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2018/05/04 / Erste Group Research

China’s presence in CEE


Despite increasing volume of trade, China remains minor trade partner for CEE. Chinese investments focus on transport, energy and technology sectors. Chinese financing is still less attractive for CEE than EU funds.

For the past half-decade, China has been attempting to increase its presence in the CEE region, both in terms of trade and political influence, but recently interest has visibly increased. While trade and investment links between China and the CEE region have grown over the last decade, growth has not hit declared values and did not meet the expectations of some of the CEE countries.

Before joining the EU, we saw gradual growth in imports from China to the region and that accelerated in 2007. Despite strengthening trade relations, direct links between China and CEE remain rather small. Recently, China has also been pursuing investment opportunities in the region, as is evidenced by the increasing value of Chinese transactions. In the last ten years, the value of construction projects co-financed with China amounted to EUR 8.2bn (0.7% of GDP of region in 2017), with almost 90% of this conducted in Serbia, Hungary and Romania. These projects focus mostly on the transport, energy and technology sectors.

At the end of 2017, the Chinese Prime Minister announced that China plans to invest an additional EUR 2.4bn in the already existing fund of EUR 8.9bn. This announcement again triggered discussion about tensions between the EU, CEE and China. The EU is mostly concerned about the geopolitical leverage which those investments might trigger, especially in a region in which euro-skepticism has recently been growing. However, while Chinese financing might not seem as attractive to EU-CEE countries, it is much more significant in the Western Balkans, which have only limited access to EU grants.

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General information

AuthorErste Group Research
Date2018/05/04
Languageen
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCroatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-
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