China announces €10 billion Investment Fund for CEEC

China is keen on investing in Central and Eastern Europe and this intent is best exemplified by the China-CEEC cooperation programme known as '16+1' formula.

China has set up a 10 billion euro investment fund to finance projects in infrastructure, high-tech manufacturing and consumer goods sectors in Central and Eastern Europe. The fund will be run by Sino-CEE Financial Holdings Ltd, established by the Industrial and Commercial Bank of China earlier this year. The formal launch of the company was made by the Chinese Prim-Minister Li Keqiang during the China-CEEC 16+1 Summit held in Riga on 5 and 6 November. 

The cooperation started in 2012, when China approached the countries of Central-Eastern Europe (CEE) with a proposal concerning regional cooperation in the ‘16+1’ formula.  This decision was based on the growing importance of the region within the European Union and the group of 16 states include Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Albania and Macedonia.

In 2012 the first meeting at the level of heads of government was held in Warsaw, marking the official launch of the 16+1 formula. Subsequent rounds of talks between prime ministers were held in Bucharest (2013) and Belgrade (2014). Top-level meetings were complemented by a series of multilateral events, attended by representatives of the CEE states and China.

The institutionalisation of the format resulted in the establishment of a Permanent Secretariat at the Chinese Foreign Ministry (2012), a Permanent Secretariat for Investment Promotion in Warsaw (2014), and several associations and industry organisations coordinated by individual states (e.g. agricultural cooperation is coordinated by Bulgaria, railway transport by Serbia).

More recently, a CEEC-China Secretariat on Logistics Cooperation was set up in Riga, Latvia, within the Ministry of Transport. The 2016 Summit of 16+1 was held on 5 and 6 November in Riga, as well as a Business Forum covering the topics of  transport and logistics. Within the framework of events organised this week under the CEEC-China Cooperation Format (16+1), on 5 November the Latvian national railway company SJSC “Latvijas dzelzceļš” organised the welcoming ceremony of the first pilot container train from China (route Yiwu-Riga) at Riga Central Station. 

Among the main projects under this cooperation, the “Belt and Road (BRI)” initiative is aimed at building a trade and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes, of which the CEE countries are an essential part as a quarter of the countries along the routes are located in the region.

In 2015, China and the CEE countries scored an overall trade volume of $56.2 billion despite the sluggish global economic growth. Chinese companies have invested roughly $5 billion in the CEE countries, which have also made investments worth an estimated total of 1.2 billion dollars in China.

Hungary was the first European country to sign a memorandum of understanding (MoU) on BRI co-operation with the Chinese mainland and has also signed deals to build a high-speed rail line between Budapest and Belgrade. With the line expected to be completed in 2017, the 85% Chinese-financed project will shorten the travel time between the two capitals from eight hours to three.

In 2013 a high-speed railway started operating from Chengdu, the provincial capital of Sichuan province, in Southwest China, to Łódź, in Poland. So far, railway lines for container trains have opened up in 16 Chinese mainland cities, heading to 12 European cities including many CEECs such as Łódź in Poland, Pardubice in the Czech Republic and Košice in Slovakia.

Read about China's Twelve Measures For Promoting Firendly Cooperation with Central and Eastern European Countries here