While the EU Makes Plans for CEE China Makes Investments

emerging europe belarus outlook ebrd

Read the Outlook on Belarus special report


Frank Schuhholz

About Frank Schuhholz

Frank Schuhholz is a logistics expert and the founder of FMS Advisers. He holds a double degree in International Management. He started his career with Hellmann Worldwide Logistics. In 2003 he became Head of Logistic Services at DB Cargo headquarters in Mainz. In 2010 he became managing director of ERS Railways B.V., Rotterdam. In June 2016 he founded his own company, FMS Advisers B.V. headquartered in Den Haag, NL. A key focus area for him is the Chinese One Belt One Road initiative, which links China and other Asian countries with Europe where he advises companies on how to link Asian with European markets.

“EU member states should be looking at all these initiatives with a view to how Europe could profit from the developments without giving away its strategic assets, namely its key infrastructure and without having had in-depth consultations on how to benefit from increased the Chinese spending in global infrastructure projects.”

Numerous large investments are already underway along the so-called Silk Road that connects China with countries such as Kazakhstan, Pakistan, Iran, the former Soviet Republics and, last but not least, Europe.

When talk turns to Chinese investments in Europe, people tend to think about Chinese companies acting as foreign investors, buying European companies in order to gain market access. Many people listen to the news carefully when it is about Chinese companies buying (western) European firms in the high tech sector however, Chinese involvement in strategic infrastructural projects catches less attention amongst the western public.
This is another element of China’s financial involvement which is beginning to be seen more and more clearly in the Central and Eastern European states, yet many of the agreements which have been made between China and the Central / Eastern European countries remain unknown known to the greater public.

Did you know, for instance, that back in 2010 Hungary signed a $5 billion agreement to upgrade the Hungarian transport infrastructure, namely roads and railways, during the visit of the Chinese president? This happened notwithstanding the fact that the European Union was/is spending billions and billions in upgrading its European transportation networks (TEN-T) which also have a focus on the Central and (South) Eastern parts of the EU?

Take the example of Greece: it is unnecessary to summarise all the elements which have led to the current state of affairs. However, a few developments might have caught the interest of supply chain professionals who are thinking about how to redesign the trade flows between China and Europe and vice-versa in order to maintain a competitive edge in the fight for consumers’ money.

Hewlett Packard is one of the companies which started to implement fundamental changes in its supply chain organisation, roughly eight years ago, in particular by setting up a direct rail connection from their inland China-based production facilities towards Europe. Another big change within the organisation was the relocation of their supply chain headquarters from Rotterdam, in the Netherlands, to the Port of Piraeus, in Greece.

At the time many people did not understand what was going to happen. However, from an outside perspective looking into HP, the company had an ambitious plan: to anticipate, and eventually to be, a driving force in the changing trade patterns between Asia and Europe. It planned to do this by re-routing cargo flows between China and Western Europe through the Mediterranean basin, where the Chinese saw the Port of Piraeus was set to play a key role in their future strategy on how to develop and implement a key element of the One Belt One Road initiative.

Interestingly enough, even a few years ago these developments that happened within a member state of the European Union were simply by public opinion as well as in most of the European logistics world. The port of Piraeus and its infrastructure seemed too small and the Greek problems far too big, in total, to make the Chinese’ project to become a strategic investor in the country worth noting in the press or in the board rooms of the big western European port-holding companies.

Things have changed in the meantime. The port of Piraeus has been bought by the Chinese shipping company Cosco who announced a merger, straight after that, with its Chinese counterpart, China Shipping, which made them an important player in the top league of shipping companies.

Interestingly enough the sale to Cosco was triggered by the fact that the International Monetary Fund, as well as EU institutions, were forcing the Greek government to sell off state-owned assets in the attempt to reduce country’s overall debt levels towards its creditors. The tender process took some time and other global port operators were also mentioned as being potentially interested in purchasing this asset.

At the end of the tender process, however, it became clear that none of the port-operating companies that bid for this asset could gather enough commitments from shipping lines (who were fighting their own fight for survival) to make this case a viable investment for the future years to come.

This situation must have looked different to the Chinese consortium, where volume streams would eventually considered more flexible to being re-routed, thus making Piraeus a key element in the Chinese One Belt One Road strategy, serving as a logistics hub within the Mediterranean region.

As a matter of fact, today, Piraeus has become one of the fastest growing ports in the world with a total planned capacity of more than five million TEU (twenty-foot equivalent unit), which is roughly half of the size of the port of Hamburg in terms of container volumes. It should be noted that the growth in volume does not come from growing global trade but rather from Chinese companies deciding to re-route their volumes via the new set-up at the port of Piraeus instead of running them through a range of Northern European ports.

In the end, the example of the port of Piraeus best illustrates what changes we can expect for Central and Eastern European infrastructure projects in the years to come. As I have already said, around a dozen larger infrastructure investment plans have been discussed and agreed upon between the Chinese government and the respective countries, in South East Europe alone. These loan and financing agreements are all more or less located on a line that runs up from Greece to Hungary, somehow illustrating how China sees its approach towards the European markets.

Whilst Hungary has pretty much been the starting point for Chinese money to flow into the Central European infrastructure, Serbia signed a $1.5 billion agreement in June, this year, with the Chinese government to upgrade its road and rail network. Moving across the Central and Eastern European region it can be observed that countries around the Black Sea are rumoured to be in negotiations with Chinese authorities concerning getting infrastructure investments that will help them get connected to the One Belt One Road initiative.

Georgia, is a founding member of the Asian Infrastructure Investment Bank, and has already taken the decision to become connected to the Chinese initiative, by starting implementing plans for 700,000 TEU deep sea port at Anaklia, 25km south of Poti. The port is planned to be operational within the next four years.

Further north, in Eastern Europe, in Belarus, a project called ‘Great Stone Industrial Park’ kicked-off back in 2010, when today’s president of China visited Belarus and initiated talks about the development of a hub located close to Minsk airport and only two and a half hours’ drive from the Belarus-Polish border (consequently the Eastern EU).

The project, which can best be described as a large free trade and investment zone, covers an area of over 90 sq. km and will eventually hold workplaces for roughly 100.000 people. The project is intended to attract local, as well as international, investors to use this location as a manufacturing, trading and distribution hub which is closely ties to the railway corridor that links Europe with China, via the Trans-Siberian route.

It could be said that the Chinese government’s ambitions to revitalise the ancient trade routes between China, the Middle East and the Mediterranean, as well as Europe, have become more visible over the past years although we are still at the beginning of this decade long implementation plan. EU member states should be looking at all these initiatives with a view to how Europe could profit from the developments without giving away its strategic assets, namely its key infrastructure and without having had in-depth consultations on how to benefit from increased the Chinese spending in global infrastructure projects. What is Europe’s response to that?


The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.


Belarus’s Election Tests the EU’s Global Strategy

The Great Stone Industrial Park — Making Doing Business Easy in Minsk

Under Promise, Over Deliver: Prospects for the EU’s Eastern Partnership in 2018

Eastern partnership

The Belarusian real estate market is on the up

Will the New Five-day Visa-free Regime Encourage More Visitors to Belarus?

The Next Four Months Crucial For the Belarus-EU Relations

Invest in Belarus: looking beyond politics to the future

FocusEconomics: Belarusian Economy to Grow in Q4 2016 and Onwards

Italy and Belarus: A Relationship Based on Complementarities and History

Cautious Upturn in Emerging Europe Haunted by the Spectre of Uncertainty

Donald Trump

The EU Is Encouraging Belarus to Join the World Trade Organisation

Business Opportunities in Belarus Encourage Outside Interest

The EU’s Benign Neglect of Eastern Europe

Is the CEE Region About to Steal the Outsourcing Crown From India?

Amazing view on the Taj Mahal in sunset light with reflection in water. The Taj Mahal is an ivory-white marble mausoleum on the south bank of the Yamuna river. Agra Uttar Pradesh India.

Belarus Is Where the New Silk Road Heads For Europe

Encouraging SME’s Development Will Help Build Belarusian Economy

The Belarusian Economy: The Challenges of Stalled Reforms

Georgia Leads Emerging Europe in Ease of Doing Business Report

Belarus is the most creative EEU country

Bringing Belarus’ Cultural Past to Life for Belarusians and the World

Emerging Europe Live: CEE — The Outsourcing Destination

New investors interested in Belarus’ Great Stone Industrial Park

Veni, Vidi, Vici, Or My Personal Experience of Doing Business in Belarus

Belarus-Turkey Investment Forum to increase investment and trade between the two countries

Belarusian Journalists Still Face Huge Problems

Smart, reliable and promising

World Bank’s Doing Business Report 2016 Resume For Emerging Europe

Not All Quiet on the Eastern Front

Foreign Investors: Belarus Offers Opportunities But Further Improvements Are Needed

Belarusian Economy on a Diet to Change its Financial Outlook

Belarus: MOST Builds a Bridge to the Future

Czechs Hold Emerging Europe’s Most Powerful Passport

IMF Believes State-Owned Enterprises Must Be Reformed

Image of the banknotes of new Belarusian banknotes five rubles put into circulation July 1 2016

Using Words to Paint a Picture – Belarus’ Nobel Prize Winning Novelist

PandaDoc — Rolling Sales Procedures Together So Everyone Succeeds

Outsourcing in Germany: Stop Talking at and Start Talking to

OECD: Belarus Has to Find Its Own Belarusian Model to Emerge

Belarus Has Set an Example for Others to Follow

Foreigners choose Minsk and Gomel as Belarus’ most attractive FDI destinations

Belarus: Changing Old Ideas And Mixing With the New in Belarus’ Export Market

Emerging Europe Makes Some Progress on Closing Gender Gap

world economic forum gender gap report

Breaking trade barriers with CIS has never been easier

Long-time Neighbours Need to Share Awareness, Plus Trade & Investment

The Proof of a Country’s Readiness to Attract Foreign Investors Lies in the Development of the Insurance Market

Brexit Makes Waves Across the European Union and Beyond

The Belarusian Financial Sector: An Industry in the Process of Restructuring

Lukashenka seeks to avoid commitment to Russia’s geostrategic goals

Emerging Europe Live: Life in Belarus As Seen by Foreigners

The Deep Roots of Currency Crises in the Former Soviet Union

Belarus: On the Way to a Market Economy?

Belarus: Navigating the geopolitical storm

Belarus Is Making the First Steps onto the International Finance Floor

Belarus Serves up Some Recipes for Success

Business in Belarus Recipe Book

Belarusian Economic Recovery May Downgrade Intended Reforms for Competitiveness

Belarus Is Ready to Begin With Venture Capital Investments

Young Well-Paid IT Specialists Are Making Belarus Known Internationally

The EU’s Benign Neglect Of Eastern Europe

Belarus Is One of the Top Outsourcing Destinations of 2016

One Belt One Road: a Big Task for Europe

Emerging Europe and the EBRD host the Outlook on Belarus conference in London

Belarusian Tech Companies Lead a Global Technological Advance in Outsourcing and Product Development

Why Is Belarus Tech Booming?

Germany and Belarus: Thinking Globally Acting Locally

Belarus is Bringing Opportunities for European Companies

Great Stone

Belarus Has To Make an Extra Effort To Change Investors’ Perceptions

Central And Eastern Europe At the World Property Market

EY: Belarus’ IT Scene Is Thriving

High tech park minsk

Innovation Brings Great Opportunities to the Belarusian Economy

Belarus 2020: Turning the Vicious Circle Into an Upward Spiral

Belarus and Singapore Share the Same Factors for Economic Success

Will European Business and Institutions Bolster the New Trends That Have Appeared in Belarus?

Germany Is Not Letting Belarus’ Small Downturns Put it off Looking for Investment Opportunities

21st century Manufacturing Arrives at Great Stone

Great stone

The Shopping Experience Is Set To Go Global in Belarus from 2017 Onwards

Are Labour Shortages Driving Economic Growth?

The Reality Is More Interesting Than the Misconceptions

The essence of the Customs Union is protectionism

Belarus and the EBRD:
Working to Expand the Country’s Strengths and Success

Belarus Steps Up Liberalisation of Business


The Belarusian Banking Sector Moving Towards Modernisation Despite Some Challenges

Serbia, Belarus and Ukraine Ranked Lowly by Wharton Business School

Kyiv Ukraine - April 172017: The postal square in Kiev on Podol the Dnipro river. view of the square from the river panorama

Falling Student Numbers and Declining R&D Result From Lack of Funds

A New Modern Mall Hopes to Draw Belarusians Back to the Home Market

RRY Capital

Despite Public Anxieties, Migration is Playing a Key Role in ECA Growth

Bratislava city aerial panoramic view. Bratislava is the capital of Slovakia.

A Strategic Asset for Regional Growth and Development in the EU

Pier bridge crane and cargo handling cargo trains transported away.

“e-Belarus”: Embracing the Internet and its Possibilities

HTP: Belarus’ Engineers Are Leading a Cool Revolution

Rolling Sales Procedures Together so Everyone Succeeds


Belarus Introduces New Business-Friendly Auditing Procedures

MINSK, BELARUS - AUGUST 15, 2016: Aerial view of the southwestern part of the Minsk with Palace of Sport and old and new other buildings. Minsk is the capital and largest city of Belarus.

The Eurasian Economic Union Fails to Bring Belarus Closer to Big Brother

Minsk International Airport Widens its International Reach


Winds of Change for Belarus’ Reinsurance Industry?

Business Mentors Helping to Solve Business Development Problems First

Portrait of confident business people interacting in the office

Office Space Vacancy is Currently Low but Building Standards Cause Concern

Minsk Belarus - March 23 2017 modern architecture business center Pokrovsky on Pobediteley Avenue editorial

Belarus US Business Relations Thrive as Conditions Improve

Belarus: The Importance Of Diversification

The Country Shows Promise but Needs Some Reforms

Belarus’ Economy Is Slowly Recovering From Past Declines

Brexit Is a Great Opportunity to Attract Foreign Investors to Belarus

EBRD Emerging Europe Outlook on Belarus 2016

From Denmark to Belarus — A Personal Experience of Business

UK Shores: the New Frontier, a View on a Series of Fortunate Events

High-Tech Park in Minsk is growing rapidly

More EU Help for Belarus SMEs

GRODNO BELARUS - DECEMBER 13 2013: Seamstress in textile factory sewing with a industrial sewing machine .

‘No’ To a Monetary Union With Russia

Why Was Zapad-2017 So Important?

russian tank belarus zapad

Emerging Europe to Record Positive Growth Across the Board in 2018

coins growth

The UK and Belarus: A Partnership to Introduce the Real Belarus to Europe

Feel the Vibe of the City of Minsk

Trinity suburb in Minsk (Nemiga) Belarus on 20 May 2017

Putin Urges Belarus to End Oil Transit Through Lithuania

Athens Greece - May 27 2016: Russian President Vladimir Putin delivers

Leave a Reply

Your email address will not be published. Required fields are marked *