In the coming years, China will pose the greatest geopolitical challenge to the EU in its near abroad, specifically the Western Balkans, the MENA region, and the newly emerging geopolitical playing field of the Arctic. However, the EU would be ill-advised to only consider geopolitical competition with China in its neighborhood, as Chinese activities are also putting in question freedom of navigation in the Indo-Pacific.
Issue 1 – Western Balkans and the MENA region: A new player
Recent years have seen a considerable uptick in China’s deployment of investments and lending – often channeled through BRI infrastructure projects – to expand its footprint in the Western Balkans.6 China has a vested interest in improving and promoting infrastructure in this underdeveloped region, as the road into the big markets of Western Europe from the Chinese-owned port of Piraeus runs through the Balkans.
China’s perceived “no strings attached” approach to investment, along with parts of its authoritarian governance model, have proven appealing to some countries in the region, like Serbia, while the considerable size of some Chinese loans is threatening to drive others, like Montenegro,7 into a relation of debt dependency with China. This could make these countries more vulnerable to Beijing’s political influence. Moreover, Chinese investments in the EU’s near abroad often do not live up to the norms and standards promoted by the EU and sometimes even help perpetuate corruption in the region. The Budapest-Belgrade railway project is a case in point, with the EU having opened an investigation into the Hungarian government in 2016 for initially not following EU procurement rules.8
Beijing has traditionally had little involvement in the MENA region, but that is changing rapidly. China needs a stable MENA region if it wants to achieve its goals of expanding the BRI and its access to the region’s resources, protecting Chinese citizens and assets, and dealing with terrorist threats originating in the region. The Chinese leadership is also using this growing presence to present itself as an alternative partner for MENA countries, one that is an honest broker with no hidden agenda for the region, unlike Europe or the US.
Over the last few years, Beijing has increased its defense diplomacy efforts in the region, with high-level defense officials from MENA countries visiting Beijing regularly to discuss security cooperation with China. The PLA Navy (PLAN) has visited the region on multiple occasions, both for friendly port calls and to hold joint drills and exercises with local militaries. The Chinese military also maintains a permanent presence in and close to the region, with Chinese peacekeepers deployed in Lebanon, the PLAN patrolling the waters of the Gulf of Aden, and the opening of China’s first overseas military base in Djibouti.
Furthermore, China is becoming a major source of weapons and military technology to the region, often providing the weapons that Western countries refuse to sell, such as armed UAVs.9 In the past, Beijing has also offered to mediate in some of the region’s longest-running and most intractable conflicts, from Syria and Afghanistan to the Israel-Palestine and Saudi Arabia-Iran conflicts.
Issue 2 – China’s neighborhood: Europe can no longer look the other way
Further afield from Europe, the Indo-Pacific has become a major arena of geopolitical competition between China and the United States. While Europe has mostly taken a backseat with regard to developments in the region, this will not be a sustainable course of action going forward. Recent years have seen an increasingly aggressive Beijing organize growing numbers of military drills and maneuvers in the Indo-Pacific, meant both as a show of force and an implied threat to neighbors. Taiwan is a case in point. Beijing has long maintained that it would prefer to reunify with Taiwan through peaceful means, although it has never ruled out the use of force. While in the past threats from Beijing to use force against Taiwan lacked credibility because of US support for Taipei and the limited capabilities of the PLA, today China’s rapid military modernization has created a new strategic calculus. According to MERICS data, PLA aircraft conducted flyovers and drills around Taiwan at least 15 times between January and August 2020.10 And it is not only the PLA Air Force (PLAAF) that has stepped up its presence near Taiwan. The PLAN also regularly conducts drills in waters near Taiwan, and China’s newest aircraft carrier, the Shandong, sailed through the sensitive Taiwan Strait in late December 2019.11