BELGRADE: In an attempt to secure business ties and increase political influence, China is on a charm offensive in eastern Europe — where the European Union and Russia are also vying for sway.

Chinese Prime Minister Li Keqiang, accompanied by 200 corporate executives, met the leaders of 16 central and eastern European countries Tuesday for a two-day summit being billed in China as an opportunity not only to deepen ties to the region and boost relations with the EU.

The Asian economic power is interested in energy, infrastructure and other big projects to fuel its economy at a time when labour costs are rising at home, risking crimping its exports, its traditional economic strength.

Chinese investors hope to boost their presence in the region where Western companies may be reluctant to take financial risks.

The timing of the China summit — the third such in three years — is significant as it comes while Russia, the traditional regional powerbroker, is struggling with deep economic problems partly caused by crippling Western sanctions over Moscow’s role in Ukraine.

Only a few weeks ago, Russian President Vladimir Putin announced that Moscow is spiking a multibillion-dollar gas pipeline project for southern Europe that was to pass through several east European countries, which was to bring them hundreds of millions of dollars in transit fees.

Putin argued that the EU’s opposition to the South Stream pipeline — which would have run under the Black Sea to Bulgaria, Serbia, Hungary and further on to Europe — meant Russia had no other choice but to scrap it.

The 16 European countries at the summit all share a former communist past. Some, like Bulgaria, Romania, Poland and Hungary, are part of the EU.

Others, like Serbia, would like to join, but are still influenced by Russia.

“The difference between the Russian and Chinese approach in the region is that Russians are more political, while Chinese are more commercial,” said Serbian economy analyst Miroslav Prokopijevic.

Published in Dawn, December 17th, 2014