This paper aims to empirically verify the possible existence of “a Chinese effect ”, that is, a substitution effect between the Chinese and the EU-15 investment in the Central and Eastern European (CEE) region, which has been recently involved in the Belt and Road and 17+1 Initiatives. Such an effect can result from the strengthened political orientation of several CEE authoritarian populist and illiberal elites towards China, which can, in turn, discourage the EU-15 from investing in the CEE region. Despite intensified Sino-CEE political relations, the results of the analysis conducted on 15 CEE countries during 2010–2018 suggest that the Chinese FDI does not substitute for investment from the EU-15 market since the expectations regarding the FDI cooperation between China and the CEE region have not been met. Moreover, most of the Chinese investment has been made via mergers and acquisitions, and not via greenfield FDI, which may lead to exaggerations of the relatively weak Chinese influence in the CEE region.
foreign direct investment, China, soft power, Central and Eastern Europe
Lubica Stiblarova is currently an assistant professor at the Department of Finance, Technical University of Kosice, Slovakia. Her research areas include international relations, investment, and especially topics related to fiscal and monetary integration.
Anna Junakova is currently responsible for the economic agenda at the Košice Regional Chamber SOPK, Slovakia
Jana Gregova is a PhD candidate at the Department of Political Science, Pavol Jozef Šafárik University in Košice, Slovakia. Her research areas include political science, economics, and environmental studies. She is currently focused on the theory of hydropolitics as an instrument of foreign policy.