Thursday, 6 June 2019

More Croatian Products Eyeing Up Potential Placement on Chinese Market

Foreign trade chains operating here in Croatia are increasingly promoting Croatian products and businesses, as well as on other markets on which they operate.

As Poslovni Dnevnik/VLM writes on the 6th of June, 2019, last year, large, medium and small Croatian producers exported their products through Spar Croatia to Austria, Hungary, Slovenia and Italy in the amount of 68 million euros, or more than half a billion kuna, and some of them now appear to be eyeing up a far more distant market - the Chinese one.

Spar's hypermarkets in Rijeka, Zagreb and Zadar were visited by a high delegation consisting of some of the leading people of Spar China, from five Chinese provinces, as well as the president of the China's trade and franchise association, Guo Geping.

The products of selected Croatian suppliers such as Vindija, Kraš, Gavrilović, Dukat, Podravka, Badel and others were looked into and considered as being potentially good to export to the Chinese market. Spar is currently present in seven Chinese provinces with more than 350 stores, with an impressive annual turnover of more than 1.5 billion euros.

However, although intensifying cooperation on exports of foodstuffs from Croatia can be expected, this mostly covers pork and processed products, such poultry and fish, Croatia ad China have signed a protocol on the possibility of exporting milk and dairy products from Croatia to China, after the approval of veterinary certificates.

However, previous experience suggests that Croatian producers, small ones operating within the EU or indeed worldwide, find it much easier to ''penetrate'' the world through Croatian or other leading retail chains already operating on particular markets.

''Trade chains such as Spar, Kaufland and Lidl already enjoy good business cooperation with our manufacturers in Croatia. And of course, it's much easier to transfer these relationships to the other markets where they operate,'' said Ante Madir of the Croatian prosciutto cluster.

He pointed out the fact that it's even better to have Croatian ham and other types of cured meats have a chance of promotion in stores and at leading fairs in other countries such as the Parisian SIAL or Berlin's Grüne Woche.

As business relations between Croatia and China continue to grow stronger, perhaps many of Croatia's best loved domestic products asife from dairy, from Kraš and Gavrilović to Podravka, might find themselves sitting proudly on the shelves of well known chain stores in China.

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Thursday, 2 May 2019

Chinese Interested in Croatian Shipyards, With One Condition...

The Chinese interest in Croatian projects is continually growing, or so it seems, and there is now room to dare when it comes to the potential Chinese rescue of Uljanik and 3 Maj at the eleventh hour.

As Marija Brnic/Poslovni Dnevnik writes on the 2nd of May, 2019, the Chinese CSIC representatives currently visiting Croatia to see the state of Croatia's ailing Uljanik (Pula) and 3 Maj (Rijeka) shipyards have expressed clear interested in new projects with Croatia's shipyards, but only if the Croatian state covers the cost of what has already failed, there have also been mentions of the diversification of production, but they don't want guarantees.

If there is an agreement between the Croatian Government and the Chinese CSIC about reviving Uljanik and 3 Maj, it will be done so with regard to a combination of the models which were discussed with the previous two strategic partners, Darko Končar and Tomislav Debeljak.

According to the explanation given by Minister of Economy Darko Horvat after the final talks and the three-day visit of CSIC's representatives, the Chinese are indeed interested in starting with new projects, while the state should cover the cost of old, failed projects, meaning it will need to take place on a clean slate. It's also more than likely that the sites of today's Croatian shipyards will see other projects developed there, that is to say, the diversification of activities will occur.

"If they don't see the possibility of continuity of shipbuilding at this time, we want other industries to take place here, and not just those exclusively involved in shipbuilding," Minister Horvat stated. Therefore, unlike Danko Končar's initial idea, Chinese diversification would not be a real-estate business, but would involve some sort of other, new production aside from shipbuilding. And the clean starting position the Chinese have indicated that they want, which is similar to what Tomislav Debeljak sought but is unlike his idea, almost certainly means declaring the bankruptcy of the two shipyards.

"We don't expect them to finance failed attempts to build ships that haven't been completed. The starting position means new projects,'' stated Horvat in reference to the wishes of the Chinese.

The continuation of construction in Pula and Rijeka in partnership with CSIC would in any case have a completely different financing philosophy. The Chinese say, after the talks, that they are completely astonished at the reliance of state guarantees for shipbuilding. To repeat what Finance Minister Zdravko Marić stated recently, it's much too early to talk about exactly what changes might occur in this context following their entry into Uljanik and 3 Maj. Over the next few weeks, CSIC's senior people will analyse the collected information and determine whether or not, and indeed in what form they're interested in entering into the structures of Croatia's enfeebled shipyards.

At this moment in time, Darko Horvat has merely announced that any form of Chinese entry would involve a new way of financing, with different sources, a different way of drafting project documentation, and would involve no state guarantees. After the final talks at Zagreb Airport, Horvat didn't provide any more specific information, nor the deadlines within which he expected to receive feedback from the Chinese, but he did appear to try to leave the impression that he was optimistic about the whole situation. The Chinese representatives themselves, however, didn't give any media statements.

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Click here for the original article by Marija Brnic for Poslovni Dnevnik

Wednesday, 1 May 2019

Marić on Potential Chinese Investment: Too Early to Talk About Anything

As Poslovni Dnevnik writes on the 30th of April, 2019, Croatian Finance Minister Zdravko Marić said on Tuesday that he still needs to see if there really is specific interest from the Chinese shipbuilding company, whose representatives are visiting the ailing shipyards in Pula (Uljanik) and Rijeka (3 Maj), saying that it's too early to be able to say anything and that we "need to be completely realistic".

When aked by a journalist about the expectations of the Croatian Government, given that a delegation from the Chinese shipbuilding company China Shipbuilding Industry Corporation (CSIC) has visited the Uljanik and 3 Maj shipyards, Marić said that first of all, we should be realistic and after CISC's representatives get a proper look at the state of affairs with those shipyards and answers to the questions they are interested in, we will need to wait and see what their response to all of it will be.

At this point, it's still too early for that, he added, recalling yesterday's introductory meeting between the Croatian prime minister, his ministers and the aforementioned Chinese delegation at Banski Dvori in Zagreb, where everything was transparent and very clearly presented.

"A really high level team from the perspective of that company has arrived, but on the other hand, we need to be completely realistic. So, today they will spend all day in both Rijeka and Pula and then after that, of course, we can't expect it immediately but within a reasonable time frame, they'll determine what they saw, state what they think about it, and whether or not there is a certain level of interest,'' said Marić when answering journalists' questions after attending the annual European Investment Bank (EIB) press conference.

The CSIC delegation, headed by Hu Wenming, arrived at the enfeebled Uljanik on Tuesday morning, where talks with the members of Uljanik's management board and its supervisory board took place. Assistant Minister of Economy Zvonimir Novak has also been participating in these talks.

Several representatives of the aforementioned Chinese company arrived at Uljanik as early as Monday afternoon, where they viewed the plants and made an unofficial assessment of the capabilities of the Pula shipyard's production facilities, ie, they got better acquainted with its technical capabilities, the processes that take place there, the technology and its general capacities.

What will coe of the visit is anyone's guess so far, but despite suspicion from some, an injection of Chinese money could truly be Uljanik's very last hope.

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Tuesday, 30 April 2019

Is Chinese Rescue of Croatia's Burdened Shipyards Inevitable?

If the China Shipbuilding Industry Corporation (CSIC) gives up, it will be difficult to find another candidate for the ailing Croatian shipyards Uljanik (Pula) and 3 Maj (Rijeka) which is in the shipbuilding industry and is also a strong and respected player. Could a Chinese investment be on the cards?

As Poslovni Dnevnik/Suzana Varosanec writes on the 29th of April, 2019, after yesterday's meeting with Prime Minister Andrey Plenkovic and his government ministers, Hu Wenming, Chairman of the Board of China's largest shipbuilding company China Shipbuilding Industry Corporation (CSIC) confirmed that they are indeed moving towards serious consideration regarding the enfeebled Uljanik and 3 Maj shipyards, which have undergone months of turmoil.

''The prime minister gave us a very serious and detailed presentation of the whole situation,'' Wenming said, adding that they saw that these two shipyards were a very important topic for the Croatian public. "Not only did we bring people from our company - they're in charge of planning, we've already called on lawyers and investment banks, so we will outline what their views on the matter are after visiting the shipyards," Wenming stated.

With that, a key ''tour'' begins, because if CSIC ends up actually not being interested in putting its money into the situation, it will be a hugely difficult task to find another candidate in shipbuilding, which is a big player and has an interest in joining the European shipbuilding industry. Otherwise, this would be the first case of a Chinese takeover of a foreign shipbuilding company, so it is speculated that extensive calculations are being made, and of course whether they even want to have their first European shipyard is being considered. The CSIC is looking at the situation deeply and from all possible angles.

This event all began with the recent announcement of the arrival of the CSIC in Croatia with the aim of visiting the troubled shipyards in Pula and Rijeka. As was then announced, the CSIC chairman contacted Chinese Prime Minister Li Keqiang during his stay in the Republic of Croatia where he attended the summit "16 + 1" and after talking with the Croatian PM about the dire state of Croatian shipbuilding.

As things currently stand, the general belief is that the Chinese decision won't take long to come - it will be a simple and express "no" or "yes", while the third option, more specifically an unconditional "yes", will likely need to be waited for a little longer.

What the outcome of the potential Chinese presence in the Croatian shipbuilding industry is anyone's guess, and while some remain very suspicious of Chinese motives in Croatia in general, despite them already working on the long-awaited Pelješac bridge down in southern Dalmatia, whatever comes of their potential entry has got to be better than the current situation, especially for Uljanik.

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Click here for the original article by Suzana Varosanec for Poslovni Dnevnik

Monday, 29 April 2019

Will Chinese Invest in Croatian Shipyards? Could Uljanik Rescue Happen?

There has been much talk, both positive and negative, about the potential for Chinese investment in Croatia. They're already building the long awaited Peljesac bridge down in Dalmatia and have since expressed great interest in the Port of Rijeka and in constructing a railway line linking Rijeka to Karlovac. 

Many believe that the apparently huge interest of the Chinese (and their money) is a bad omen, and that Croatia will end up trapped by yet more debt it can't pay off in the end. Others see it as a welcome move, despite their suspicions. Whatever the truth behind China's interest in Croatia is, the EU aren't too pleased with it, especially in the case of Peljesac bridge. Peljesac bridge is one of the most important strategic projects in the history of the country, and it has been financed mainly by European Union funds, the fact that a Chinese company has been chosen to construct it hasn't filled the European Union, nor the Commission, with much joy.

What will be the situation with one of Croatia's most pressing issues of late, its ailing shipyards? As Uljanik's dire situation continues to worsen, could the already suggested investment from China be its saviour at the eleventh hour? Maybe.

As Poslovni Dnevnik writes on the 29th of April, 2019, a delegation from China's largest shipbuilding company, China Shipbuilding Industry Corporation, headed by Hu Wenming, the head of the company, will arrive in Zagreb on Monday, as N1 reports.

The Chinese delegation will first be welcomed by Prime Minister Andrej Plenkovic and his government ministers at Banski dvori in the heart of the capital city. After exchanging all of the usual diplomatic pleasantries, they will discuss the burdensome issue of Uljanik (Pula) and 3 Maj (Rijeka), which the Chinese guests will visit on Tuesday.

At today's meeting between the Croatian premier and the Chinese delegation from CSIC, the bosses of Uljanik and 3 Maj, Emil Bulić and Edi Kučan, will present, as was confirmed to N1 by the Croatian Government.

Will the giant Chinese company actually agree to invest in Croatia's ailing shipyards, however? The answer to this question could be known definitively in as little as ten days, Economy Minister Darko Horvat announced last week.

Concerning the potential interest of the Chinese for the Uljanik and 3 Maj shipyards, Minister Tolušić said that this really is "probably the last chance to do something." If there is any possibility whatsoever that the Chinese will enter into some sort of investment arrangement to rescue the shipyards, they'll enter. If there's no possibility, they won't. We'll leave it up to them.'' stated Horvat.

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Friday, 26 April 2019

Darko Horvat Discusses Prospect of Chinese Investment in Uljanik

Next week, a delegation of eighteen people from the largest Chinese shipyard, the China Shipbuilding Industry Corporation, are set to visit Croatia's ailing Uljanik.

As Poslovni Dnevnik writes on the 26th of April, 2019, this is the second day is the National Economy and Entrepreneurship Consulting conference, organised by the Ministry of Economy and Entrepreneurship in Vodice. Economy Minister Darko Horvat told N1 televizija that the Republic of Croatia ''wants to become a country of investment and development, even if it isn't there yet".

"What I do dare to say, and with full certainty, is that Croatia has an innovative network, we have to make every effort to create positive trends, but we can't expect a big boom in just one or two intensive years, but the trends are changing. What makes me happy is that our own accumulation which has been earned by entrepreneurs is slowly returning back into circulation, that this money is no longer sitting in banks, in accounts. This gives us the encouragement that we'll gain that momentum this year, too,'' Darko Horvat stated.

How much have the problems with Uljanik slowed the economy down?

"They stopped any acceleration. Given the fact that so far, we've spent nearly three and a half billion kuna on guarantees,'' Horvat said.

The Dredging and Maritime Management company, owned by the Jan De Nul Group, requires Uljanik to refund all advance payments plus interest on a dredger which is being built in the Pula shipyard, whereby a refund of part of the advance has been secured by state guarantees. Such an outcome could cost the Croatian state almost one billion kuna.

"The contracted period is seven days, but I'm not sure that will happen in that time because Uljanik has no liquid funds and we'll have to continue talks and negotiations with Jan De Nul. And Mr. De Nul is aware that these talks end up going nowhere if he decides on the forcible charging of advances, he's aware that the shipyard in Pula isn't ready to complete that vessel. 

If the Chinese do decide to invest in Uljanik, then there are two variants, Horvat said: "to enter as a strategic partner, or to buy one shipyard, and the other, and become the 100 percent owners."

The court decision in Pazin has, for the third time, postponed the bankruptcy hearing for Uljanik. 

"Regardless of the court's decision, we'll continue talking with the Chinese," Horvat said.

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Monday, 22 April 2019

Is Croatia Really That Important on Chinese Investment Map?

Just how important is Croatia on the Chinese investment map?

As Iva Grubisa/Novac writes on the 21st of April, 2019 China's investment in European Union countries has grown steadily over the past ten years, and the European Commission (EC) has recently referred quite openly to the Chinese as a "systemic rival" and "a strategic competitor," the BBC reports.

The European Union has thus introduced a new mechanism for the strict overseeing of foreign investment, in order to promptly react should they assess that foreign investment could harm the security of EU member states.

According to the EC's report, a third of total EU assets are in the hands of foreign companies and 9.5 percent of companies in the EU have owners based in China, Hong Kong or Macau. When compared with 2007, when this share was only 2.5 percent, it's a significant increase, although the share of European business in Chinese hands is still relatively small. By comparison, back at the end of 2016, 29 percent of EU companies were controlled by Americans and Canadians.

Chinese investment in Europe reached its peak back in 2016, when it amounted to an enormous 37.2 billion euros, followed by a visible slowdown.

"This is mainly a result of stricter control over Chinese capital, but also changes in the global political climate when it comes to China's investments,'' explained Agatha Kratz of the Rhodium Group for the BBC.

Just where are the Chinese investing the most? Although a recent visit by a large Chinese delegation has been accompanied the news of the growth of Chinese investment and ambitions here in Croatia, according to the Rhodium Group, the Republic of Croatia is not even in the top ten countries in which China is the biggest investor in terms of capital.

Between 2000 and 2018, most Chinese investments took place in the largest European economies, such as the United Kingdom, Germany, Italy, and France. The top ten were ranked in the Netherlands, Finland, Sweden, Portugal, Spain, and Ireland.

According to Bloomberg's survey last year, they have owned or used to own shares in four European airports, six naval ports, and as many as thirteen football clubs.

Nevertheless, one must not forget the new big Chinese project, the Silk Road, known as the "One Belt, One Way" Initiative, in which the Chinese plan large investments in European infrastructure to strengthen trade links between China and Europe. Croatia is along that ''road'', and therefore the Chinese are investing in Rijeka Port, the Rijeka-Karlovac railway, mentions of investments in Croatian airports have been floating around, and there's almost no need to mention the fact that the Chinese are building Peljesac bridge, although its cost is mostly paid for by European Union funds.

The Chinese are also investing in Croatia's neighbouring countries, building roads and railways in Serbia, Bosnia and Herzegovina, and even in Northern Macedonia. In addition, Montenegro, as Novac.hr reported earlier this week, provided part of its state territory as a guarantee for the repayment of credits for the construction of part of the Bar-Boljari motorway to the Chinese Exim bank.

Since Montenegro has less of a chance of repaying this loan, it's not an entirely unbelievable option to remain without part of the state's territory, as bizarre as it might sound at first, and in that context, it's possible to understand some Croatian fears about entering into partnerships with the Chinese. This example is often cited as a warning to European countries to be extremely cautious when concluding economic agreements with China, to make sure they don't eventually fall into becoming a slave to the debts.

Trump's administration is much more closed to Chinese investment activities in the United States, and the authorities of other non-EU countries are much more cautious in entering into such partnerships, especially in the areas of telecommunications and defense. In any case, positively or negatively, China is certainly an extremely important player in Europe.

Make sure to follow our dedicated business page for much more on Chinese presence in Croatia. Chinese investment in Croatia, Chinese projects in Croatia and more.

 

Click here for the original article by Iva Grubisa for Novac/Jutarnji

Sunday, 14 April 2019

Rijeka-Karlovac Railway Line Heading for Chinese or EU Hands?

As the Chinese show greater interest in various Croatian strategic projects, the EU and the EC become more and more uneasy at the thought of such a heavy Chinese business presence in Croatia. As the EC changes its attitude towards some Croatian projects to which it reacted negatively in the past, has the Chinese influence rendered this change of heart senseless?

As Novac/Kresimir Zabec writes on the 13th of April, 2019, Croatia wants to finance the construction of the railway line from Karlovac to Rijeka, covering a length of 170 kilometres with EU funds, because that's more favourable to Croatia than doing it through a concession, stated Croatian Minister of Transport Oleg Butković at the construction site of Pelješac bridge recently.

Ironically much like Chinese whispers, it began to circulate in the media that everything had already been agreed with the Chinese, and that China's CRBC which is already building Pelješac bridge would construct the railway line via a concession model. Economy Minister Darko Horvat has thus announced giving the Chinese company a fifty year concession. However, Butković has very clearly stated that there has been absolutely no direct agreement with the Chinese and that everything will go through a tender, as usual.

''If we decide on a concession tender, then Chinese companies can also apply. If the line is built using EU funds, Chinese companies will be able to bid to be the contractors for the project,'' said Butković.

EU funding for the project is much more favourable for Croatia because it doesn't affect the growth of public debt. Should the case result in giving a concession to a Chinese company, they would build and finance it, but with government guarantees amounting to 1.7 billion euros, which is something the state can ill afford. According to current projections, the entire line should be completed by 2030.

Of the 270 kilometre of railway line from Botovo on the Croatian-Hungarian border, to Rijeka on the shores of the Northern Adriatic, the section from Karlovac to Rijeka is currently not covered at all by any form of EU co-financing.

A few years ago, the European Commission told the Croatian Government quite clearly that they would not finance that part of the line from Karlovac to Rijeka because it was too expensive and it just doesn't pay off. After that, the Croatian Government turned to the Chinese who were constantly showing interest in constructing that section. Now that the negotiations between China and Croatia have entered a much deeper and more serious phase, signals from Brussels, more specifically the European Commission, have been arriving which indicate that they are, despite all, still interested in the project.

Although that railway line is not officially part of the trans-European transport network, senior officials of the European Commission's Directorate General for Transport have openly told reporters that the Commission is ready to co-finance this project, and that it is a very important part of the European budget planning in the period commencing in 2021. Quite a turnaround, no?

In addition, this railway line is part of the line from Rijeka to the Hungarian border, which the European Commission has invested around 400 million euros into the modernisation and construction of, and that obviously doesn't quite sit well with the idea of the entrance of the Chinese into this project. According to statements, the ultimate goal of the overall project is to build a new bridge to the island of Krk and to build a new port on the island for container transport, which is an idea that the Chinese are also very interested in.

What stage are the works in?

Rijeka - Zagreb

The railway line from Rijeka tp Zagreb to the Hungarian border is part of the international Mediterranean Corridor connecting southern Europe with Central and Eastern Europe. The modernisation of this line would be of great importance to the Port of Rijeka. The modernisation and the construction of these lines are all in different stages of execution.

Botovo - Koprivnica - Križevci

In 2016, the European Commission approved 240 million euro for Croatia to build this section, but the contractor for the job hasn't yet been selected. A tender is in progress, but it has been stopped once again due to an appeal lodged by an Italian company.

Križevci - Dugo Selo

This is the only section of the track where works are ongoing. The European Union has invested about 180 million euros in this project, but works began a year and a half late because of contractor issues.

Hrvatski Leskovac - Karlovac

The design of this part of the line was co-financed by the EU in the amount of about 6 million euros. It is expected that tenders will be announced to modernise the existing works and build another track. The value of the works is estimated at 315 million euros and is planned to be funded through EU funds.

Karlovac - Oštarije

An entirely new two-track railway would be constructed on this part of the track, and the value of the works would be estimated at about 400 million euros. Project documentation has been produced, which has been paid for by the EU in the amount of 9 million euros.

Oštarije - Škrljevo

This, which is considered to be the most challenging part of the line, hasn't yet been fully defined, and technical documentation is being prepared by the EU, for which it has paid nearly 6 million euros. The value of the works on this section is estimated at as much as one billion euros.

Škrljevo - Rijeka - Jurdani

Project documentation was produced by the EU at a cost of 8.5 million euros. The value of the works is estimated at 270 million euros in total.

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Click here for the original article by Kresimir Zabec for Novac/Jutarnji

Saturday, 13 April 2019

Why Do The Chinese Really Want To Invest So Heavily In Croatia?

From the construction of Pelješac bridge to planning to build a car factory in southern Dalmatia's Neretva valley, to displaying interest in potentially rescuing the enfeebled Croatian shipyards Uljanik and 3 Maj, the Chinese are no strangers to showcasing their investment interest in Croatia.

Croatia has earned itself a less than positive reputation among foreign investors, alright, let's not be so politially correct and say that Croatia is a burning hot mess in the eyes of foreign investors. ABC has come to mean ''Anything but Croatia'' in foreign investment circles, and many are simply bypassing the country entirely. That's not to talk about local, Croatian investors who have been dragged through the proverbial mud twice or even thrice the amount. Given the somewhat depressing statistics, just why are the Chinese suddenly so deeply interested in investing such huge sums of money in Croatia?

While many have welcomed the money-laden offers of the Chinese, others have remained cautiously optimistic, and some have made no qualms about being vocal in their dismay at the thought of the Chinese coming and ''taking over'' by investing heavily in Croatia's many pressing strategic projects. The motives that push the Chinese towards closer and closer ties with Croatia tend to end up as mere hearsay and solacious gossip in the comment sections of various portals, but what do the experts believe?

As Novac/Marina Karlovic Sabolic writes on the 12th of April, 2019, the Chinese are truly incredible people. They come to Croatia every ten years, and the Croats immediately forget about all of the Chinese "bofl" goods they've spent their lives purchasing and throwing away. They suddenly become blissfully unaware of the dreaded "Made in China" mark that everyone gets so sick to the back teeth of seeing plastered all over basically anything. Instead, their innermost desires display blurry images of an ailing Uljanik, of Tito's rotting memorial complex in Kumrovec, of Rijeka's port, and even football stadiums, Slobodna Dalmacija writes.

Does anybody bother to ask in this country what the Chinese will ask for in return, however? Entering into the dubious and somewhat unpredictable world of Croatian shipbuilding, constructing a much needed railway line and maybe rescuing a port in Rijeka all before dinner time will come with a price tag, and likely a hefty one. The situation when that bill inevitably arrives is one that tends to be what fills the militant online naysayers with fuel, and dread.

''Don't be afraid, China will not demand that the Communist Party be established in Croatia or that it rules the country,'' prof. Dr. Vlatko Cvrtila, one of the most prominent Croatian geopolitical experts, stated. He also added that in its long-term strategic plans, China really doesn't have any sort of idea of ​​introducing a single-party system in the countries in which it invests its money. Their interest, claims Cvrtila, is of quite another nature.

''The Chinese don't invest because they have a lot of money and they want to go around giving it out. There's no philanthropy in international relations. All they invest in is related to their global strategy of creating influence and linking the Eurasian world in a continental way. By investing in infrastructure, ports, roads and railways, they enable their goods to reach their customers more easily,'' says Cvrtila.

Such an approach, he points out, is legitimate for a country that has boasts such great economic potential at this time like China does. Their mega-project, the Silk Road, which would increase the possibility of land transport, aims to reduce overall dependence on maritime traffic restrictions.

Cvrtila notes the US administration's estimates and warnings that China will one day turn its massive economic influence into strategic power as well. This is something that United States, which is already competing with Russia, doesn't think well of. However, China is now quietly placing all of its cards on the economic side of the story.

''In order to maintain its economic growth, China must have a market. In infrastructure projects, they actually make the market more widespread. China can't stop, while it's riding the bike it needs to rotate the pedals. The Chinese are present everywhere where they can create prerequisites for the distribution of goods. In Greece, they're in the ports, in Montenegro, they're dealing with the construction of a motorway, in Croatia, they're building Pelješac bridge. This is a win win situation for everyone, because in the long run, any investment in infrastructure can improve a country's economic performance,'' says Cvrtila.

China has, therefore, created the 1 + 16 formet in Southeastern Europe where its usually large-scale investments help countries that otherwise don't have a lot of foreign investment.

''Europe has survived a difficult financial crisis and there is no "free finance" which would enter JI Europe. China's investment is actually beneficial for Europe, because along with China, the European Union has developed non-competitive but increasingly strategic economic relations, realising in time that they [the Chinese] can contribute to its economic growth,'' emphasises Cvrtila.

Croatia, according to him, is fortunate because it is strategically quite well positioned: it is closer to the heart of Europe than it is to Northern Europe. And, de facto, it is located at the intersection of the roads between the East and the West.

Unfortunately, Croatia hasn't used its geostrategic advantage yet. LNG terminal stands, as do the new train lines. It's also important to revitalise the Port of Rijeka so that Croatia can profit in the fast transport of goods to European consumers. We don't have our own investments, Europe has no capacity anymore, which is why the Croatian Government is seriously considering deals from China,'' concludes Cvrtila.

Therefore, there's no need for Croatia to be afraid of the Chinese, but rather actually use them for its own interests.

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Click here for the original article by Marina Karlovic Sabolic for Novac/Jutarnji

Thursday, 11 April 2019

Chinese Reveal Interest in Croatia's Enfeebled Uljanik and 3 Maj Shipyards

As Poslovni Dnevnik writes on the 10th of April, 2019, Chinese interest continues to grow as the Republic of Croatia and China opened a new, ambitious chapter of economic and trade relations on Wednesday, deepening their relationship even more after talks between the two prime ministers who both considered the talks to be a "fruitful turnaround".

Relations between Zagreb and Beijing initially reached a higher level after the Chinese company China Road and Bridge Corporation was chosen as the much anticipated Pelješac bridge builder.

The two countries readily signed six agreements, which cover the segments of rail, agriculture, digital technology and tourism. Four more will be signed on Thursday and Friday down in Dubrovnik at the 16 + 1 summit.

"We have signed a memorandum on a much more serious, transparent and easier cooperation between companies, on the transfer of capital from China to Croatia, as well as a two-way transfer, and the possibility of capital from Croatia being invested in China. This opens up the possibility of trust and a much stronger and more serious transfer, investing and manufacturing, and we've been able to talk about other large-scale structuring projects, especially given the fact that a Chinese company is building Pelješac bridge,'' said Croatian Economy Minister Darko Horvat for RTL.

He also noted that at this point in time, Croatia has a bilateral economic exchange with China which is somewhere close to the level of a billion euros, in a much larger deficit on the Croatian side.

Horvat also confirmed that Chinese companies are offering to be the ones to construct the Rijeka-Zagreb line.

"This project has to happen, the Chinese side has shown its interest. Whether that is going to come in the shape of a long-term concession agreement or in another model... Minister [Oleg] Butković is engaged in very intensive negotiations [on that matter] at the moment,'' stated Horvat.

In conversation with RTL, Horvat also revealed that they now have a clear signal that there is interest from the Chinese side to invest in Croatia's burdened shipyards, Uljanik and 3 Maj, in Pula and Rijeka.

"The real conversations are just starting, and I'm sure we will have some concrete figures tomorrow,'' he added briefly.

When asked whether or not Chinese could end up becoming the strategic partner needed to finally save Uljanik, the economy minister simply said that nobody was trying to hide the fact that the Chinese had been called upon.

Make sure to follow our dedicated business and politics pages for more information on the blossoming China-Croatia relations, why some remain suspicious, why the European Commission has raised its eyebrows at the fact that a Chinese company is building a bridge funded primarily with EU money, and much more.

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