Poland

Poland

With the largest economy in Eastern Europe, in the 2000s Poland became a privileged partner for China in the region. In recent years, however, bilateral relations have significantly cooled.

Poland

Background

Poland established diplomatic relations with the People’s Republic of China (PRC) in 1949. Although contacts were limited due to the geographical distance between the two countries, relations were relatively advanced. The PRC, for example, occasionally supported Poland’s attempts to develop a more independent policy within the Soviet bloc, especially when relations between China and the Soviet Union became increasingly complicated in the 1950s and 1960s. According to some historical analyses, Chinese protests and diplomatic intervention were what stopped Soviet military intervention during demonstrations and party struggle in Poland in 1956.

After the collapse of the Soviet bloc, the PRC and Poland grew increasingly distant due to the international embargo imposed on China in the wake of its crackdown on the 1989 democracy movement, and the different foreign policy perspectives and goals of the two governments. In the 1990s, Poland focused its international activities on rejoining the Western political architecture (namely, the European Union and the North Atlantic Treaty Organisation, NATO), as well as managing the transformation into a free market economy. Concurrently, China sought to improve its economic relations with Western Europe after the 1989 embargo was dropped. During those years, high-level political exchanges were also limited; in the 1990s and 2000s, the Polish president visited China only once (in 1995), while the only presidential delegation from China, led by President Hu Jintao, travelled to Poland in 2004.

Circumstances changed after the enlargement of the European Union in 2004 and even more so in the wake of the 2008 Global Financial Crisis, which led China to focus its attention more on Central and Eastern Europe (CEE). The Chinese authorities believed the new situation represented a great opportunity not only to enhance economic relations with the region, but also to use its advantages in terms of finance and infrastructure development as leverage when dealing with the European Union as a whole. Since Poland was the biggest actor in CEE in terms of the size of the economy, gross domestic product growth, population, and so on, it became a privileged partner for China in the region.

In December 2011, Polish President Bronisław Komorowski (in office from 2010 to 2015) paid an official visit to China, during which the two countries established a strategic partnership. In 2012, Premier Wen Jiabao travelled to Warsaw for an official visit, during which he also had a meeting with the leaders of other CEE countries and announced China’s ‘12 Measures for Promoting Friendly Cooperation with Central and Eastern European Countries’. These measures were grounded in China’s ‘South–South cooperation’ approach and included forms of financial and academic cooperation like those China had adopted in parts of the Global South—in particular, Africa. The document laid the foundations for the establishment of the ‘16+1’ initiative (renamed ‘17+1’ after Greece joined in 2019)—a new Chinese foreign policy instrument specifically targeting the CEE countries, in which Poland played an active role.

The establishment of the strategic partnership and the ‘16+1’ initiative started an intense period of political exchanges between Poland and China both bilaterally and multilaterally (mostly within the ‘16+1’ framework). Relations peaked in 2015 and 2016, at least in terms of the number of meetings, if not in substantial results coming from the cooperation. First, in November 2015, Polish President Andrzej Duda (in office since 2015) visited China to attend a ‘16+1’ summit in Suzhou; then, in June 2016, President Xi Jinping visited Poland and announced the upgrading of bilateral relations to the level of a comprehensive strategic partnership.

BRI Status

While not losing sight of its EU obligations in terms of transparency and environmental protection, Poland welcomed the Belt and Road Initiative (BRI) from the beginning. The BRI was introduced as another pillar of the cooperation in the ‘17+1’ initiative. During President Duda’s visit to China in November 2015, Poland signed a memorandum of understanding on the BRI, making it the second CEE country, after Hungary, to do so. In 2015, it signed up to the Asian Infrastructure Investment Bank (AIIB) as the only founding CEE member, ratifying its membership in 2016. These moves, however, did not result in any significant new Chinese-backed projects in the country. With a lot of political capital already invested in furthering bilateral relations, the Polish authorities decided to send a high-level delegation chaired by then Prime Minister Beata Szydło (in office from 2015 to 2017) to the first Belt and Road Forum for International Cooperation in 2017.

Since then, as the Chinese political scene changed significantly both domestically, with Xi Jinping’s centralisation of power, and externally, with a drop in foreign investment and state-backed project finance, bilateral relations have cooled. This downward trend was exemplified by the fact the Polish Government sent a very low-level (mostly technical, not political) delegation to the second BRI forum in 2019. According to the author’s interviews with Polish officials, Polish authorities believe that the number and quality of bilateral interactions are downgraded as a result of the ‘17+1’ initiative and the BRI, to the detriment of Poland’s national interests. This shift was also influenced by the changing attitudes of the United States and the European Union towards China at the turn of the decade.

Current Economic Relations

Trade: Although the general value of bilateral trade is not that high compared with other EU member states, the trade volume is still growing. While 2020 was a record year for bilateral trade, Poland’s trade deficit also reached record highs: Poland’s imports from China were valued at around 27 billion USD, while exports were only 4 billion USD. In 2019, the PRC was Poland’s second-largest trading partner (after Germany), accounting for slightly more than 13% of Poland’s total imports and 1% of total exports. Polish exports to the PRC include copper, food products, machinery, and electrical appliances, while Poland imports machinery, electrical appliances, textiles, and manufactured goods from the PRC.

Investment: According to data collected by the Rhodium Group,Poland was one of the leading destinations for Chinese investment in the European Union (closely following Germany and France) in 2020, even though the European Union in that year recorded the lowest inflow of investment from China since 2013. Inflows in that year increased dramatically in terms of total value (by about 1 billion USD), but not in terms of the number of transactions. Poland’s official statistics record foreign direct investment (FDI) flows from China of 90 million USD in 2019, with FDI stock reaching 1.2 billion USD. However, Chinese official statistics show FDI stock of just 556 million USD by 2019. In 2020, there were two major Chinese-invested logistics projects in Poland: an investment of more than 1 billion USD by GLP, a Chinese-controlled investment company, in Goodman Group, with 800 million USD allocated in Poland; and investment company CGL’s acquisition of two Amazon logistics centres in Poland. Most Chinese FDI in Poland has taken the form of mergers and acquisitions, while greenfield investments are relatively few, including Guotai-Huarong’s 45-million-USD investment to build an electric car battery factory and another recently announced investment of 30 million EUR by Tuopu, a producer of electric car components. Poland and China signed a Bilateral Investment Treaty in 1988, which will remain valid until the ratification of the Comprehensive Agreement on Investment (CAI) between China and the European Union that is awaiting ratification by the European Parliament. Poland, however, remains openly critical of the deal negotiated by the European Commission, saying it was finalised too early, without serious commitments from the Chinese side, and is harmful to EU–US cooperation on China.

Source: Chinese Ministry of Commerce.

Aid: China does not provide Poland with any formal aid and there is no cooperation on aid projects. In 2020, however, China provided Poland with medical supplies during the first phase of the COVID-19 pandemic. There has been further cooperation around the COVID-19 response, although this was commercial and not aid. However, no official statistics are available on the value of this cooperation. A request made by President Duda to President Xi during a phone call on 1 March 2021 prompted discussions between the Polish and Chinese authorities about Poland’s possible purchase of Chinese vaccines. The transaction, however, did not materialise due to doubts on the Polish side about the effectiveness of Chinese vaccines.

Key Controversies

Economically,Poland’s huge trade deficit with China and the lack of reciprocity in terms of market access for Polish companies and products are major controversies. However, the problem of the trade deficit is often exaggerated or oversimplified due to a lack of understanding of global value and production chains. In Poland’s case, many companies in the production chains serve as subcontractors and suppliers for foreign companies which then export to China. For instance, they may be supplying German companies, whose exports are classified as coming from Germany rather than Poland.

Politically, Poland shares the concerns of the European Union on matters related to cybersecurity and technology transfers, as well as the US perception of China’s attempts to modify the current international governance system to its benefit. Although the Polish Government has not been very vocal, it also perceives China’s policy towards the Uyghurs, its actions in Hong Kong, and its human rights regime in general as incompatible with Western values and often in violation of international laws and regulations. Poland has joined all the European Union’s initiatives on human rights issues in China as well as most of the United Nations’ statements related to Xinjiang. Therefore, while it does not seem that Poland wants to be at the forefront of the critique of China, the country has demonstrated a willingness to support multilateral efforts within the European Union and the international community.

For historical and geopolitical reasons, the advanced cooperation between China and Russia—symbolised by joint maritime drills on the Baltic Sea in 2017—has prompted concern both in government circles and in public debate. This is mainly because China is perceived to be a supporter of Russian policy towards Belarus, Ukraine, and Baltic states. This perception was recently strengthened by the derogatory and aggressive tone of coverage by nationalistic Chinese media of Lithuania’s decision to withdraw from the 17+1 initiative, as well as of the hijacking of a Ryanair plane by Belarusian authorities.

Key Sources

Institutions:

Poland has a growing community of experts researching China and its politics and international relations, based at institutions such as the Centre for Eastern Studies, the Polish Institute of International Affairs, and the War Studies University and Centre for Asian Affairs at Lodz University.

Reports and Articles:

Jakóbowski, Jakub. 2020. ‘Chinese Medical Equipment Supplies to Europe.’ Centre for Eastern Studies website, 20 March. Link.

Przychodniak, Marcin. 2021. A strategic partner of China or United States accomplice? Poland in the view of Chinese authorities and experts. Policy Paper. Warsaw: Polish Institute of International Affairs. Link.

Skorupska, Adriana and Justyna Szczudlik (eds). 2019. The Subnational Dimension of EU–China Relations. Warsaw: Polish Institute of International Affairs. Link.

Cover Photo: Wolin, Zachodniopomorskie, Polska, by Mal B (CC).

Updated on 24 July 2021.


Marcin Przychodniak works as a China analyst in the Asia and Pacific Program at the Polish Institute of International Affairs. He obtained his PhD in Political Science in 2012 at the University of Warsaw. In 2005, he graduated in political science from Adam Mickiewicz University in Poznań. Between 2012 and 2016, he worked as a diplomat at the Polish Embassy in Beijing.