Tuesday, 9 April 2019

From Dalmatia to Karlovac and Rijeka, Chinese Eye Up Croatia

As Gordana Grgas/Novac writes on the 8th of April, 2019, if there was a European tender held solely to attract Chinese investment, the champion would certainly be Great Britain, followed by Germany, and then immediately by Italy and France. Croatia might not be anywhere near the top of China's European ''wish list'', but despite that, the Chinese interest just keeps on coming...

The countries which make up Central and Eastern Europe are low on the aforementioned European scale, even though with China, at least since the year 2012, they have enjoyed a special relationship through the China + 16 initiative, which, as a parallel diplomatic format, tends to irritate the larger, more powerful members of the European Union, as well as the European Commission itself. One of lowest on the list is Hungary with its Eurosceptic government led by Viktor Orban, and Croatia is at the very bottom, but the desire is to alter that.

This week, there is an official visit by Chinese Premier Li Keqianga to Croatia, and the eighth summit of sixteen countries of Central and Eastern Europe with China down in Dalmatia's southernmost city of Dubrovnik, and it might be the easiest thing to look at it all as part of a political show that could act as bait for investment. Whether or not this investment will really happen and what shape that might take, whether it will be done mainly through private projects, for example in tourism, or through major state projects in the rail and port sector, is not yet clear at all.

Croatia will sign nine general memoranda with China in the areas of trade, investment, agriculture, transport, science, technology and innovation, education, sport and tourism, and the most convenient customs administration protocol that will enable the export of Croatian dairy products, which are greatly loved in China. Croatia also intends to join the Asian development investment and infrastructure bank headquartered in Beijing, how much that will cost Croatia however, is not yet known.

How large European countries cooperate with China was demonstrated just ten days ago by the Italians and the French. For the visit of Chinese President Xi Jinping, Rome signed 20 agreements (and joined One Band, a one way system that connects China with the rest of Asia, Europe and Africa, and expands its trade and influence). In Paris, 15 such agreements were signed, where either contracted or announced transactions amounting to billions of euros were dealt with, covering a wide range of areas - from exports of Sicilian red oranges and French frozen chicken to the opening of Italian ports for Chinese investors, sales of 300 Airbus aircraft, energy projects, shipbuilding, etc.

After the construction of Croatia's much anticipated Pelješac bridge, which is funded primarily by European Union money, Croatia hopes for more Chinese investments in national transport projects. This regards the port of Rijeka and the entire Rijeka traffic route, including the line from Rijeka to Karlovac, as well as projects such as airports.

According to data which takes the whole of Europe into account, during the period from 2000 to 2018, almost 47 billion euros of direct investment from China was invested in Britain, Germany saw 22 billion euros, Italy saw 15.3 billion euros, and France saw 14.3 billion euros. Hungary saw a significantly smaller figure of 2.4 billion euros from the Chinese, Poland saw even less with 1.4 billion euros, Romania saw 900 million euros, and Croatia saw just 300 million euros. A stark contrast to the United Kingdom, which is by far one of Europe's most powerful nations.

In the region, the intensity is getting stronger, and in neighbouring Serbia, Chinese loans have come in handy when building transport infrastructure and energy projects and, but that medal, like any other, has two sides, and the takeover of companies hasn't always been met with welcome arms by the Serbs.

The aforementioned data report shows that the culmination of Chinese investment in the EU was reached back in 2016, largely through the take over of companies, and over the last two years, it has fallen, which is attributed to more stringent rules implemented by some EU member states, as well as increased capital controls conducted by Beijing.

For Zagreb, it was a bit uncomfortable to get closer to Communist China in the above mentioned period, as the common policy of overseeing and limiting the Chinese penetration of the ''Old Continent'', especially in strategic and technologically sensitive areas, was being undermined. That chapter however, appears to be well and truly over in Croatia's eyes.

While large investments and projects are anxiously anticipated here in Croatia (and the Chinese interest in Rijeka and the Rijeka-Karlovac line is at least nine years old), data on trade relations show that there is a deficit. State Secretary Nataša Mikuš Žigman notes that there has been a noticeable increase in the volume of trade between Croatia and China, but imports are growing more than exports are. Last year, exports of goods amounted to 133.4 million euros, an increase of 19 percent when compared to 2017, while imports amounted to 803 million euros, an increase of 15.6 percent.

Croatian companies might be able to export more to China in the future, and the business forum being held in Dubrovnik is an excellent chance to showcase some innovative Croatian export ideas, but for now, the main export products continue to be raw or semi-finished products such as stone, leather, untreated wood and polymers, while when it comes to imports, we can see the reign of traditional Chinese consumer goods, white electronics and telecommunications equipment, as well as a constantly increasing number of Chinese tourists visiting Croatia, too.

As the Chinese continue to ramp up their business in Croatia, from Pelješac bridge to Rijeka's port, more announcements continue to appear, and just recently we reported on the Chinese plan to open up a car factory tucked away among the citrus trees of southern Dalmatia's fertile Neretva valley, more precisely in the Nova sela business zone near Kula Norinska in Dubrovnik-Neretva County. While many remain concerned about Chinese influence in Croatia, many others are much more occupied and lured by the promise of an economic boost and employment opportunities.

Make sure to follow our dedicated business page for more information on China-Croatia relations and much more.

 

Click here for the original article by Gordana Grgas for Novac/Jutarnji

Sunday, 7 April 2019

Chinese Building Car Factory in Dalmatia, Jobs for 500 People

Chinese-Croatian relations grow ever closer as the Chinese expand their business empire in Dalmatia, not merely stopping at Pelješac bridge. The Chinese are now setting their sights on a vehicle factory in southern Croatia.

As Poslovni Dnevnik writes on the 7th of April, 2019, an army of unemployed people, almost three thousand of them in total who are registered at the employment centres in Metković and Ploče in the Neretva region, received the news with understandably huge enthusiasm.

The Chinese will re-launch the Neretva valley, Slobodna Dalmacija writes, breathing life back into a part of Dalmatia that really needs it. Apart from the fact that they are already working on the aforementioned construction of the much anticipated Pelješac Bridge, the Chinese will soon embark on yet another major project in Croatia - a factory for electric cars and scooters in the Nova sela business district, which has so far been being developed in the Neretva valley's Kula Norinska area, but at a very slow pace.

This slow page is set to change a lot when the Green Tech Group, registered as a company in Zadar by Karl Soong along with Croatian entrepreneurs Mladen and Anthony Ninčević, starts with the construction of electric vehicles intended for the markets of Central and Eastern Europe down in Nova sela.

There are many unemployed people living in and around the Neretva valley, which is close enough yet just a bit too far away from potential employment in tourist areas like Dubrovnik. This news naturally brought a smile to the faces of many seeking steady work as in Kula Norinska, work began on the infrastructure in the future business zone in Nova sela, thus making this potentially enormous capital project start right there on ground in Dalmatia.

Twenty people would be employed to start things up at Dalmatia's brand new factory. However, when investment in the production of electric scooters, automobiles and batteries begins to add up and things gain some motion, up to 500 workers will be able to gain employment in various positions in the electric vehicle production facilities.

Make sure to follow our dedicated business page for more on China-Croatia relations, business in Croatia, the investment climate and working in Croatia, and much more.

Sunday, 31 March 2019

Croatia and China: New Agreements and Chances for Croatian Companies

Croatian companies have a chance for further growth and more exporting should Croatia decide to deepen its business ties and cooperation with China, the country which is currently undertaking the mammoth task of constructing Pelješac bridge.

As Suzana Varosanec/Poslovni Dnevnik writes on the 31st of March, 2019, at the 8th Summit of heads of government of central and eastern European countries and China, which will be held from the 9th to the 12th of April in Dubrovnik, the "Dubrovnik Guidelines" document is expected to be adopted, which will lay out the activities in this format in the forthcoming phase.

The summit on the EU and China set to take place in the Belgian capital of Brussels on the 9th of April is expected with interest, and Chinese Prime Minister Li Keqiang is coming to Croatia. There are bilateral talks between Keqiang and Prime Minister Andrej Plenković on the agenda, as well as the signing of several already concluded bilateral agreements in Zagreb. In line with the things that are set to be dealt with and concluded at the summit, Croatia and China could strengthen their blossoming cooperation with as many as ten brand new agreements. Other major Croatian expectations for the strengthening of overall relations with China are also awaited with gritted teeth, with the greatest interest being expressed in the areas of infrastructure, tourism and SMEs.

After the construction of Pelješac bridge, which is being built by China's CRBC, will yet more new infrastructural advances, such as the modernisation of Croatia's railway system, soon come to pass? The plans are also for the Chinese and Croatian prime ministers to visit this huge construction site down in southern Dalmatia. The Chinese delegation will consist of around 250 members, and that isn't including the 300 business community representatives coming to the 9th business forum ''16 plus 1''.

A total of more than 700 entrepreneurs have been registered, and many opportunities are on offer to Croatian companies when looking at entering the giant Chinese market, meaning that the initiative is on them. B2B meetings can be arranged with the help of an application created by the Croatian Chamber of Commerce (HGK), and as Croatia's SME coordinator, it will officially launch the 16 + 1 coordination mechanism for small and medium-sized enterprises. The major promise for Croatian companies which operate within a multitude of different sectors lies in exports when it comes to deeper cooperation in doing business with China.

Croatia's visibility for the Chinese is continually growing, by about fifteen percent annually, while the number of tourists from China has increased by an enormous 120 percent over the past two years alone. In 2019, a record 300,000 Chinese tourists are expected to visit Croatia, which is the fastest growing market in the whole of the Republic of Croatia.

Make sure to follow our dedicated business page for much more.

 

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

Tuesday, 26 February 2019

Could Croatian Meat Products Open Profitable Export Door to China?

By-products from Croatian slaughterhouses could potentially have some good buyers in China. What Croatia considers to be meat by-products are valued delicacies over in China, and exporting them could open up a potentially highly profitable door.

As Poslovni Dnevnik writes on the 26th of February, 2019, the Chinese are happy with what they've seen, and according to the Croatian Chamber of Commerce (HGK), ''we're now awaiting the final findings to sign a bilateral agreement.'' These comments come after Dukat and Vindija, as well as several farms and other competent Croatian institutions were recently visited by a Chinese deligation following the organisation of a visit by the Ministry of Agriculture and HGK.

As Vecernji list writes, the reason appears to be that milk and dairy products over in China are becoming more and more sought after and sell at a very good price, so along with the construction of Pelješac bridge, cooperation can now also be expected in terms of agriculture and food, such as via the potentially very profitable export of top quality Croatian cheeses and dairy products.

In addition to this potential wealth of profit, all eyes are currently also on the recent visit of the Deputy Prime Minister and Minister of Agriculture Tomislav Tolušić to China. Branko Bobetić, the director of Croatiastočar, says the total export of agricultural and food products in the EU from December 2017 to November 2018 stood at 115 billion euros, of which 11 billion was from China.

''Of that [amount] 2.2 billion euro is made up of meat and meat products from the EU, and 1.3 billion is from milk and dairy products, and as total imports of agricultural and food products from China into the EU amounted to 5.7 billion, EU exports are twice as big as imports are,'' stated Bobetić. The bulk of these meat exports are, of course, pork, and as China desires exactly the products Croatia considers to be by-products, there is a big chance there.

''Pigs' heads, bones, stomachs, ears, innards... they are delicaies there. So far, we've exported some of it to Hong Kong at an average price of 1.25 euro, while on the Chinese market, which is still closed for by-products from our slaughterhouses, such products have reached twice the price,'' said Bobetić, pointing out that based on the estimation of the amount of pigs which end up in Croatia's biggest slaughterhouses each year, there were about 5-6 thousand tons of pork by-products worth at least seven million euros in exports.

Make sure to follow our dedicated business page for more information on Croatian relations with China.

Saturday, 26 January 2019

Minister Oleg Butković Visits Company with Largest Fleet of Boats in World

As Morski writes on the 26th of January, 2019, Minister Oleg Butković spent some time in Shanghai and Ningbo where he met with the representatives of the giant shipping company COSCO Shipping.

The Minister of Maritime Affairs, Transport and Infrastructure also visited the port of Ningbo, the only port in the entire world which has shipped more than one billion tons of cargo, a statement from the Ministry of Maritime Affairs said.

In Shanghai, the Croatian delegation led by Minister Oleg Butković met with representatives of COSCO Shipping, a well respected shipping company that owns the world's largest fleet, as well as the third-largest fleet of specialised container ships.

On the same day, a meeting was held in Ningbo with representatives of the port of Ningbo Zhoushan, the port that, for the very first time, shipped over one billion tons of cargo in 2018, making it the only port in the entire world to do so. During the visit of the Croatian delegation of which Butković was a leading part, the data from the huge Chinese port showed how it has dealt with a massive 2,103,683 containers since the beginning of the year.

The visit to the port of Zhoushan was completed by visiting two of the most significant container terminals and meeting with leading port operators, which was an opportunity to exchange experiences with the Port of Rijeka's administration and talk about the projects they are preparing, whereby a clearly mutual desire for further cooperation was expressed.

The visit to Shanghai and Ningbo Zhoushan marked the end of the official visit of Minister Oleg Butković, who has been spending time in the People's Republic of China since January the 20th, and where he held a series of meetings with the aim of exchanging experiences between the two countries in the area of ​​transport infrastructure, and further enhancement of mutual cooperation.

Make sure to stay up to date with Croatia's political scene by following our dedicated politics page. If you're interested in Croatia's deepening relationship with China, give our business page a follow.

Tuesday, 15 January 2019

China and Croatia Grow Closer as Chinese Focus on Rijeka and Coast

The relationship between China and Croatia is continuing to grow ever closer, and bringing the Chinese to the Croatian coast is potentially just an introductory step in their much wider engagement on the development of Rijeka's traffic connections, both operationally and financially.

As Poslovni Dnevnik writes on the 14th of January, 2019, Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butković, will travel to China later this month, where he will discuss, among other things, the opportunity for them to take the concession for a new Rijeka container terminal on the coast with Chinese shipowners and port operators, according a report from Novi list.

Butković will meet with the Chinese traffic minister, representatives of CRBC, who will build Pelješac Bridge, and will also meet with representatives of the naval giant COSCO, as well as several large Chinese shipping and port companies, the potential leasers of the container terminal on that part of the Croatian coast, for which the concession would have to be announced by the middle of this year.

As China and Croatia's bond grows deeper still, the Chinese companies will start with the concession on that particular part of the Croatian coast, the development of a logistics centre and a back terminal in the entrepreneurial Miklavlje zone will probably be offered.

If an interest in making such a move is shown, then the competent Croatian ministry and the Croatian Government will begin seriously contemplating their involvement in far larger infrastructure projects on Rijeka's traffic connections, primarily the construction of a railway line from Rijeka all the way to the Hungarian border, and when looking at much longer-term plans, the possible construction of a large container terminal on the island of Krk, along with a new road-rail bridge.

Make sure to stay up to date with everything you need to know on the growing relationship between China and Croatia and much, much more by following our dedicated business page.

Thursday, 10 January 2019

Pelješac Bridge Under Construction as Access Roads Lag Behind

The Chinese need to have Pelješac bridge completed in just over thirty months time (by July 2021), but what of the actual access roads leading to it? That appears to be quite another story, and rather unsurprisingly - a long and potentially complicated one.

As Josip Bohutinski/VL/Poslovni Dnevnik writes on the 9th of January, 2019, the first signs of life of the construction of Pelješac bridge site began today.

The Chinese consortium led by the China Road and Bridge Corporation signed up for this demanding job more than five months ago, and according to the contract, Pelješac bridge has to be built within 36 months, meaning that this strategic Croatian project should theoretically be completed in the summer of 2021. While works on Pelješac bridge itself have finally begun, albeit slowly, the works on the bridge's obviously required access roads are not even close to their beginning. So far, no contractor has even been chosen to build these roads, and Croatian roads (Hrvatske ceste) has now launched two tenders for the eventual construction of the bridge's access roads.

In regard to the first part, more specifically the Duboka-Sparagovići section of the road, offers will begin being taken in the middle of June, but the decision on the contractor has not yet been made, although it has been stated in the related documentation that this decision will be made within 120 days from the day of the opening of the actual bid. It has also been stated that the chosen contractor will be required to build their section of the road within 33 months following their initial introduction to the job. Whether or not Pelješac bridge and its access roads will be completed at the same time is already questionable.

Problems can be foreseen, or better to say predicted for argument's sake, that if one takes into account the simple fact that once the contractor is finally selected, other bidders have the right to appeal, and the resolution of these procedures in such bids typically last anywhere up to three months. If Croatian roads decided on the contractor soon, that contractor would still not actually have anything to do with getting any of their work done until the middle of the year. Seven offers have come in so far, the lowest of which was sent by Integral engineering from neighbouring Bosnia and Herzegovina, ironically a country which has shown the least support for the construction of Pelješac bridge.

Back at the beginning of December 2018, a public tender for the construction of the second part of Pelješac bridge's access roads was published, and the currently estimated value of these works stands at a massive 449.1 million kuna. The deadline for bids for the second part of the road is January the 21st, 2019. The selected contractor will have a 30-month deadline for the construction of the 18 kilometre road to be put into operation, but once again, appeals are expected to follow any final decision, which translates to more waiting around, and more wasted time.

Make sure to stay up to date with the ongoing Pelješac bridge saga by following our dedicated lifestyle and politics pages.

 

Click here for the original article by Josip Bohutinski/VL on Poslovni Dnevnik

Sunday, 2 December 2018

Chinese Investment in Croatia: First 160 Million Euro Project Begins

As Gordana Grgas/Novac.hr writes on the 1st of December, 2018, after much talk and many announcements, the official launch of the first Chinese investment in Croatia took place last week, which should reach the staggering amount of 160 million euro in two years.

This massive foreign investment is an interesting one, not only because of the amount, and not only because it's pioneering in its nature, but because when looked at in its wider context, it's a big part of the strategic Chinese "One Belt, One Way" initiative. It certainly ''lit up'' on the ever-watchful radar of the European Commission, which overlooks investments from third countries, it also naturally drew the attention of all those who look at China's investments in Croatia in a more geopolitical context. Croatian Prime Minister Andrej Plenković presented it as part of "project-oriented cooperation between the two countries".

The project itself is the construction of a wind farm near Senj, which was inaugurated by a huge Chinese construction company, Norinco International Cooperation, one year after signing a contract to take over a majority stake in the Croatian company - Energija projekt. This 32 million euro transaction was also recorded in a large analysis of both realised and announced Chinese investments across Europe, which was published by Bloomberg in the spring, pointing out that over the last ten years alone, the figures of such huge Chinese investments reached an incredible 300 billion euro.

The CEO of the Peking-based Norinco International Cooperation, Wang Yitong, was present at the opening ceremony in Senj last week. Otherwise, the company is listed on the stock exchange (the Shenzhen Stock Exchange), but is actually owned by the state. The situation is rather complicated, but when it is looked at objectively, it's clear that Norinco is part of the gigantic China North Industries Corporation, which was founded back in the 1980s and is among the largest state-owned conglomerates in terms of assets and revenues, and is the world's best known company for the production of weapons of all kinds.

Since 1999, it has been a part of an even larger group of companies, the China North Industries Group Corporation (CNGC). It is made up of fifty companies with a total of about 280,000 employees, it accounts for more than 40 percent of its revenue outside of China, operates in 40 countries, and is engaged in research and development, as well as in the production of weapons and military equipment. It is also involved in mining and oil businesses.

This group, abbreviated as just CNGC, is on this year's Fortune magazine's list at 140th place on of the list of global top-ranked companies, estimated at 64 billion dollars. As was published by Jane's Defense Weekly, CNGC has been on the list of twenty state-run Chinese firms for restructuring since last year, when the Chinese Government announced that it would accelerate a reform program to introduce "mixed ownership". This is a measure of privatisation, and from the huge group, as was announced last year, twelve companies are listed on stock exchanges from the automotive, electronics, and chemical industries.

Owing to above, Croatia did not enter into the Senj project via a private company, but with a company associated with the very leaders of the Chinese state, which is a part of an important conglomerate. In Brussels, the somewhat expected raising of eyebrows has so far been following and challenging the major Croatian contract with the Chinese to carry out works on the long awaited Pelješac Bridge. The strategic project is cofinanced by money from the European Union budget, and Brussels isn't happy that the Chinese will be the ones to built it.

Now, in a direct Chinese investment in Croatia, into the energy sector (several similar ones have already been realised in the EU), the Chinese will, in a period of two years, build 39 wind turbines with a total power of 156 megawatts under Velebit, while Brinje and Senj will see 5.5 million kuna a year spent on wind energy, Croatian subcontractors will be part of the construction work.

For the takeover of Energija projekt, over which the former owners have been holding disputes, the Chinese have engaged the American consultancy firm Norton Rose Fulbright, and the process was brought to an end and registered at the Commercial Court in Rijeka back in September this year. Thus, the Chinese company has also taken over the rights to build and manage the wind power plant near Senj, and the consultants' belief is that Norinco is "taking the initial position for entering the European Union market and then expanding and increasing its market share within the EU, and obtaining references in a new business environment". Plenković has expressed his hopes for Norinco to be the predecessor to other Chinese companies and further direct Chinese investment in Croatia, often holds talks about intensifying relations, and is preparing a meeting on the subject which will be held in Croatia in the spring of 2019.

Geopolitical experts, like one particular Berlin think tank, announced earlier this year that China's investments, especially when they are made by state-owned companies, should always be looked at as an attempt to secure influence over European Union politics. But should Plenković really worry about that now? Probably not; direct foreign investment is not so common, and whether or not Chinese companies will appear on projects such as construction of railway lines, more specifically what will happen with the Chinese investment in the Port of Zadar and the cooperation between Chinese and Croatian construction companies and such, is yet to be seen.

During current moments on the international scene, China continues to attract large amounts of attention as a global creditor, not just as an investor, and despite Chinese investments in Croatia, the country doesn't have such an experience under its belt. Yet.

Recently, the New York Times published a text entitled "The World, Built by China", which analyses as many as 600 projects in as many as 112 countries worldwide which were somehow funded by the Chinese over the last decade, from gas pipelines to bridges, roads to railway lines, and many more. Many of these projects are part of the strategic "One Belt, One Way" initiative (often described as the Silk Road for the 21st Century), and in the aforementioned text, the Chinese strategy is even compared with the American plan after the Second World War, yet describing it to be ''brave, expensive, and far more risky".

Make sure to follow our business page for more news on Chinese investment in Croatia and much more.

 

Click here for the original article by Gordana Grgas on Novac.hr (Jutarnji)

Friday, 26 October 2018

Frankfurter Allgemeine Zeitung Accuses Croatia of Being China's EU Player

Croatia's decision to allow a Chinese state-owned company to construct Pelješac Bridge isn't sitting well with many...

Friday, 21 September 2018

Railways, Tourism and Ports Interest Chinese Investors

''The economic and political relations with the country in which he wants to invest are taken into account by every Chinese investor.''

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