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Visits revitalize traditional friendship with East Europe

Visits revitalize traditional friendship with East Europe

Updated: 2012-04-26 08:11

By Andrew Moody (China Daily)

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Robust trade and investment ties between Central and Eastern Europe and China are renewing traditional friendships China built with this region many years ago.

Trade between Central and Eastern Europe and China now stands at more than 10 times the level in 2001 and has grown at an annual average rate of 32 percent over the past 10 years.

In 2010 alone, trade increased by 34.1 percent to $41.1 billion, according to figures from the Ministry of Commerce.

The trade relationship between China and Central and Eastern Europe came into focus in June when Premier Wen Jiabao visited Hungary, where he announced $539 million in financial support for a European logistics base, which would be a hub for Chinese goods entering Europe.

Less than a year later, Wen is visiting the region again. Experts expect the trip to inject new vitality into the long-standing friendship and new trade relationship.

Countries in Central and Eastern Europe now enjoy very close investment and trade ties with China. For example, Chinese foreign direct investment in Hungary was $370 million in 2010, up from just $400,000 in 2004, according to the Ministry of Commerce.

BYD Automobile, a major battery and electric auto manufacturer in China, has a major battery plant in Hungary.

Other major Chinese investments in the region include a new factory in Bulgaria, where it will assemble 50,000 cars a year.

Peter Hyl, executive chairman of the China Investment Forum, said the economies of China and Central and Eastern Europe have much in common, as they are both suppliers of goods and services to Western markets.

"China can be characterized as a manufacturing base supplying Western economies and that is the same with large parts of Central and Eastern Europe. The structure of the economies is very similar," he said.

Companies in Central and Eastern Europe are also making major investments in China. Skoda Auto, one of the Czech Republic's most iconic brands, began manufacturing cars in Shanghai in 2007 and expects to produce more than 200,000 this year.

PPF Group, the largest financial and investment company in Central and Eastern Europe, whose majority shareholder is Czech billionaire Petr Kellner, is making big inroads into China's consumer finance market with its Home Credit brand.

Miranda Carr, head of research at London-based China Policy Research, an investment research company, said the Chinese often feel more comfortable dealing with companies from Central and Eastern Europe.

She said they are often more cooperative in their approach and less likely to give lectures on how to conduct business than their US and Western European counterparts.

Zheng Yangpeng contributed to this story.

andrewmoody@chinadaily.com.cn

(China Daily 04/26/2012 page3)

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