The politics of Chinese investments in Europe: The end of the Liberal International Economic Order?

About the project

This collaborative project convenes a network of established and early career scholars to examine the implications of Chinese investments in Europe on the Liberal International Order. We challenge the binaries proposed by prevalent ‘realist’ and ‘liberal’ narratives in International Relations and International Political Economy. We also interrogate ‘postcolonial’ readings, which emphasise the persistence of colonial relations of power and radicalised hierarchies in international relations and global development politics. By drawing attention to the dynamics underpinning growing Chinese investments in Europe, the project contributes to understanding a crucial intellectual challenge of our time: the growing presence of a "developing" country in the economies, societies and polities of the "developed" world. By emphasising the political and ideational implications of Chinese investments in Europe, this project offers us empirical material to analyse the growing importance of actors in the Global South vis-à-vis those in the Global North, thereby interrogating the hierarchies that have been assumed by realist, liberal and postcolonial theorists alike.

The project builds on two workshops we've had with established and emerging scholars who research the political dynamics and impacts of Chinese investments (financial, infrastructural and social) in Europe, reflecting on the implications for liberalism, democracy and capitalism in Europe and beyond. 

We are currently assembling a volume where we collectively reflect on the implications of China’s European investments on the Liberal International Order.

Meet the team

Principal Investigator

Indrajit Roy, University of York

Co-investigators

Catherine Jones, Lecturer, School of International Relations, University of St Andrews

Dimitrios Stroikos, Associate Lecturer, Department of Politics and International Relations, University of York

Filippo Boni, Lecturer in Politics and International Studies, Open University

Jan Knoerich, Senior Lecturer in the Economy of China, King’s College London- Lau China Institute

Jappe Eckhardt, Senior Lecturer, Department of Politics and International Relations, University of York

Małgorzata Jakimów, Asst Professor in East Asian Politics, University of Durham

Nicholas Crawford, International Institute for Strategic Studies

Ran Hu, Doctoral student, University of York

Simona Davidescu, Lecturer in Public Policy, Department of Politics and International Relations, University of York

Yu Jie, Senior Research Fellow, Chatham House

Agnes Szunomar, Corvinus University of Budapest

Project Outputs

We are assembling an edited volume for Oxford University Press to collectively reflect on the political dynamics of China’s investments in Europe and their implications for the Liberal International Order.

Introduction: Chinese investments in Europe and the Liberal International Economic Order

Indrajit Roy and Ran Hu, Department of Politics and International Relations, University of York

The introduction will present the research agenda and intellectual debates around the rise of China and its impact on liberal internationalism within which the volume is inserted. It will engage critically with the state-of-the art and specify the ways in which the contributions to this volume advance the field with a focus on Chinese investments in Europe.

 China and the Liberal World Order: the Case of Belt and Road Initiative

Ran Hu, Doctoral student, University of York

As China’s presence continues to grow across the world, the concerns with its global presence also increase. The chapter analyses China’s most ambitious plan, the Belt and Road Initiative (BRI), and its implications on the liberal world order. Departing from the standard assumption that BRI is a coherent and well-thought-out strategy, this chapter investigates its internal politics and presents a full picture of its origins and development through process tracing. This chapter finds out that at the beginning, BRI was incoherent and fragmented, and that as it is enacted, BRI is still a loose initiative which in fact bears the resemblance of the liberal world order. The chapter concludes by arguing that BRI could be accommodated within the liberal world order on the condition that traditional liberal democracies actively participate in it.

 China Inc.: The source of destabilizing Liberal International Order or projecting China’s discursive power?

Yu Jie, Senior Research Fellow, Chatham House

This chapter seeks to discuss a key research question: to what extent Chinese companies, either State owned enterprises or private companies have become a formidable player in challenging the so-called liberal international order. In particular, it aims to explore the evolving relationships between the Chinese companies and the Chinese central government when Beijing pursues its flagship Belt and Road Initiative. It intends to analyse whether Chinese companies have become a source of destabilizing the existing liberal international order through challenging the practice of Washington-consensus led international institutions. The idea of China projecting its discursive power has become pertinent since President Xi came to power. In recent year, the Chinese central government and the ruling Communist Party is keen to cultivate Chinese companies as key players to implement its foreign policy initiative. The conventional wisdom from Europe is that those Chinese companies are acting on behalf of the state. Yet, this conventional wisdom needs to be challenged by examining what the Chinese companies have done in the process of pursing the BRI in Europe. This chapter departs from the most existing literature on BRI in Europe, which focus upon the geo-economic and geo-political impacts of the BRI. Instead, it adopts an “inside-out” approach by examining the actual policy process with a primary focus to individual actors such as the Party, the government department and the Chinese companies. It also disentangles the intricate relations amongst the Party, the key decision-making institutions and the policy execution entities in determining the final outcome of the BRI.

Geopolitics versus Geoeconomics? China-Greece Relations and the Evolving Regional Order 

Dimitrios Stroikos, Lecturer in Politics, University of York

One of the most important global effects of China’s economic development has been its increasing ‘geoeconomic’ influence on Europe. As a result, in recent years much attention has been given to China’s growing profile in the region and its potential consequences for EU-China relations. Less scholarly attention, however, has been given to China’s engagement with small countries in Southeast Europe. In this context, Greece offers a particularly useful illustration of how China is assuming more economic importance in the region through the Belt and Road Initiative (BRI). Focusing on China-Greece relations, this chapter aims to provide a comprehensive overview of the economic, political, and strategic factors that shape this burgeoning bilateral relationship. In doing so, it examines whether and how China’s economic power is translating into actual influence over Greece. Consequently, it also considers the wider geoeconomic and geopolitical implications of Beijing’s significance as an actor in Europe and its potential role in reshaping regional order. 

Strategic shift or business as usual? An assessment of Sino-Italian relations under the BRI

Filippo Boni, Lecturer in Politics and International Studies, Open University

Italy’s decision to become the first G7 country to sign a MoU with China on the Belt and Road Initiative (BRI), has reignited debates about China’s growing clout in Europe, and the political implications deriving from it. Most of the policy, academic and media debates around this issue have been polarised around two main camps: the over-enthusiasts, aligning with Beijing, and the Sino-phobics, casting a negative light over Chinese economic and political activities in Europe. Moving beyond sweeping generalisations, this chapter aims to provide a more nuanced and fine-grained assessment of China’s engagement in Southern Europe, by assessing whether China’s economic activities in Italy have translated into political influence within the country. The analysis shows that while claims that Italy has shifted its strategic posture as a result of its engagement with China are overblown, China’s influence in the country, among the elites and the public, is growing. The chapter also demonstrates how Chinese views on key international issues are starting to gain traction among politicians and the public alike. Conceptually grounded within the framework of strategic narratives, the empirical parts of the chapter focus on two key issue-areas: elite interactions and media engagements. The chapter concludes with an assessment of the wider implications of recent developments in Sino-Italian relations for the transatlantic partnership, and the Liberal International Order. In particular, the analysis shows how the upward trajectory in Rome’s relations with Beijing, was simultaneously matched by a growing scepticism towards the EU and the US.

China’s strategy in the Western Balkans and its implications for the liberal international order

Nicholas Crawford, International Institute for Strategic Studies

Scholars have put forward three main theories to explain the motivation for China’s Belt and Road Initiative (BRI). The first promotes the idea that BRI is a geopolitical endeavour whereby China seeks economic influence over other states for geopolitical ends. The second holds that BRI is motivated by China’s economic national interest, involving the aggressive expansion of Chinese businesses overseas and the transfer of wealth back to China – what Jonathan Holslag (2017) has labelled ‘offensive mercantilism’. The third theory holds that BRI is about supporting the economic development of partner countries and about building close and friendly relations, in line with Chinese Communist Party rhetoric about ‘win-win cooperation’ and building ‘a community of shared future for mankind’. Of course, it may be that some combination of these theories best describes China’s strategy. This chapter considers which theory best fits China’s lending activities in the Western Balkans, based on evidence from Bosnia and Herzegovina, Serbia and North Macedonia. Using process tracing, it explores whether China has used its lending in the region for political influence, whether China’s lending strategies demonstrates the prioritisation of Chinese economic gains, or whether China’s lending reflects the spirit of friendship between countries which its government espouses. The chapter finds that China’s activities in the Western Balkans are primarily motivated by China’s economic national interest. It goes on to consider the implications of this for the Western Balkans’ alignment with the European Union and its wider embrace of the liberal international order. 

China’s unintended normative impact or strategic convergence? Political consequences of Chinese investments in the Vysegrad Group.

Małgorzata Jakimów, Asst Professor in East Asian Politics, University of Durham 

The Vysegrad Group including Poland, Chechia, Slovakia and Hungary constitute the core countries within 17+1 platform created by China to facilitate its Belt and Road investments in Central-Eastern Europe (CEE). Since 2013, these formerly staunchly anti-communist governments have slowly diverted towards China-friendly, and even China-admiring ideological rhetoric. This rhetoric often parts with the liberal post-communist choices of defending human rights discourse or supporting anti-communist movements, and instead portrays China as a new norm-setting alternative to the Brussel’s consensus for Central-Eastern Europe. What does this rhetoric signify? Is this new approach an evidence of China’s normative impact, as argued by some, or rather a sign of strategic convergence towards illiberal values in the region that is happening independently of China’s engagement? Or is it just a result of pragmatic power play dictated by parochial national interests? This paper argues that to an extent it is all of these things, but ultimately the shift signifies a deeper normative and political process of regional restructuring taking place within the European Union. This restructuring entails competitive ideological region-making, in which China’s role is often ambiguous. The paper concludes, that while this ambiguity results in the deepening of the ideological fragmentation within the EU, it also contributes to the Vysegrad countries’ insecurity over Chinese intentions (as signified in the Huawei case) and as such undermines China’s ability to exert unfettered political and normative influence in the region.

Does foreign direct investment by Chinese multinational enterprises threaten the liberal international order?

Jan Knoerich, Senior Lecturer in the Economy of China, King’s College London- Lau China Institute

 Growing apprehensions about China’s increasing economic strength, global power and influence beyond its borders, coupled with reservations about its state capitalist economic system and authoritarian politics, have led to a rise in claims that Chinese investments are posing a threat to the liberal international order. Yet, there is a shortage of reliable scientifically informed evidence on such threats. This chapter considers whether and how a particular form of investment – foreign direct investment (FDI) – can pose a genuine challenge to the liberal international order. It examines the definitions of FDI and liberal international order, respectively, and considers the plausibility of Chinese multinationals threatening this order through their expanding presence in Europe. It concludes that the challenges from FDI are limited, but that other types of investments as well as economic and political activities emanating from China may well pose more substantial threats to Europe and the international order.

China as a Catalyst for Stasis?

Catherine Jones, Lecturer, School of International Relations, University of St Andrews

The development and creation of a range of development and investment frameworks emanating from China form a central plank in arguments that we can now see to shape of a ‘Chinese-led’ World Order. The launch of the Asian Investment Infrastructure Bank (AIIB), the New Development Bank (NDB) and the Belt and Road Initiative (BRI), have been seized on by scholars as evidence of new institutions in this emerging order which has the potential to act as a rival or challenger to the North American and European normative frameworks and regimes. However, this paper argues that instead China acts as a catalyst for the maintenance of a status quo. By presenting an alternative source of financing to the developing world, China neither offers a new approach nor does it fill in the gap in existing development programs. Instead, China’s largest contribution (to change) is in triggering other donors (mostly from the OECD-DAC) to make sure their aid and assistance is more targeted and effective by implementing changes identified as necessary for the previous two decades.