24.05.2024.

Through economic dependence on China to political influence in North Macedonia

By the end of 2022, China participated with 2,6 percent of total foreign investments in North Macedonia, which is 10 times less than neighboring Serbia, for example.

On the other hand, the external debt of North Macedonia towards the People's Republic of China by the end of 2022 amounts to 479 million dollars. This is as much as 8,7 percent of the total external public debt and 3 percent of the Macedonian gross domestic product (GDP), according to the data of the non-governmental organization "Estima".

The debt arose due to financial loans from Chinese banks for the construction of two infrastructure projects - the Kozjak hydroelectric plant and the highways Miladinovci - Štip and Kičevo - Ohrid, according to "Estime" data.

According to the president of this organization, Ana Krstinovska, the amount can be managed, but the agreement between the Chinese bank and the Public Undertaking for State Roads is largely asymmetric.

"There are loan clauses in the agreement that provide that China can unilaterally and prematurely terminate the agreement, allow or not to reprogram. All these criteria are arbitrary, to act in accordance with its management and rules, and are not aligned with international rules. If we ask for a change or termination of the loan agreement or we have a dispute, the arbitration for the agreement is in Beijing, the legislative model is Chinese," says Krstinovska.

No investment, only loans

The entire research is contained in the publication "Hope for the best, prepare for the worst: Is North Macedonia sensitive to China's economic pressure", prepared in cooperation with the "Konrad Adenauer" Foundation and the "Justinian First" Faculty of Law.

The analysis shows that China's presence in North Macedonia in terms of investment is marginal. China does not appear as an investor, but provides loans to finance state projects.

In some countries, says Krstinovska, there is a tendency to reduce investments, an example is Albania, but also NATO member countries that have a more critical attitude towards China.

North Macedonia, as he states, "does not have a penalty for a negative attitude, nor a reward for a positive attitude towards China, as is the case in Serbia."

"In Serbia, the leadership is sympathetic to China for political reasons, with the situation regarding Kosovo. China is rewarding Serbia for that political support with investments," says Krstinovska.

Krstinovska, who is one of the authors of the analysis, points out that the Chinese presence in the developing countries of the Western Balkans, including North Macedonia, has several elements.

Helping through economic presence in investments and infrastructure, which satisfies its needs and interests. In this way, it acquires allied countries, which in turn can support China in international relations. In addition, China also "exports" ideological views to the world, and on the other hand, it controls criticism of that country.

"China has no need to mobilize significant resources to ensure a permanent presence or increased influence in North Macedonia. It can afford to wait, and we see an opportunistic attitude there, anticipating a potential policy change in some future election cycle and a more favorable environment for its activities. purpose, it has already managed to expand its presence and influence among the general public, as evidenced by the increase in favorable attitudes toward China in recent polls," the publication said.

Sustainable relations, not at the cost of the EU and NATO

China presents a "rosy" picture of how it operates in North Macedonia. The media reports on China's economic initiatives as the main partner of developing countries, advocating a common future for humanity, and promoting a multipolar world.

According to Aleksandar Spasov, a professor at the Faculty of Law and until recently an external associate of the president, the Chinese issue is underestimated in foreign policy and public debate. His position is that it is best for North Macedonia to position itself as part of already defined external political strategies and must not be part of daily politics and party fights.

It does not mean that North Macedonia, as a small country, should not think in global terms.

"We have to adapt so that we can get the maximum benefit from China while avoiding harmful influences. There is no economic relationship without foreign policy, they are connected. Our foreign policy and relationship with countries outside the Western community should start from our membership in NATO and should let's be careful not to join a non-aligned type of opinion. China's foreign policy is defined ideologically, which is China's sovereign decision, as a socialist communist system. This should be taken into account in building relations with China," Spasov believes.

For Vasko Naumovski, professor of the Faculty of Law and former vice-president of the Government for European Affairs and former ambassador to the USA, the region should maintain economic relations with China, but protect itself from possible negative influences. He believes that the main focus of North Macedonia and its western partners in the European Union (EU) is whether the country is in slight danger from the centers of power due to the long road to joining the Union.

"The European perspective of the Balkan countries is slipping away and there will be a need for alternatives to EU membership. In the absence of a European perspective, we should turn to the processes towards us, and these are the methods that we can achieve by joining the EU. We should not forget the processes of spreading influence in other areas , education, healthcare, social networks," says Naumovski.

He emphasizes that the state should be ready to prevent all these influences and risks from jeopardizing strategic directions.

"Perhaps a broader regional approach and action by some countries will be needed, because the influence itself is not always direct, but indirect through other countries," notes Naumovski.

Chinese influence on the electoral process

At the time before the last elections in North Macedonia, the head of the State Intelligence Agency, Erold Musliu, told RSE that in North Macedonia there is Chinese disinformation propaganda that takes the form of a campaign and produces Euroscepticism, and on the other hand offers citizens an alternative through the country's membership in BRICS and the Eurasian Union.

However, Musliu did not reveal which "actors" - political or media - he classified in this group.

Musliu said the Intelligence Agency recognized the hybrid strategy and selective use of narratives that evoke emotional reactions, exploiting sensitive issues in the region that especially gain intensity during election cycles.

CONCLUSION

As in most other Western Balkan countries, China is present in North Macedonia as a creditor for major infrastructure projects. However, unlike in other countries (such as Serbia, for example), China does not appear in North Macedonia as an investor, it does not invest in Macedonian economy, production capacities, etc. A particular problem in North Macedonia is represented by contracts that are entirely tailored to China as a creditor and are generally unfavorable for North Macedonia as the recipient of the loan.

In line with its strategy, China uses economic leverage to exert influence in other areas such as education, culture, and media. Increasingly positive narratives in Macedonian media about Chinese efforts to establish a new world order or spreading propaganda in the pre-election campaign prior to the recently held elections confirm that North Macedonia is also part of the strategy to create a so-called multipolar world.

Events in North Macedonia indicate the need for additional caution when entering into credit agreements with Chinese banks and creditors, especially since it is not only about the economic influence on states, but that influence also extends to other areas, including politics.