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The Warsaw Voice » Business » February 23, 2010
Business & Economy
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China in Poland
February 23, 2010   
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Growing numbers of Chinese companies have been eyeing investment opportunities in Poland, which could become their bridgehead for an expansion drive into EU markets.

Imports of "made in China" products to Poland were worth almost 10 billion euros last year alone. In comparison, Polish exports to China stood at 1 billion euros. The vast majority of Chinese imports to Poland are computers, cell phones, components for TV cameras, mp3 players, dictaphones, modems, other computer parts and accessories, electronic components for audiovisual equipment, digital photo and video cameras and parts for those, and hard disk drives. Of the 10 largest importers of Chinese goods last year, eight were companies importing electronic equipment, one imported lighting devices and one operated in the clothing trade.

There are many indications that in the near future Chinese businesses operating on the Polish market will cease to be associated with the retail sector only. In the past several years, Chinese companies have started to evolve into global players with growing ambitions to invest on a large scale outside China. Backed by increasingly powerful Chinese banks, the companies have been successful in many areas. Asia is the chief destination for the Chinese expansion, but it is closely followed by Europe, the EU in particular. In the EU, Poland stands out with its strong economy and looks certain to become one of the most frequently considered locations for Chinese investment.

"We want to establish strong and long-lasting trade and economic relations with China," Deputy Prime Minister and Economy Minister Waldemar Pawlak said at a meeting with China's Deputy Foreign Minister Zhang Zhijun in Warsaw in early February. Pawlak added that the current volume of trade and investment between Poland and China did not live up to the potential of the two countries. According to Pawlak, Poland and China will get a huge opportunity to establish closer contacts during the Expo 2010 World Exhibition in Shanghai. "This is a perfect opportunity to promote Polish exports to China and for many enterprises it will be the right time to establish business relations," Pawlak said.

During Expo 2010, which will take place from May 1 to Oct. 31, Poland is planning to organize a series of events to promote different sectors of its economy. One of the most interesting projects will promote the maritime economy, aiming to establish a Chinese Center for Transportation and Logistics in the Baltic region. According to Dariusz Wojtaszek of the Expo 2010 team from the Polish Agency for Enterprise Development (PARP), this would be a Poland-based hub for Chinese ships that would also provide services to other ports in Europe. The center could be located in Gdańsk or near Pruszcz Gdański, close to the A-1 freeway. It would be used to distribute East Asian products in the Baltic region and ship them on to central Poland and Europe.

The success of projects like this could dramatically increase the value of Chinese investment in Poland which, so far, is hardly impressive. Chinese businesses carry out projects in Poland by either opening branches of their parent companies or forming joint ventures with Polish companies. To date, Chinese investment in Poland is estimated at just over $200 million. The largest Chinese investors in Poland include the wholesaler GD Poland based in Wólka Kosowska near Warsaw, Min Hoong Development, which trades in real estate in Warsaw and Sopot, TTL Polska-inwestycja TCL Corporation, which produces LCD monitors and TV sets in Żyrardów, and Athletic Group, which produces bicycles in Koszalin.

Major opportunities are opening for Chinese businesses in Poland in planned infrastructure-related projects such as freeways, roads, stadiums and urban construction. A lot of those are connected with the upcoming Euro 2012 European soccer championships that will be held in Poland and Ukraine. One of such example is a tender a Chinese consortium headed by China Overseas Engineering Group Co. Ltd. won last year for the construction of two sections of a freeway from ŁódĽ to Warsaw. But there is much more potential in Poland than infrastructure. "We are looking forward to more joint initiatives with Chinese partners in other areas as well, such as agriculture and mining," said deputy economy minister Rafał Baniak.

China is beyond doubt a good business partner with high potential and China's resources of capital can help strengthen the Polish economy. The extra benefit of working with Chinese companies is that they provide quality service and are fast in carrying out commissioned construction projects. Chinese companies are also highly competitive in terms of price. The Polish government is hoping to successfully conclude negotiations it has been conducting with a number of Chinese companies, mainly in the electronic, machine and chemical sectors. All the companies are interested in direct investment in Poland.

Not all projects planned by Chinese companies in Poland have been successful, however. One spectacular example is the Lenovo computer corporation, which in 2008 announced it would build a new computer factory in Poland and then last year unexpectedly abandoned the plans. The project by the international giant could have become a turning point for Poland by starting a snowball effect of a growing inflow of direct investment from China.

Nevertheless, everything seems to suggest that in the coming years Chinese investment in Poland will soar. The rapid increase will be a result of Poland's strong economic performance which, according to many international institutions, has made Poland one of the best investment locations in the world. Moreover, Poland is the largest beneficiary of EU funds for modernization and investment. Consequently, Poland can offer Chinese companies more advantages than any other country in Europe.

Andrzej Ratajczyk

Concert for 200 Pianos
Polish-Chinese joint initiatives are not confined to business but extend to culture and art as well. One of the most spectacular events of the Year of Chopin will be a concert for 200 pianos, which will be held on a public square in Warsaw. The concert will be performed by young pianists from Poland and China.
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