By: Kashif Anwar, Research Analyst, GSDN

In evolving global geopolitics, relationship between two nations not only defines the nature of bilateral relationship they have but how vital they are to each other. Following the dissolution of former Soviet Union, Croatia declared its independence from Yugoslavia in 1991, allowing China and Croatia to established diplomatic relations on May 13, 1992. Since then, both nations worked towards to improve relations on various level from cultural interaction to strengthening of economic cooperation and trade. Education and Cultural cooperation inked in March 1993 and Comprehensive and Cooperation agreement signed in 2005 started a transformative period in Croatia-China relationship. As in the last two decades Chinese investment in infrastructure projects in Croatia like Senj Wind Farm or Pelješac Bridge and ongoing cultural and education exchange program has improved the bilateral relationship.

Although, US-China geopolitics especially in the context of Europe has kept European nations in a complicated situation in the context of economic, security and national interest, Croatia approach isn’t completely different. Overall, in Croatia’s Foreign Policy China’s isn’t a prime focus like the National Security Strategy of 2017 document doesn’t mention China and Foreign Ministry’s Implementation Programme for 2021-24 refer China in positive sense in the context of the Chinese-led ‘China-Central and Eastern Europe (CEE) Cooperation Initiative’. Such an approach shows Croatia will align their foreign policy with the European Union (EU) having a broader approach towards China, considering growing differences between the West and China.

With Croatia exposure to China is 3%, Croatia’s export to China is 79 million Euros and import from China is 1.3 billion Euro in 2023, largely remain the same since 2021, shows Croatia will be less impacted by the EU’s de-risking strategy to counter China. Further, no screening of the Chinese investment in place and trade data highlight that the Croatia-China bilateral ties will remain the same despite the on-going de-risking strategy.

Recent visit by Wu Hongbo, a Special Representative of the Chinese government on European Affairs to Croatia from June 27-29, 2024 to address the Dubrovnik Forum has raised various issues. The paper will discuss whether the visit will strengthened Croatia-China relationship or a change will emerge in Croatia and China bilateral relationship due to the change in the West’s approach towards China in the recent years.

Wu Hongbo’s Visit and Croatia on the US, EU and China

On June 27, Wu Hongbo, a Special Representative of the Chinese government on European Affairs met Croatia’s high-level officers like Zvonimir Frka-Petešić and Frano Matušić, State Secretary of the Ministry of Foreign and European Affairs of Croatia. During the visit, he stated China want to further deliver on its promise, and the Chinese government is ready to work with Croatia on vital common understandings which were reached between China and Croatia to advance their bilateral ties. The visit allows China and Croatia to have in-depth discussion on mutual interest issues and concerns like China-EU relationship and cooperation between China and the Central and Eastern European nations.

The Wu visit highlighted that China is working to have a vision of a community with a shared future for mankind for which China will promote a new type of international relations and such aspect was elaborated at the Dubrovnik Forum. At the forum, Dubravka Šuica, a Croatian Politician and the Vice President of the European Commission for Demography since 2019, emphasised that Croatia and the EU should recalibrate their relationship with China. Considering a shift is taking place in the EU, Croatia reiterating their commitment to One China policy, the upcoming Presidential election in December 2024 is being closely watched.

As relation between the West and China is on a low in recent years, the ongoing developments in Taiwan, Middle East and Ukraine, and the role and position of China in such developments have raised concerns and China’s intent are being questioned by the West. However, former Croatian President Stjepan Mesić, under whose leadership the comprehensive and cooperation agreement was signed which has improved China-Croatia economic cooperation, nn the issue of China, he argues that there is a silent (economic) war going on between the US and China and the EU should go back to its pre-2019 policies, follow less US demands and accept China’s economic (olive branch) outreach as the century belongs to China. As he argues China has a pivotal role in the global geopolitics and stresses China’s development is ahead of other countries which isn’t economic in nature and other nations and especially Europe to accept China’s opening-up which took in the last few years.

However, following the passage of the EU Foreign Subsidies Regulation (FSR) in 2022, which protect European economies and restrict Chinese companies, and could impact China-Croatia relation. It targets tender worth over 250 million Euro and substantially subsidised companies, such moves impact the Chinese infrastructure investment drive in Europe and infrastructure project being awarded to Chinese companies. China views Croatia following EU’s approach, will impact Croatia-China ties and impact and limit all future Chinese projects in Croatia. As FSR has caused panic among Chinese bidders as they started to withdraw from tenders to avoid any investigation and has impacted Croatian government drive to attract Chinese investment in the infrastructure projects.

As Croatia-China economic cooperation has remained positive with a favourable attitude towards Chinese investors to invest in sectors like railways, energy, logistics and infrastructure. Such an aspect is visible in the case of China’s Norinco International US$ 220 million investment in a 156 MW wind farm in Senj – the biggest Chinese investment – which got delayed by COVID-19 and once pandemic stopped the Croatian government invited Norinco and the project got completed by the end of 2021. On the other hand, the recent political shift within the EU has been prompt by growing the US demands and involvement which could change cooperation dynamics between China and Croatia.

Conclusion

Although, Croatia remains hopeful of the China-CEE Cooperation Initiative and stresses on EU’s principles, values and rules as a paramount framework and operate and cooperate with China within China-CEE Cooperation. However, for Croatia, the trade relation with China has remained deficit for long and despite such circumstances it continues to see China as a potential trading partner. On the other hand, other EU members are slowly distancing itself from any cooperation with China as recently witness in the case of Italy who withdrew from China’s BRI. Further, with the US Presidential elections on the brink and the scope of former US President Donald Trump being re-elected as the US President is high, Europe’s dynamic, relations between the US and EU and ongoing West’s silent war will see tremendous changes. Under such a situation, Croatia-China relation will walk a tightrope in the coming months and whether Croatia bulges to West’s pressure and distances itself from China, will have to be seen in the coming times.