The global recession of 2008 appeared to end the honeymoon between globalization and the reduction of international trade barriers. This was especially visible in the European Union, which saw a surge of conservatism as European economies suffered. With the EU unable to assist its members, the countries turned to China for financial aid. In return, China saw this as its chance to enter the EU using the engine of its newly–formed superpower status–its economy. From loans and financial aid to foreign direct investments (FDI), China began to pour money into the EU market. The poorer EU members accepted this money without hesitation while the wealthier EU members saw this as a security threat. Like the old Soviet Union, China was an Eastern superpower that sought to expand its influence across the globe. Europe was no exception.
To counter this threat, the EU contemplated enacting laws that would increasingly regulate foreign investments in the trade bloc. China appeared to already have enough influence over some EU members to frustrate any EU attempts to pass laws with significant regulation over foreign direct investments. In 2017, the EU appeared to have found its answer. It submitted a proposal for a member–wide screening process that would not have binding effects on its members, but could be used to counter inward FDI. Once it became apparent that this proposal could pass, China turned its eye to the Balkans, where the EU plans to expand in the near future. By doing so, China hopes to circumvent any new EU law by pre–emptively solidifying itself in the economies of Balkan countries. Accordingly, China has included the Balkans into its global One Belt, One Initiative economic policy, which hopes to create a modern version of the Silk Road, with China at the center.
With the EU facing enlargement fatigue and still recovering from the 2008 crisis, current indications are that China is succeeding in its strategy.
The Balkan Loophole: China's Potential Circumvention of EU Protectionism,
27 U. MIA Bus. L. Rev.
Available at: https://repository.law.miami.edu/umblr/vol27/iss1/8