China’s much-famed Belt and Road Initiative was already fishing in troubled waters as it faced numerous setbacks. Now, the pandemic and its aftermath have dealt a huge blow to Xi Jinping’s pet project as in a significant development, Romania has decided to abandon a joint nuclear project with China under the BRI, which according to various experts has happened due to American pressure.
Romania is one of the USA’s closest allies and it seems that the country has prioritised its ties with the USA over China. Under the Belt and Road Initiative, Romanian firm Nuclearelectrica had signed an MOU with China General Nuclear (CGN) to construct and operate two more nuclear reactors. Nuclearelectrica possesses two nuclear reactors and amounts to one-fifth of the country’s power supply. It is important to note that the Romanian government owns 80% of the company.
In the proposed Joint Venture, CGN was slated to own 51% of the project which now stands scrapped as last week the Romanian government ordered Nuclearelectrica to find new partners as it asked the company to “initiate the procedures regarding the ceasing of negotiations with CGN, as well as the ceasing of the legal effects”.
It’s a body blow for China, as its Premier Li Keqiang started the negotiations back in 2013 when he became the first Chinese Premier to visit Romania in two decades. Keqiang ensured a number of bilateral agreements were signed including an MOU on the peaceful use of nuclear energy. There was discontent in the Romanian government over the deal in January itself as Romanian Prime Minister Ludovic Orban warned that, “the partnership with the Chinese company is not going to work.”
“All these concerns – a Chinese investment in critical infrastructure, CGN on the entity list [of the US], Romania hosting US troops and an important missile defence system, the problems with state aid – I think the Romanian government decided it’s best not to continue the project with CGN, considering that negotiations were difficult anyway,” said Andreea Brinza, vice-president of a Romanian think tank.
“The US pressure on the region started relatively late, in 2018, after several years of … growing disillusionment [among central and eastern European countries] with the terms of economic cooperation that China has offered, particularly within the 17+1,” said Jakub Jakobowski, a research fellow at Centre for Eastern Studies.
The “17+1” summit between Xi Jinping and the leaders of the European countries was earlier slated to take place in April but has been postponed in the wake of the Wuhan virus. A report titled “Empty Shell No More” advocated ways for the 17 countries to band together before future summits, such as “17+0” meetings without China so as to develop an agreement on unified demands.
The report was authored by the China Observers in Central and Eastern Europe which consist of 10 China scholars, each from a different Central and Eastern European country — found that all the 17 European countries had witnessed an increase in their trade deficit with China ever since the group was formed in 2012.
This move came close on the heels of Israel’s decision of awarding a US$1.5 billion desalination project to a local company over a Hong Kong-based company after the personal intervention of US Secretary of State, Mike Pompeo who raised concerns over the growing Chinese investment in Israel.