The Role, Interdependencies, and Flows of Added Value Between Central and Eastern Europe, Germany, and China

Abstract

Abstract:Central and Eastern Europe (CEE), Germany, and China have become close partners, especially in terms of trade and capital flows. The establishment of the EU-China Comprehensive Agreement on Investment (CAI) has proved to be an indispensable element that will provide the framework for future trade and investment cooperation. Unfortunately, the ratification of the agreement is hampered by the low protection level of the economic interests of the Central and Eastern Europe countries. They had little influence on the final shape of the agreement. Hence there are many doubts about their role in EU-China relations, especially in high-tech production connections. This type of link turns out to be important in the era of introducing economies into the Fourth Industrial Revolution (4IR). Thus, to understand the role, interdependencies, and flows of added value between the closely related economies—that is, China, Germany, and the CEE region—this study asks, “With the intensification of CEE-China relations, have CEE economies become more involved in technological production links with China at the expense of withdrawing from regional linkages?”