Moldovan Foreign Minister Mihai Popsoi told Xinhua in a recent interview that Moldova is willing to promote cooperation with China and learn from China’s advanced experience in various fields.
For Moldova, China appears to be a neutral actor, free from the historical baggage that Russia brings along with it. Moreover, Beijing presents itself foremost as a trade partner and does not demand any democratic or institutional requirements, as is the case with the EU.
Up until recently, Moldova seemed to have only little to offer for China. Despite recent progress, Moldova remains the poorest country in Europe by GDP and has the lowest Human Development Index on the continent. Moldova’s economy heavily relies on its agriculture sector, featuring fruit, vegetables, and wine. Emigration, especially among young people, is unusually high as roughly one million Moldovans work abroad. In general, Moldova’s economy remains vulnerable to a large range of threats including corruption, political uncertainty, weak administrative capacity, vested bureaucratic interests, energy import dependence, Russian political and economic pressure, and heavy dependence on agricultural exports, as well as unresolved separatism in Moldova’s Transnistria region.
Despite Moldova’s predicament, China has been paying increasing attention to the country. Since the establishment of official diplomatic relations in 1992, political relations between Moldova and China developed smoothly. This trend went even further after 2001 when the Communist Party of Moldova came into power. At this time, China strived for stronger relations with Eastern Europe and the South Caucasus mainly by offering a series of loans to build or modernize local infrastructure. Simultaneously, both countries developed a trade relationship. With regard to the structure of trading goods, wine and furniture are almost the only Moldovan products imported by China. In contrast, China’s exports to Moldova cover a wide range of goods such as electric machinery, plastics, rubber and chemical products. Chisinau also managed to obtain several loans from China. The first major loan was made in July 2010 when Beijing signed a Memorandum of Understanding (MoU) to lend Moldova $1 billion which amounted to a tenth of the country’s GDP.
Growing Chinese Footprint
The rapid growth of the Chinese presence in Moldova occurred in the wake of the launch of the Belt and Road Initiative in 2013. Indeed, under this project, Beijing has invested heavily across the Black Sea region, including Moldova. Chinese State-owned enterprises (SOE) have poured billions of dollars into the Continent to acquire strategic assets in Western Europe, develop energy and port infrastructure in Southern Europe and increase transport connectivity to Eastern Europe.
In this strategy, Eastern European countries including Moldova have emerged as an overland corridor to access the European market. Indeed, Moldova appears at once as a landlocked country stuck between Romania and Ukraine, and, more positively, as a path of least resistance to the European markets for China. To this end, China has expanded its economic presence in Moldova through three major projects.
In 2015, Chinese SOE China Shipping Container Lines launched container shipping services in the Moldovan port of Giurgiulesti – the country’s only port accessible to seagoing vessels- through the Danube river after signing a terminal service agreement with the domestic operator. This investment provided the landlocked country an important export lifeline for its products to global markets, especially since its economy was suffering from the Russian embargo on imports of Moldovan wine. According to companies involved, the Giurgiulesti International Free Port was to develop into a logistics hub and business park for Chinese companies to access the EU and CIS markets.
