In 2017, Albania signed a cooperation agreement with China in the framework of the Belt and Road Initiative (BRI). It was conceived as an attempt to enhance bilateral cooperation in the areas of infrastructure, production capacity, tourism, and agriculture. Six years later, very little has been achieved.
During a tour of Albania by Chinese Vice Premier Zhang Gaoli on April 17, 2017, both sides stated that the Balkan state is a major country along the Belt and Road. Zhang encouraged Tirana and Beijing to speed up the negotiation and signing of an inter-governmental Memorandum of Understanding on the BRI to better plan and guide bilateral cooperation in order to yield more fruitful results.
Zhang, as quoted in a Xinhua article, said:
China would like to take an active part in Albanian major infrastructural and energy projects such as roads, hydro-electric power stations and economic development zones, and strengthen cooperation on cultural and people-to-people exchanges, filmmaking, education and tourism.
Yet it took five years after Zhang’s visit for Albania to sign the Memorandum of Understanding “On the Establishment of a Joint Working Group for Investment Cooperation” on February 2021 by the Minister of Finance and Economy, Anila Denaj and the Chinese Minister of Trade, Wang Wentao.
Albania learns from failures in other Balkan countries
While there are about 120 Chinese-linked projects worth almost USD 32 billion in the Balkans — the majority of which are in the infrastructure and energy sectors — Albania has largely steered clear of piling on huge Chinese debt in exchange for development, opting instead for acquisitions that don’t threaten to leverage the country’s future, Foreign Policy wrote in an article.
One of the examples of mounting Chinese debts in the Balkan is Montenegro: a USD 1 billion BRI highway which failed multiple feasibility studies and was mired in delays. The first 41 kilometers of the 163 km highway opened in July 2022. Once hailed by China as a landmark project in 2014, the highway has since become a cautionary tale that fused together the perils of poor-quality Chinese construction and cursory lending practices with endemic local corruption concerns in the Balkan country.
North Macedonia had a similar unflattering experience with the loans from Exim Bank of China for building highways. Nearly nine years since the beginning of the construction works, the crucial Kičevo–Ohrid highway has not been completed. Meanwhile, China, as part of BRI projects, also encroaches on North Macedonia’s railroad sector.
Asked if Albania should be concerned about repeating the problems experienced by other Balkan states, Tirana-based political analyst Ben Andoni told Global Voices:
It should be very afraid. Great differences in international politics place both countries on almost opposite sides of the barricades. Albania is a loyal ally of the US, of which China is a determined opponent and challenger. The highway project, which took so long, and the debt for which Montenegro received a loan from the Export-Import Bank of China, openly showed an image of China in our region and in Europe that is not very positive.
China's presence in the Balkans seems large and has grown in recent years. China has invested billions in the region and raised concerns about financial dependence on Beijing. Fortunately, China's behavior led to the mobilization of European financial institutions to help Montenegro repay its debt to China in the amount of one billion dollars. Albania with its capacities could find it much more difficult, and a long negotiation would be needed, if faced with such a situation. So caution must go hand in hand with concern.
And indeed the progress in Albania's participation in the BRI has been slow. The country’s stand towards the initiative was clearly articulated by the prime minister during a recent official visit in Japan. Edi Rama stated he saw no economic benefits from what is left of China's “17+1″ economic cooperation bloc with Eastern European nations — a format launched before the BRI and then used in realizing goals of the BRI.
The bloc's membership has been shrinking, with Lithuania withdrawing in 2021 and Latvia and Estonia pulling out last year. Speaking with Nikkei Asia in Tokyo on February 22, 2023, Rama described the framework as not having been beneficial, adding “In terms of economic impact, I would say zero.” Still, Rama said, his government is “not going to withdraw. We are going to stay, and I think withdrawing in principle is not a good idea.” He added that it is important for countries to “talk as much as we can to each other” and to “put ourselves in the shoes of others.”
A zero-sum game despite historical ties?
Albania is in fact pre-conditioned for cooperation with China. It was one of the earliest European nations to establish diplomatic relations with the People’s Republic of China, in 1949. In a way it might be more appropriate to talk about China's return rather to than arrival in Albania. Indeed, the support for the Albanian economy was crucial during the 1970s. In 1973 and 1974, Albania sent 24 percent of its exports to China, from where it received 60 percent of its total imports (in investment goods and financed through Chinese financial support). The years 1971–1975 can be considered “the golden years of bilateral economic cooperation.”
But today's Albania is a NATO member, a close US ally and wants to see itself part of the European Union in the future. “We want to share our security burden with countries that are part of our strategic alliances. These are named United States and European Union,” Rama said during the same interview with Nikkei Asia.
Washington and Beijing are clearly competing for attention, and, according to the same Foreign Policy article, the US seems to reward Albania for saying no to China:
Washington’s renewed interest in Albania began in 2020, when the country joined the Clean Network initiative, a Trump administration program that sought to challenge the dominance of Chinese firms in 4G and 5G mobile technology. Albania was the first country in the region to join and has used its participation to curry favor with Washington, which has been glad of the support in the region.
National security is perhaps one of the main obstacles preventing large Chinese projects, as Leftioni Peristere, a journalist who covers China, explains to Global Voices:
For China, projects in Albania are very small. Interest in renovating the entire electricity transmission network, which is badly needed, has been expressed. But there are factors requiring analysis as to why such a project cannot be trusted to a Chinese company. Albania is a NATO country; it cannot leave the entire energy network, a critical infrastructure, in the hands of a Chinese company.
Peristere also points that China had to forgive loans for BRI projects, something often played down by Beijing because:
Since the BRI is considered an exclusive initiative of President Xi Jinping, even without reaping any results, it will be promoted domestically in China, as a success of the leader.
In any case, China has not accomplished much in this historical return. According to China Index, an initiative of Doublethink Lab, a Taiwanese civil society organization devoted to studying the malign influence of digital authoritarianism, Albania is one of the least China-influenced places on a list of 82 countries surveyed so far. Mostly, Beijing is present in media and in trade. So far it would seem the Sino-Albanian friendship of the 70s has not yielded much support for the BRI, and remains largely symbolical.
Asked how Albania should treat the cooperation with China in the current geopolitical situation, Andoni mentions the memory of historical and cultural ties is still alive in the older generation in China:
We must use this for the benefit of our two countries, including in sports, but without affecting the international obligations of the two parties.