels to steel and could raise trade tensions with Beijing, particularly with a subsidy inquiry into the support provided by the Chinese state.
Bicycles have already been a flashpoint. 

The EU blamed China last December for scuppering a global environmental trade deal by insisting that bicycles be included as a tariff-free green product. 

Chinese conventional bicycles have been subject to EU anti-dumping duties since 1993.
The EBMA says more than 430,000 Chinese e-bikes were sold in European Union in 2016, a 40 percent increase on the previous year, and forecasts the figure will rise to around 800,000 in 2017.
EBMA secretary-general Moreno Fioravanti said Europeans buy some 20 million bicycles per year, of which about 10 percent are now e-bikes, with the potential to rise to a quarter within five years.
European companies had pioneered the pedal-assist technology that e-bikes use and had invested about 1 billion euros ($1.2 billion) last year, he said, but was risking losing its industry to China.
“Today the European bikes are the best in the world and we have to invest every year to renew the range. The Chinese are getting the money from the government and the subsidies have an impact of 30, 40, even 50 percent of the price of the product,” Fioravanti said.
“You have subsidies, which generate overcapacity, which generate dumping,” he said.

Beijing’s Nobel Shame

Dying dissident Liu Xiaobo must be allowed to travel, UK and EU urge China
By Tom Phillips in Beijing

Britain and the European Union have joined a growing chorus of voices calling for China to completely free its most famous political prisoner, the dying Nobel laureate Liu Xiaobo.
A spokesperson for the British embassy in Beijing said Britain had “repeatedly expressed serious concern at the treatment of Liu Xiaobo by the Chinese authorities”.
“We continue to urge the Chinese authorities to ensure Liu Xiaobo has access to his choice of medical treatment, in a location of his choice, and to lift all restrictions on him and his wife Liu Xia,” the spokesperson added.
A spokesperson for the EU delegation in Beijing said it had discussed the activist’s case with the authorities and asked “that China immediately grant Mr Liu parole on humanitarian grounds and allow him to receive medical assistance at a place of his choosing in China or overseas.”
In an earlier statement the EU had said it also expected China “to remove all limitations on the movements of Mr Liu’s wife and family members”.
A spokesperson for the Chinese foreign ministry, Geng Shuang, rejected the appeals. 

The calls came one day after two foreign doctors who were allowed to visit the dissident in hospital announced they believed he was well enough to be moved overseas, despite Chinese claims to the contrary.
In the light of that announcement, Jared Genser, a US lawyer who represents Liu and is lobbying for his evacuation, called on Xi Jinping to immediately free his client. 

He said Liu had expressed a desire to receive treatment in Germany or the United States, with hospitals in both countries ready and willing to take him in.
“Xi Jinping should honour a dying man’s wishes to be able to leave China and to obtain better treatment that is available abroad,” and could extend Liu’s life by several weeks, Genser said.
“My view is that not only should this happen, but that this must happen and I also believe that there will be enormous pressure placed on Xi from the international community to relent,” he added.
The Chinese artist Ai Weiwei is also among those calling Liu’s release. 

“This is a historic mistake ... this is going to be remembered the whole world,” he said.

In a statement, the executive director of Pen America, Suzanne Nossel, said “the Chinese government’s morality and humanity” would be tested by its decision to allow Liu to leave China or not. 

“There can be no more powerful indicator of Beijing’s respect for human dignity than their treatment of Liu Xiaobo in this time of need.”
Liu, a veteran democracy activist and writer who became a lifelong campaigner after witnessing the 1989 Tiananmen crackdown, was diagnosed with late-stage liver cancer in May while serving an 11-year prison sentence for subversion. 

He is being held, reportedly under police guard, in a hospital in north-east China where authorities insist he is receiving “meticulous treatment”.
Liu was detained in late 2008 for his involvement in a pro-democracy manifesto called Charter 08 and was found guilty of incitement to subvert state power – effectively working to topple China’s one-party state – on Christmas Day the following year.
In 2010 he received the Nobel peace prize for his “unflinching and peaceful advocacy for reform”. 

Unable to attend the award ceremony in Oslo because he was in jail, Liu was represented by an empty chair.

European Union's Yellow Sheep

In Greece, China Finds an Ally Against Human Rights Criticism
By NICK CUMMING-BRUCE and SOMINI SENGUPTA

Uighur men praying at a grave in China’s Xinjiang Province. Greece blocked a European Union statement that would have condemned China’s violations of human rights, including those of Uighurs and Tibetans.

GENEVA — China has long won diplomatic allies in the world’s poor countries by helping them build expensive roads and ports. 

Now, it appears to have similarly won over a needy country in Europe.
At a meeting of the United Nations Human Rights Council this month in Geneva, the European Union sought to draw renewed attention to human rights abuses in China — only to be blocked by one of its member countries, Greece. 

A spokesman for the Greek Foreign Ministry in Athens called it “unproductive criticism.”
It was the first time that the European Union did not make a statement in the Human Rights Council regarding rights violations in specific countries, including China, which has a seat on the council. That silence was an embarrassing reversal for the 28-country bloc, which has prided itself on taking progressive positions on human rights on a council where some nations with poor human rights records habitually resist country-specific resolutions and examinations of their conduct.
Greece is increasingly courting Chinese trade and investment as it faces pressure from international creditors and a cold shoulder from its traditional rich allies in Europe. 

China’s largest shipping company, known as China COSCO Shipping, bought a majority stake last year in the Greek port of Piraeus. 

The Greek prime minister, Alexis Tsipras, has visited China twice in two years. 

And China will be the “country of honor” at Greece’s annual international business fair in September in the port of Thessaloniki.

Greek ports are critical to China’s “One Belt, One Road” initiative, a huge infrastructure project across Asia, Africa and Europe. 

Just last week, at a concert of the Shanghai Chinese Orchestra in Piraeus, the Chinese ambassador to Greece hailed the cooperation between the two countries. 

“Greece and China will remain good friends in good and bad times, good partners for mutual progress,” said the envoy, Zou Xiaoli, according to Xinhua, the Chinese news agency.
China is seeking to expand its diplomatic influence worldwide, projecting itself as the chief proponent of international trade and cooperation as Trump stakes out an increasingly nationalist position for the United States. 

In the past month, the Chinese premier has made high-profile visits to Brussels, the European Union’s headquarters, and Berlin, the German capital.
After Trump pulled out of the Paris climate accord this month, the European Union said it would work with China, the world’s largest polluter, to achieve the accord’s chief target: keeping global warming to “well below” 2 degrees Celsius. 

China could well take advantage of the European Union’s silence in Geneva.
In the last Human Rights Council session in March, the European Union statement pointed to China’s detention of lawyers and human rights defenders. 

The statement also criticized Russia for its crackdown on civil liberties and the Philippines for its targeted drug-related killings.

The trial of Xie Yang, a human rights lawyer, was streamed online last month by the Changsha Intermediate People’s Court.

At the current Human Rights Council session, which ends this week, the European Union made no such statement on China because of Greek objections, European Union diplomats said.
“When the stability of a country is at stake, we need to be more constructive in the way we express our criticism,” a spokesman for the Greek Foreign Ministry said in a telephone interview, “because if the country collapses, there will be no human rights to protect.”
The spokesman, who requested anonymity because of diplomatic protocol in the country, added that was better to raise human rights issues in private meetings between diplomats from Brussels and Beijing.
It was an odd explanation, considering that China’s stability does not appear to be at risk. 

But in the face of the Greek objection, the European Union’s statement died on the vine.
“The global human rights agenda is best served when the E.U. speaks with one voice,” Maja Kocijancic, a spokeswoman for the European Union’s executive body, wrote Monday in an email.
“We will continue our work to bring all 28 together and hope it will, as we normally do, be possible to align positions” for the next session of the Human Rights Council later this year, she added.
Greece’s move to block the statement was first reported in The Guardian.
Human Rights Watch said it was “shameful that Greece sought to hold the E.U. hostage to prevent much-needed attention to China’s human rights crackdown.”
But it also said this was one of three occasions in the past three weeks when the bloc had “demonstrated no intention, compassion or strategic vision to stem the tide of human rights abuses in China.” 

It cited a summit meeting with Li Keqiang at the start of June and the anniversary of the Tiananmen Square crackdown as other recent occasions on which Europe had failed to forcefully condemn human rights abuses in China.
Diplomats in Geneva noted that Greece was not alone in arguing against the European Union’s statement to the council. 

Lengthy discussions in Brussels on the text of the statement failed to overcome Hungary’s objection to mentioning human rights concerns in Egypt.
After a tense emergency meeting of European ambassadors in Geneva just two hours before the Human Rights Council debate, Hungary relented and withdrew its objection, leaving Greece as the sole obstacle to consensus.

Germany wants more guarantees from China over 'Silk Road' trade plan

Germany has warned that EU countries are not yet prepared to sign a joint statement on China's "Silk Road" trade initiative. Economy Minister Brigitte Zypries has called for more free trade guarantees from Beijing.
DW

German Economy Minister Brigitte Zypries on Sunday warned that Germany and other EU countries would not sign a joint trade statement at China's Belt and Road Forum unless they received more guarantees from Beijing on free trade, environmental protection and working conditions.
"So far, the demands of the EU countries in areas such as free trade, setting a level playing field and equal conditions have not been met," she said in a press briefing on the sidelines of the summit in Beijing. 

"If these demands are not met, then we cannot sign. We'll see what happens tomorrow."
A communique is expected to be published on Monday at the end of the forum, at which China is seeking support for a new "Silk Road": a trade and infrastructure project linking China with countries in Central and Southeast Asia, Europe, the Middle East and Africa.
Officials from more than 100 countries are attending the two-day forum to promote the initiative. Those present include Xi Jinping, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan and UN Secretary General Antonio Guterres.Zypries: "There is still a problem between our states"

European misgivings
However, western European countries have tended to send ministers or lower-ranking officials to the forum in a sign of their unease about the plan, which some see as an attempt to promote Chinese global influence. 

Western diplomats also have reservations about the initiative's lack of transparency and formal structure.
Zypries on Sunday called for more transparency in tenders for projects related to the initiative, and insisted that it should conform to international trade standards.
"Germany does want to take part, but tenders need to be open to everyone; only then will German companies take part," she said. 

"It must also be clear what is actually going to be built. At this point, it's not clear."
A draft of the communique that is meant to be issued on Monday says the initiative intends to uphold "the rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system with the WTO (World Trade Organization) at its core."
India has boycotted the forum to indicate its displeasure that part of a planned China-Pakistan corridor will run through the disputed Kashmir region.

EU sets collision course with China over ‘Silk Road’ rail project

Probe of Beijing-funded Belgrade-Budapest link hits Xi’s hallmark scheme 
By James Kynge in London, Arthur Beesley in Brussels and Andrew Byrne in Budapest

Serbian prime minister Aleksandar Vucic, left, and China's National Development and Reform Commission deputy head Wang Xiaotao launch the Belgrade-Budapest railway project in Novi Sad, Serbia, in 2015

Brussels is investigating a showcase Chinese rail project that aims to extend Beijing’s “One Belt, One Road” initiative into the heart of Europe, potentially putting the European Commission at loggerheads with China.
The commission’s probe is into a planned 350km high-speed railway between Serbia’s capital, Belgrade, and Budapest in Hungary.
The railway is billed as a hallmark scheme under “One Belt One Road”, a $900bn project championed by Xi Jinping, to build infrastructure and win diplomatic friends in Europe, Asia and Africa.
European officials told the Financial Times that the investigation was assessing the financial viability of the $2.89bn railway and looking into whether it had violated European Union laws stipulating that public tenders must be offered for large transport projects. 
“The commission services are assessing the compliance of the project with EU law. The dialogue with the national authorities is ongoing,” said a European Commission spokeswoman.
Any legal setback to China’s first railway project in Europe would be a diplomatic embarrassment for Beijing, which made the railway its cornerstone offering to win support from central and eastern European nations during a summit attended by the countries in 2013. 
At issue for the commission are separate agreements signed by the Hungarian and Serbian authorities. 
But the main focus is on Hungary, an EU member state that is subject to the full rigour of European procurement law. 
As a prospective member of the bloc, Serbia is subject to looser rules.
Failure to comply with EU tender laws may be punished by fines and proceedings to reverse infringements. 
“If push comes to shove and if it turns out that the Hungarians have awarded a public works contract of a particular dimension without tender they will of course have infringed EU legislation,” said a senior EU official.
No contract for the $1.8bn Hungarian section of the railway appears to have been made public. However, a treaty between Hungary and China, dated last year and seen by the FT last week, stipulates that companies designated by each government should “co-operate for the development” of the project.
It adds that two state-owned Chinese companies — the China Railway International Corporation and the Export-Import Bank of China — should act as contractor and financier for the project, which is due to be implemented by the Hungarian State Railways company. 
On Friday, the Hungarian government did not deny the commission’s probe but said it had signed the agreements with China, including an annex explaining how it had complied with EU procurement law, following consultations with Brussels.
Official Chinese media reports have said “a contract” for the high-speed railway between Belgrade and Budapest was signed during a meeting of the “16+1” — which unites China with central and eastern European countries — in Latvia in November.

Disruption to the rail project could sap the impetus behind the “One Belt, One Road” initiative, which Xi hopes will bind China, Europe, the Middle East and Africa more closely by building roads, railways, ports and other links to recreate the spirit of connectivity that prevailed along the ancient Silk Road.
“This railway is a big part of the ‘One Belt, One Road’ project,” said Tamas Matura, assistant professor at Corvinus University in Budapest.
“The Hungarian section is supposed to serve as a masterpiece to show that the Chinese can build according to EU standards,” he added.
The planned railway, which is supposed to cut journey times from Belgrade to Budapest down to about three hours from the current eight, is also important to China in a practical sense.
It comprises a crucial section of a so-called “Land Sea Express Route”, which China agreed in 2014 to build with Hungary, Serbia and Macedonia.
This route is aimed to link up with Piraeus, a Chinese-owned Greek port on the Mediterranean.
Without the Serbian-Hungarian rail link, China could struggle to realise its aim of being able to export products by rail to Piraeus and thereafter by sea to destinations in Europe, Africa and beyond, analysts said.
The Brussels probe into Hungary’s tender procedures is not unprecedented.
Viktor Orban, the prime minister, attracted EU scrutiny in 2014 for awarding contracts to build a €12.5bn Moscow-funded nuclear project to Russian state-owned energy company Rosatom, also without holding a public tender. 
The commission launched infringement proceedings against Budapest on suspicions that the project breached internal market rules.
But it closed the probe last December, accepting Hungary’s arguments that only the Russian operator could provide the specific technologies required.
The project is still subject to a separate state aid investigation.

“Don't listen to what Xi Jinping says, but look at what he does

The EU Calls on Xi Jinping to Put His Words into Action
Reuters

The European Union urged China on Wednesday to make "concrete progress" in opening its markets to global investment, after Xi Jinping decried protectionism in a speech at the recent World Economic Forum in Davos, Switzerland.

"A speech is a speech and actions are actions," said Hans Dietmar Schweisgut, EU Ambassador to China, adding that he would be "surprised" if Xi was able to translate words into action.
At Davos last week, Xi called for "inclusive globalization" and for global unity, saying "self-isolation will benefit no-one," two days before the inauguration of U.S. President Donald Trump.
During that week, China's cabinet issued measures to further open the economy to foreign investment, including easing limits on investment in banks and other financial institutions.
No further details were provided, nor a timetable for their implementation.
So far, the EU has not seen "sufficient signs that China will be willing to grant reciprocity of market access to European companies," Schweisgut told reporters in Beijing.
In June 2016, the European Chamber of Commerce in China warned that foreign companies face an increasingly hostile environment in China, with fewer than half its members saying they planned to expand operations in the world's second-largest economy.
Billionaire investor Wilbur Ross, Trump's choice for commerce secretary, has called China the "most protectionist" country in the world, and said China's officials "talk much more about free trade than they actually practice."
Trump has previously criticized China's trade practices and threatened to impose punitive tariffs on Chinese imports.
China has said it is confident it can resolve trade disputes with the new U.S. government, though some state media and government advisors have warned that U.S. aircraft manufacturers, automobile companies and agricultural products could be caught in the cross-fire of increased trade tensions.
When asked whether Europe saw any opportunities in China's warnings of punitive measures against the U.S., Schweisgut said this was "interesting speculation" but that he did not know enough about Trump's trade policy plans to comment.