China set to do deals in Poland and Serbia

China set to do deals in Poland and Serbia

downloadA series of agreements in areas ranging from trade to civil aviation will be on the table during President Xi Jinping’s upcoming visit to Serbia and Poland, diplomats said yesterday.

Central and east European countries are competing for Chinese investment in everything from banking to beer, looking to lure firms in need of new markets while securing a foothold for their own products in China.

Chinese authorities are expected to sign agreements in education, finance and technology, among other fields.

Chinese foreign direct investment to Europe hit a record high last year of around 20 billion euros (US$22.45 billion), a 44 percent annual rise.

Germany, Britain and France accounted for almost half the total, according to a report by Germany’s Mercator Institute for China Studies and the US-based Rhodium Group.

Only snippets of investment went to central and eastern Europe, but as Chinese firms look to diversify, volumes are growing, thanks to deals in infrastructure, energy, finance, real estate and travel.

Chinese firms are finding a warm welcome in central and east Europe.

There is a currency clearing center in Hungary, and Hungary and Serbia have signed a deal with China to build a high-speed railway from Belgrade to Budapest. Hungary has also issued bonds in the yuan.

In April, China’s Hebei Iron and Steel Group signed a deal worth 46 million euros to buy a Serbian steel plant. Also in April, China Everbright Group, a state-backed financial firm, bought into Albania’s international airport.

In Germany, however, there are concerns about losing key expertise to China as a growing number of companies seek to buy German industrial technology.

“This (visit) shows the great importance China’s leaders and government place on the development of China-Europe relations,” said Assistant Foreign Minister Liu Haixing. “We believe this visit will push forward the development of China-European relations to a great extent.”

China has created a “16+1” forum as a way of communicating with multiple central and east European states.

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