Albania Is a New Belt and Road Battleground

TIRANA, Albania—When it comes to Albania, the United States seems to be shifting from indifferent to involved in light of China’s increased footprint in the region. The greater U.S. engagement with the small Balkan nation highlights the emergence of another potential collision point between China’s geoeconomic ambitions in the region and the growing, if belated, Western efforts to push back.

While most Balkan countries have been hungry recipients of Chinese money, Albania has been an outlier, choosing to selectively engage with Beijing. While there are about 120 Chinese-linked projects worth almost $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.

Washington has responded favorably by boosting investment and military ties. In early January, U.S. Special Operations Command Europe announced it was establishing a forward base in Albania on a rotational basis. This came just months after the country hosted the Defender Europe 21 military exercises, the largest operation in southeastern Europe since World War II. And U.S. investment, while still paltry, is growing fast. According to the Albanian Central Bank, American foreign direct investment increased by 48 percent in the third quarter of 2020 compared to the same period in 2019, reaching around $140 million.

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.

In late 2020, U.S. and Albanian officials signed a memorandum of understanding on economic cooperation in Tirana, Albania’s capital, during a visit by Keith Krach, the U.S. undersecretary of state for economic growth at the time. The move paved the way for U.S. investment in the Skavica hydropower project and the Vlora thermal power station, a symbolic step in countering Chinese interests in the country, whose biggest project is Geo-Jade Petroleum’s concession to extract oil at the Patos-Marinza field, the biggest onshore oil field in Europe.

Despite Albania’s tilt toward the West, China is not deterred. In late October 2021, Chinese Foreign Minister Wang Yi visited Albania on his way to the G-20 summit in Rome. In recent years, Beijing has welcomed the increase in trade; the country is Albania’s third-largest source of imports after Italy and Turkey. Albania’s Adriatic coast is also of interest for expansion of China’s Belt and Road Initiative, which has put a special emphasis on southeastern Europe as a gateway to the Mediterranean. 

China had cobbled together a loose coalition of Central and Eastern European countries—known as the 16+1—that cooperated with Beijing’s Belt and Road. But with countries such as the Czech Republic and Slovakia beginning to tire of Beijing’s onerous investments, then irking Beijing with shows of support for Taiwan, and with Lithuania pulling out of the grouping in May 2021, keeping strategic partners like Albania onside is key for Beijing.

“Albania has a symbolic value for China, and the country is one of the most interesting in the region due to its historic ties to China and its alignment with the ‘One China’ policy,” said Stefan Vladisavljev, program coordinator at the Foundation BFPE for a Responsible Society, a Serbian think tank. “On the other hand, it’s a NATO member and is dedicated to EU membership, which puts the overall strategic orientation of Albanian foreign policy toward the West.” 

The United States and Europe are making a belated effort to put their thumbs on that scale. Both Washington and Brussels have come up with economic development plans meant to blunt, at least partially, Chinese inroads through the Belt and Road, and both have paid at least lip service to investing more in the Western Balkans. But there are sticks as well as carrots.

Like many Balkan countries, Albania is getting ready for European Union membership, despite enlargement being continually sidestepped by Brussels. Should that approach continue, a larger vacuum for Chinese influence will be created.

“Beijing is seen as a credible source of funding for economic development by some governments in the Western Balkans,” said Valbona Zeneli, the chair of strategic initiatives at the George C. Marshall Center. To nudge Balkan countries in the right direction, she said, the EU should link enlargement and Chinese largesse. 

“To promote positive development, the EU needs to establish specific conditions that address investment deals with China as part of its enlargement policy,” including greater transparency and screening mechanisms for inbound investment, she said.

For now, Albania’s willingness to limit Chinese investments and juggle Brussels, Beijing, and Washington gives the country a rare opportunity to be a regional power broker. Serbia is China’s main partner in the Western Balkans, with investments, mostly in the form of loans, amounting to approximately $8 billion. Neighboring North Macedonia has also received Chinese loans, and most famously Montenegro drove itself into serious debt after taking an almost $1 billion loan from China’s Export-Import Bank to construct a highway. To the south, in Greece, China’s Cosco shipping company controls the port of Piraeus—Europe’s fourth-biggest container port—a move that has sparked much hand-wringing in Brussels. 

By courting all the key players, Albania could potentially be a trailblazer for smaller nations caught in the crosshairs of the West’s face-off with Beijing.