Li backs financing support for cooperation with CEEC

AFP

Chinese Premier Li Keqiang yesterday announced financing support for cooperation between China and the 16 central and eastern European countries (CEEC), also known as 16+1 cooperation.

Li announced the establishment of a China-CEEC Inter-Bank Association and the second phase of China-Central and Eastern Europe Investment Cooperation Fund in a keynote speech to the seventh China-CEEC Economic and Trade Forum held in the Hungarian capital of Budapest.

China Development Bank will provide an equivalent amount of 2 billion euros (US$2.4 billion) as development-oriented financial cooperation loans for the inter-bank association, Li said.

Meanwhile, he said the second phase of the investment cooperation fund that totaled US$1 billion will be mainly invested in central and eastern Europe.

The two sides need to further expand financing channels, the Chinese premier said.

China supports commercial and development financial institutions to provide finance for bilateral cooperation projects, supports companies from central and eastern European countries to issue Panda Bonds in China, and also supports the two sides to conduct yuan-denominated financing business for cooperation projects.

He outlined his hope that closer cooperation with central and eastern Europe will help foster prosperity in the region.

At the summit, Li said efforts such as China’s “new Silk Road” initiative to expand trade across Asia, Africa and Europe should be a boon to countries in the region.

“Our aim is to see a prospering Europe,” he said, adding that closer ties with the 16 countries, which include 11 European Union members, will “usefully complement” EU-China relations.

China’s rapid economic growth has seen the country increase its spending on the global stage, and the new “Silk Road” prospect is a key trade effort.

Hungarian Prime Minister Viktor Orban told the summit the region is in need of external technological and financial resources, including from China, to grow.

“European resources are in themselves insufficient,” Orban said. “For this reason we welcome the fact that as part of the new economic world order, China sees this region as one in whose progress and development it wants to be present.”

Orban mentioned the reconstruction of a railway line between Budapest and Belgrade, capital of Serbia, a project financed mainly by China, as a “flagship project” of China’s increased presence in the region.

Orban said the upgraded railway line could become the fastest transport route to western Europe on China’s new Silk Road.

Li laid out his hope that the countries of Eastern Europe will account for more of China’s imports, which should total some US$8 trillion over the next five years.

“We hope the central and eastern European countries find their place in this volume and expand their presence in the huge Chinese market,” Li told an economic forum being held during the summit.

Orban said Europe needed “strong allies” to confront the “historical challenges” it is faced with. 

“If Europe shuts itself in, it loses the possibility of growth,” he said. “We 16 have always been open and would always like to remain so. We always saw cooperation with China as a great opportunity.”

Orban has been keen to pursue a policy of “Eastern Opening” for Hungary, looking to increase trade with Asia while portraying western Europe as economically challenged and losing its global standing. 

“We see the Chinese President (Xi Jinping)’s ‘One Belt, One Road’ initiative as the new form of globalization which does not divide the world into teachers and students but is based on common respect and common advantages,” Orban said.

Li arrived in Budapest on Sunday for an official visit to Hungary and for the sixth meeting of the heads of government of China and the 16 countries.

During his stay in Hungary, Li will hold bilateral meetings with CEEC leaders and work with them to outline future cooperation. He will also witness the signing of a series of cooperation documents and celebrate the fifth anniversary of the establishment of the 16+1 cooperation.