Neo-mercantilism in action: China and small states

Abstract

This study investigates the relations between the People’s Republic of China and seven small European states with particular reference to China’s Belt and Road Initiative. It highlights the gap between the rhetoric of economic liberalism and the realities of neo-mercantilism with Chinese characteristics. The article analyses China’s geopolitical strategy and its support of infrastructural projects abroad in relation to the “China Dream” as articulated by Xi Jinping. The impact of engaging with a more assertive China for smaller countries is examined. The article concludes that, increasingly, there is a distinction in the EU between liberal and illiberal democracies. China’s preference for bilateral relations with countries on the BRI is informed by its broader geopolitical aims that resonate well with the neo-mercantilist model. The impact of China’s stance seems to be more muted in the more democratic small nations and more pronounced in autocracies.