Thewesternbalkans
The Silk Road Economic Belt and the 21st century Maritime Silk Road are the two pillars of the development strategy implemented by the government of the People’s Republic of China, which is focused on connectivity and cooperation between Eurasian countries. This strategy is known as One Belt and One Road Initiative until 2016, and as The Belt and Road Initiative (BRI) nowadays.
The Silk Road refers to land and sea routes connecting China with the Middle East and Southern Europe dating back to the Han dynasty (207 BCE – 220 CE). Today’s Air Silk Road is less often mentioned by experts, but it is well described in documents of the Chinese Communist Party and the state as an important part of the development strategy under the BRI.
China is implementing an infrastructure-based development strategy that has resulted in the construction of roads, bridges, tunnels, high-speed railways, ports, airports and terminals in key geographical points and strategically important locations on the European continent, including the Balkans. The BRI is not only a profit-oriented construction concept, but also a colossal strategic effort to expand Chinese influence.
The aviation component of the BRI, later called the Air Silk Road, was first publicly announced in 2015 by the General Administration of Civil Aviation of China (CAAC), in the form of a call to all BRI countries to implement “proactive, more liberalized and more flexible aviation policy”. Directly under the Chinese State Council, CAAC is a ministry-level body, which is responsible for the national civil aviation affairs.
The Air Silk Road strategic initiative envisages Chinese assistance for joint investment in the construction of airports and implementation of air traffic control under the umbrella of BRI. This strategy in relation to Europe has three main components: participation in airport infrastructure through ownership or concessions, operational activity of Chinese airlines and carrying out cargo transport to European countries.
Air Silk Road got a more concrete outline in 2017, when the Aviation Industry Corporation of China, Ltd. (AVIC) officially formulated the initiative as “an aviation industry development plan with wide support from partner companies in and out of China”. It should be noted that AVIC is the second largest Chinese state-owned space and military conglomerate and fall under US sanctions as of 2020 for ties to the People’s Liberation Army.
The initiative aims to provide integrated aviation solutions to countries along the Belt and Road, including building aviation infrastructure, MRO (Maintenance, Repair and Operations), finance service, etc., and intends to meet the needs of Belt and Road countries to increase aviation capacity, foster airport economy and boost other industries including tourism.
Under the Air Silk Road initiative, the investment, according AVIC, will be centered around infrastructure connectivity and emergency security focusing on aviation infrastructure, airline network and trade of aviation products.
The direct promotion of the Air Silk Road initiative by AVIC is an expression of the prioritization of Military-civilian fusion by the Xi Jinping administration. This strategy and policy of the CCP aims the transformation of the People’s Liberation Army into a world-class military.
The Air Silk Road initiative was promoted to the highest level when it was included in China’s 14th Five-Year Plan (2021-2025) for national economic and social development in 2021.
In parallel with the development and adoption of the fundamental conceptual documents of the Air Silk Road, the Chinese experts studied all the airports in the Western Balkan countries without exception, with a view to finding sites with possibilities for reconstruction, investment or their concession by Chinese companies. In this study, under the auspices of investment intentions, both special Chinese delegations and a variety of bilateral forums, creation of joint economic zones and other forms of development of partnership relations were engaged.
There are over 40 companies in China that have interest or opportunities to invest in airport infrastructure under the BRI umbrella. One of the most active in Europe and the Balkans is the HNA Group, based in the southern Chinese island province of Hainan. It has been exploring European airports for a long time and in 2017 took on a concession 82.5% of Frankfurt Hahn Airport. The same company, through Hainan Longquanren Century Invest and Development Co., a Chinese investment firm, unsuccessfully tried to take a 35-year concession for the airport in Plovdiv, the second largest city in Bulgaria.
In the period 2017-2018, HNA Group and Chinese-ASEAN Investment Cooperation Fund made an attempt to take over the concession of Nikola Tesla International Airport in Belgrade, the capital of Serbia.
In the Western Balkans, the pearl in the crown of Chinese acquisitions is the purchase in October 2016 of 100% of Tirana International Airport Nënë Tereza (TIA), by Keen Dynamics Limited, a JV between China Everbright Limited and Friedmann Pacific Asset Management (Hong Kong).
TIA is the busiest airport in Albania and the hub of Albanian Airlines and Belle Air. The airport is served by airlines from across southern Europe. It is operated by Tirana International Airport SHPK.
The deal was described by China Everbright Limited as “a proactive corporate approach to identify good infrastructure investment opportunities, which is in line with China’s ‘One Belt, One Road’ Initiative”. This acquisition was the first time that a Chinese enterprise has achieved a wholly-owned holding of a national gateway airport in the Central and Eastern Europe region. China Everbright Limited has also actively cooperated with the government of Albania in developing local tourism, planning further airport infrastructure investment, and striving to build an aviation logistics hub in the Western Balkans. In practice, China had the opportunity to directly influence the Albanian government’s policy in the country’s air transport sector.
The concession contract was due to expire in 2027, but in December 2020, Kastrati Group bought all the shares of the airport from China Everbright Limited. Kastrati Group, a leading private conglomerate with good connections to the Albanian government, now owns 100% of the share capital of Tirana International Airport. The Chinese company has left the airport in good condition and claims to have provided its shareholders with over ten percent return on shareholder capital. The takeover of TIA by the Kastrati Group before the end of the Chinese concession is a sign that the only operating airport in Albania will once again return to government control.
Chinese investors in airport infrastructure in the Western Balkans are entirely under the BRI umbrella, but so are Chinese airlines. At least a dozen Chinese airlines operate in European countries, but the most active in the Western Balkans are China Southern, HNA Airlines and the state-owned Air China.
China Southern has main operating bases in Urumqi and Xi’an, cities in Western and Central China that are the eastern points of the BRI.
HNA Airlines makes for a good example. It is part of the same HNA Group as HNA Airport. HNA Airlines has been operating direct flights between Beijing and Belgrade since 2017, which were suspended in 2020 due to the covid pandemic. On 16 July 2022, direct flights from Beijing were restored, and the first Chinese plane was personally welcomed by Serbian President Aleksandar Vucic at Belgrade Airport. The Chinese Ambassador to Serbia Chen Bo, present at the ceremony, stated: “This flight will play a positive role in the cooperation between China and countries in the entire region, and thus the position of Serbia as a regional transport hub will be strengthened”.
Bulgaria and Croatia, despite their efforts at the highest (presidential) level, have not been able to establish direct air links with China, mainly due to a lack of business interest rather than a lack of political will.
In contrast to the land and maritime Silk Roads, the Air Silk Road can overcome the infrastructure problems associated with land transportation, as well as the geographical limitations of maritime transportation.
Air Silk Road is an initiative carried out by the Chinese aviation industry, inspired by the BRI, to serve as the logistic backbone of air cargo serving Chinese retail sales in Europe and around the world. The covid pandemic closed many flights between China and Europe, but Air Silk Road cargo companies continued to operate at full capacity and even increased the intensity. All Western Balkan countries received medical supplies from China by air during the pandemic. In some cases, Serbia acted as a distribution center for other countries in the region. Following the example of Chinese ownership of European sea port terminals, China is moving to enter Europe’s airport cargo terminals.
China demonstrated the cargo potential of its air fleet with the delivery of Chinese FK-3 air defense systems to Serbia. On 9 April 2022, six Chinese Y-20 aircraft landed at Belgrade Nikola Tesla International Airport in Serbia, reportedly delivering a shipment of FK-3 surface-to-air missile systems, passing through the airspace of NATO member countries Turkey and Bulgaria. This is considered the largest overseas operation of the PLA with these home-built aerial giants. It is a demonstration of China’s strategic transport capacity and global power, an impressive novelty in Europe, against the background of the war in Ukraine.
In the framework of Air Silk Road initiative in the Western Balkans China takes a pragmatic and practical approach: withdrawing investments in critical infrastructure from Albania, a NATO member country that hosted the region’s first NATO airbase, while affords an impressive military transport air operation in China-friendly Serbia. However, this non-confrontational approach is only tactical in Beijing’s overall offensive policy in Europe.
