Investment Bridge Between Romanian and China
People are worried about the Middle East, Iran, North Korea or the evolutions in the conflict between Russia and Ukraine, but the biggest challenge of our times is none of the above, it is China’s rise and its way of managing this global power peacefully.’ This was a statement made a few months ago by American economist Nouriel Roubini, who warned that China would soon be the biggest economic power on the planet, its political power will grow, and its territorial disputes with other countries will be something to fear.
România Internațional, 14.11.2014, 14:48
People are worried about the Middle East, Iran, North Korea or the evolutions in the conflict between Russia and Ukraine, but the biggest challenge of our times is none of the above, it is China’s rise and its way of managing this global power peacefully.’ This was a statement made a few months ago by American economist Nouriel Roubini, who warned that China would soon be the biggest economic power on the planet, its political power will grow, and its territorial disputes with other countries will be something to fear.
In spite of the world economic crisis, China has managed to have large annual growth rates, and to contribute decisively to the US and EU emerging out of the crisis. Roubini’s forecast for this year is 7% economic growth for China, stabilizing in the next couple of years at 6.5%. This being said, it is natural for western countries and Russia to show interest in China. For Russia, China is the main Asian trade partner, with trade worth around 88 billion dollars. For Bucharest, relations with China are long term ones, dating back to the communist period and consolidated in the last decade through a friendship and cooperation agreement.
Bucharest has recently hosted a seminar to look into the opportunities for business between the two countries. The main conclusion of the debates was that Hong Kong would be an excellent platform for European companies that want to get into China, but that solutions should be found for having large corporations there help channel Chinese investments in Romania. According to the Trade Development Council of Hong Kong, the province has trade incentives that could allow maximizing trade, as well as a fair and safe judicial environment, which would be an advantage for Romanian companies.
17 years after rejoining China, on the principle ‘one country, two systems’, the special autonomous region of Hong Kong continues to have a capitalist system, with its own executive and judiciary, but closely monitored by Beijing’s communist rulers. Valentin Brebenel, head of the office for bilateral relations in the Ministry of the Economy, explained to Radio Romania why China is a profitable retail market for Romanian investors:
Valentin Brebenel: “The Chinese market provides many opportunities on account of being the biggest market in the world, given the size of China’s population, and the power of absorption. Moreover, the income of the Chinese population has grown recently, which leads to higher purchasing power, which means Romanian products may be received better. At the same time, there is a certain tradition, and wines are part of this, to which we have returned recently and which has been a successful move, earning us a good position on the market.”
Valentin Brebenel also spoke about the areas of interest for Chinese investors:
“The energy sector is the most attractive area, including all types of electricity production, from fossil fuels to hydro power and nuclear and renewable energy. Sizeable investments based on concrete agreements have already been made, while other projects are in an advanced state of negotiation in these areas. Infrastructure is another attractive area. Chinese investors are very experienced in this field and are interested in taking part in transport infrastructure projects. Agriculture is an equally interesting field for Chinese investors, who want to cooperate with their Romanian partners in agricultural production, either plant growing or animal breeding, and the rehabilitation of land and irrigation systems.”
However, the Hong Kong market is not easily accessible, but a very competitive market, says Valentin Brebenel:
“Hong Kong amasses a lot of capital and financial resources. There are many expert institutions in the field in Hong Kong, so this area is a potential source. Financial, banking and investment institutions in Hong Kong are already involved in operations in Romania. Moreover, Hong Kong may become a gate for the entry of Romanian products because the practices, rules, institutions and the entire business system in Hong Kong are closer to the European tradition and business practice, which may facilitate things for Romanian companies.”
While Hong Kong may provide an easier way of entering the Chinese market, Valentin Brebenel says this is easier said than done.
