Albania’s Chinese Connection
By Janusz Bugajski
China is poised to re-enter Albania, only this time not through a communist ideological alliance as in the 1960s but with economic investments and financial promises. As China expands its European presence, Tirana needs to be mindful that its former “big brother” intends to use Albania to benefit its own strategic and financial interests without significantly contributing to the country’s development.
China’s state energy company Sinopec in now participating in the tender to purchase Albpetrol and China’s Ambassador in Tirana is lobbying hard on its behalf. This latest bid is part of a longer-term strategy by Beijing to expand bilateral economic ties, create a free trade zone for Chinese investments, and promote further acquisition of Albania’s energy resources.
With estimated foreign currency reserves of $3.2 trillion, a Chinese connection may appear attractive for Tirana. But officials and analysts need to look more closely at Beijing’s broader ambitions and where Albania fits in its European investment strategy. Only then can the costs and benefits of Chinese ownership of Albania’s strategic assets be properly measured.
China has a state capitalist system in which major strategic industries are owned and managed by government appointed officials to promote Beijing’s foreign and commercial policies. Unlike Russia, China does not have overblown imperial aspirations in any part of Europe. Instead, its policies hinge around three core components: state profit, market access, and technological acquisition.
China’s long-term goal is to become an economic superpower that eventually surpasses the United States. It remains the world’s fastest growing economy and the second largest by nominal GDP. It has taken advantage of the global recession to lend massive amounts of money to countries such as the U.S. and is reaping large dividends. By lending and investing overseas it seeks to expand its financial power and tie targeted countries into its export-oriented development strategy.
In the past decade, China has transformed itself into the largest trading nation by the sheer volume of its exports. However, its partners complain that Beijing does not provide equal market access for foreign products. For instance, although trade between China and Central-Eastern Europe has grown by 32 percent annually over the past decade, Chinese imports to the region sharply outweigh its exports to China.
Beijing also obstructs foreign investors. While the EU has welcomed the billions of dollars of Chinese investment, European businesses have been restricted. Public procurements in China are largely inaccessible to foreigners and no outside entity can purchase China’s strategic assets. In fact, the European Commission has drafted regulations allowing retaliatory closures of the EU public procurement market as protection against Beijing’s predatory investment approach.
China is attracted to Central and South East Europe for its cheap but relatively skilled workforce and as a gateway to Europe’s single market and advanced technology. Additionally, the Chinese government has increasingly focused on acquisitions in Europe’s energy sector, driven by its insatiable thirst for energy as a driver of China’s economic growth. Globally, Beijing seeks supplies for its expanding economy rather than developing the energy and economic infrastructure of host countries.
Sinopec’s attempt to purchase Albpetrol will reportedly be backed by two new state funds. Chinese Premier Wen Jiabo announced that Beijing would establish a $10 billion credit line and a $500 million investment fund to support Chinese companies making first-stage investments. However, this does not guarantee that Sinopec will actually invest substantial funds. Companies seeking to tap into this credit line will need to apply to China’s non-transparent state owned banks and the government will make the final decision on investment strategy.
The combination of extractive profits, unbalanced trade, and rapacious energy exploitation should raise red flags in Albania, but not of the communist variety. Chinese investments bring additional problems for host countries. For instance, Chinese corporations insist on importing large numbers of their own workers to execute projects, thus denying local communities jobs and economic development. Beijing also signs contracts stipulating that equipment and materials necessary for projects come from China, thus bringing little stimulus to the local economy.
The recent failure to build a major highway in Poland between the two cities of Warsaw and Lodz, touted as China’s highest profile project in Central Europe, demonstrated that Chinese demands often conflict with national economic interests. Albania should draw lessons from the experience of other European states and carefully consider the costs of acquiescing to China’s commercial strategy and particularly in allowing Beijing to acquire a strategic national asset such as Albpetrol.
Fear of China is unfounded
By Arben Manaj
London
I got intrigued for the following by an article written by the respectable American pundit Janusz Bugajski about the possible entry of the Chinese business in Albania. That’s in relation to the tender about “Albpetrol”.
Mr. Bugajski’s concern had to do with the fact the so-called former “Big Brother” could use Albania for its own strategic and financial interests without contributing in a meaningful way to the development of the country.
As a parenthesis, I have been only for eleven days to China, during a duty trip with a group of BBC Broadcast Journalists, when I used to work for that media outlet, to report on the preparations for the Beijing Olympic Games.
I maintain that Mr. Bugajski’s macro approach to the “Chinese Danger to Albania” is unfounded.
Long time ago, Albania has abandoned its delirious altitude of being the “shining Beacon in the Adriatic coast “and as Mr. Bugajski admits, China is not trying to re-access via the same ideological communist alliance as it did in the 1960.
Undoubtedly, China has its own interests, not only in Albania, but in Europe and elsewhere and this is quite normal, as it is so, for every nation, including USA, UK and so on.
But Albania should look after its own interests as well.
Albania’s paramount interest, at a time of a great economic crisis, should lie at increasing the foreign investments as much as possible and as diverse as they can be. After the fall of communism, all Albanian administrations rightly so, including the current one, have placed the right importance to the relations with China and good for them.
Even Beijing has no illusions that Albania will never ever return at this day and age to the twenty year old-long ideological alliance of the 1960-80 of the last century.
The Chinese know as well as we do, that Albanians did not “glue” with them, either due to cultural differences, or other factors.
The Chinese know as well as the Westerners do, that Albanians will be the most pro-American nation that you could ever find, maybe in the entire Eastern Europe, let alone in the Balkans.
Albania should be pragmatic and visionary in its relations with China, to absorb as much interest and investments as it possible could from a super-State, which effectively is and will very soon be, even formally, the engine of the world economy.
This is of great interest for Albania. The same holds true even for other nations, which develop economic and trade links and do business with China.
No one in London, the birthplace of new-born capitalism, cares for the aims of the Chinese state, which intends to invest billions of Pounds, as it’s been widely reported recently in the British press, to build five new nuclear plants up and down the country by Chinese companies.
The British are very well aware of the fact that the Chinese want to have it written down in their own hi-tech CV, that they have invested in a country like UK, in the nuclear sector with very strict rules of engagement, so they can move on into other parts of the globe.
And this mere fact, for the British, renowned worldwide for their extraordinary sense of business intuition, doesn’t stop or prevent the Chinese , because the bottom line for them is that the one which is going to profit out if this, will be the British economy. As simple as that.
When such big players are so practical in their approach and rightly so, why then such little ones, like Albania, should copy the role of the famous Chinese figure, called Lejfen, who was shooting the enemy from the top of the bunker, and got shot down by a bullet in his forehead, whilst the others were fighting and pulling their triggers from inside it ?!
Even the Russians have expressed their own interest in buying the “Albpetrol” company of Albania. But at the end of the day, better the Chinese than the Russians, for all those reasons and sensitivities, that we all know and do understand.
Albania, I strongly believe, should make use of another element in its relations with China.
When I was in China, to my utter surprise I noticed that the generation of the forties and over, knew so much about us, the “Arbanians” as they called us. They know so much about Albanian movies, like “I teti n롢ronz” and even sung to me the famous Albanian song, “Ore, ore lule bore”.
And that was due to the distant past, when China showed week in week out in its national TV the Albanian movies of the “New Albania” Film Studio. In this group, still nostalgic for Albania were the old and very powerful rulers of modern China.
In the meantime, the under forties had no clue at all where Albania was situated. I am not talking only the ordinary Chinese citizens, but that strata of Chinese technocrats, bureaucrats and administrators, present everywhere at all levels of the present day Chinese government, all graduated in the West, be it Oxford, Cambridge or the prestigious American universities.
Towards them, Albania should be very careful and attentive as much as it can, in a long term and perspective way.
But strategically too, Albania is the one which is better off by any state or private Chinese capital investments in the country, because as a matter of fact, the chances of Albanian businesses succeeding in China are minimal, apart from trade and business contacts already in place and up and strengthening in terms of bringing Chinese goods in Albania.
With its “open doors” policy of Deng Xiaoping, China wittingly and with a precise and adorable long term vision managed to attract huge Western capital investments in China and after that, through them exerts due pressure and influences to respective western governments to its ends .
It does that either directly, as in the case of the pollution by foreign companies in China and the risk of selective fines, if necessary, or through the influences by foreign businessmen in their own national governments, as it is the case of the apparent western silence when it comes to the Chinese human rights record.
The economic interests forces so many Western capitals to be seen as talking, given that bigger vested interests are in jeopardy, and without the slights doubt they are economic ones, above all.
But in this world, what goes around comes around. Even very minimal as an opportunity as it is and compare wise in different formats, every national government tries and would do it’s best to politically influence Beijing, in whichever part of the world, where China intends to be a very big political or economic player.
Either through a subtle, meant way or a positive relationship greatly affects official policies and eventually it does help in changing classic diplomatic stands on specific issues in bilateral or multilateral relations.
In modern politics and diplomacy, this is usually done as a goodwill gesture or as an expression of gratitude, because at the end of the day all boils down to mere calculationsō
Albania has nothing to lose from China, an economic and political world superpower in this century, which is being called China’s century. On the contrary.
From these links, even the western friends of capitalist Albania shouldn’t worry, because the Albanian orientation and political vocation towards western democratic values are well defined and there is no turning back.
Moreover, the Chinese centaur with a communist head and a capitalist body has no illusions about that.
