Chinese Prime Minister Li Keqiang arrived in Romania yesterday ahead of a summit with 16 Central and Eastern European leaders keen to woo investment from the world’s number two economy.
The trip, the first by a Chinese premier to Romania in 19 years, sees Li accompanied by the heads of more than 200 Chinese major public and private companies.
Today he will attend the Bucharest summit that “will be an opportunity for countries in the region to find out what the Chinese are after,” the head of the Romanian-Chinese Trade Chamber Gabriel Ghelmegeanu said.
The gathering comes days after China and the European Union began talks in Beijing on a landmark agreement aimed at increasing two-way investment flows.
Hundreds of Eastern European businessmen will vie for Chinese attention – and money – showcasing energy, transportation or agriculture projects lingering for lack of funds.
“Developing a partnership with Central and Eastern Europe (CEE) is a logical option for China, first of all because it gives it access to major sea ports such as Constanta (Romania) and Burgas (Bulgaria) as a safeway for its exports,” economic analyst Razvan Orasanu said. “Moreover, the countries in the region register high growth rates while regulations in terms of labour or visas are less strict” than in Western Europe, he added.
In the early 2000s, Chinese investment in the region was almost inexistent. In 2010 it topped $800mn, according to the Warsaw-based Central and Eastern European Development Institute (CEED).
Two-way trade between China and the region has also grown rapidly. While it amounted to $3.0bn in 2000, it surpassed $41bn in 2010, with China registering a net surplus.
Following the eurozone crisis, the CEE countries with their “hybrid economies, somewhere between emerging and developed markets… appear as more dynamic places to put Chinese money into,” the CEED said.
Yet past experience in the region provides a measure of caution for those hoping for quick results.
In April 2012, Li’s predecessor Wen Jiabao told 16 CEE leaders attending a summit in Poland that China would commit a total of $10.5bn in credit lines and funds to boost economic ties with the region.
But analysts say that 18 months later the promise of massive Chinese capital injections into the former communist bloc has yet to materialise.
The China-CEE Investment Cooperation Fund (ICF) has not made any headway and prospects are unclear.