China eyes expanded business ties with Eastern Europe amid EU concerns

By Tsvetelia Tsolova

SOFIA, July 7 (Reuters) - Chinese Premier Li Keqiang will offer the leaders of central and eastern Europe on Saturday expanded business ties at a summit in Sofia while seeking to reassure the EU that Beijing is not trying to divide the continent.

Li, whose attendance at the seventh such "16+1" summit coincides with an escalating trade war between China and the United States, will also try to dispel growing doubts among some participants about the value of the annual meetings.

China has promised billions for development projects in the region as part of its Belt and Road strategy to carve out new export markets, but these deals are coming under greater scrutiny.

Li, whose country needs the European Union's support in its trade battles with U.S. President Donald Trump, has been careful to stress China's support for European integration and rules in trade and procurement.

"The 16+1 cooperation is by no means a geo-political platform. Some may say such cooperation may separate the EU, but this is not true," Li told a joint news conference on Friday with the summit host, Bulgarian Prime Minister Boyko Borissov.

"We hope that through our cooperation we will improve the development of all countries involved and help them better integrate into the European integration's process," said Li, who will travel on to Germany from Bulgaria after the summit.

Analysts said Li would try to avoid issues that might annoy western European capitals, including the European Commission in Brussels that upholds the common rules that underpin the EU's single market.

"I think that Premier Li Keqiang will adopt a low profile on issues that might infringe on community affairs of the EU this time around," said Francois Godement, director of Asia and China programme at the European Council on Foreign Relations.

More than 250 Chinese companies and 700 business people from central and eastern Europe are expected to attend an economic forum alongside the summit, seeking deals in trade, technology, infrastructure, agriculture and tourism.

TRANSPORT DEALS

Bulgaria hopes the summit will help secure much-needed funds to build new roads, highways and other infrastructure in eastern Europe, a region that still lags richer states in the western wing of the EU in terms of development and income.

"We do not aim to divide the European Union. On the contrary, we aim to help eastern Europe and the Balkans which are lagging behind to catch up," Borissov said.

Sofia hopes to lure Chinese funds for highway and railway projects to link ports in northern Greece on the Aegean Sea and in Bulgaria on the Black Sea with Romania and Serbia.

China has expressed interest in the plan and also confirmed it was willing to back Bulgaria's Belene nuclear power project.

Last month, Hungary finalised the construction timetable with China for a Budapest-Belgrade rail link, one of the biggest Chinese-backed infrastructure projects in the region.

Countries taking part include EU members Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia, and also non-EU states Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia.

The EU will have observer status at the summit. Greece will also attend. ($1 = 1.6729 leva) (Additional reporting by Angel Krassimirov Editing by Gareth Jones)

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