China likely to shrug off Baltic states’ withdrawal from economic grouping

The decision by Latvia and Estonia to follow Lithuania in leaving the former 17+1 grouping probably came as little surprise to Beijing

Participants have complained that they are not gaining the expected benefits while China was already looking to refine its approach to foreign investment

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Lithuania quit the grouping last year and urged the other Baltic states to follow suit. Photo: Shutterstock

Published: 8:48pm, 12 Aug 2022Updated: 10:05pm, 12 Aug 2022

The withdrawal of the Baltic states from China’s economic grouping for central and eastern European countries is unlikely to have a big impact on Beijing’s overseas infrastructure drive, according to Chinese diplomatic observers.

They said China had already been adjusting the projects funded under the Belt and Road Initiative – its signature intercontinental infrastructure initiative – and the decision by Latvia and Estonia to follow Lithuania in leaving the former 17+1 group had been expected.

Wang Yiwei, director of the Centre for European Union Studies at Renmin University, said the decision “came as no surprise” as the three countries often aligned their diplomatic approach.

The cooperation platform – consisting of projects to build bridges, railways, power plants, as well as fostering trade links – is seen by Beijing as a way to built connections to Europe.

But participants have complained about a lack of tangible economic progress from the group, which was established as the 16+1 in 2012 and became the 17+1 after Greece joined in 2019.

“There were some over-expectations over China’s overseas infrastructure investment, but now as the Chinese economy is slowing down, the belt and road is also being refined to become more focused on small projects with higher quality,” Wang said.