Friday, January 11, 2013

Chinese drive into Southeastern Europe

By Ioannis Michaletos/ 

The Chinese multinational companies are increasingly expanding their presence in Southeastern Europe in order to set up further export bases into the EU and at the same time exploit opportunities for investments in the local economies, which are in need of imported capital due to the economic and debt crisis.

The importation of Chinese capital comes through bilateral loans, investments and share placements through a long-term strategy of Beijing to gain a considerable foothold in one of the most strategic placements of the European Continent. Special attention is given to logistic, transport and industrial facilities.

In a recent Financial Times report, it was relayed that China, aims to establish a $10bn credit line for central and Eastern Europe. The state-owned Export-Import (Exim) Bank of China is already financing the upgrade of units at Kostolac power station in Serbia, whilst Chinese construction companies have agreed with Belgrade in 2010 a 200 million USD contract to build a bridge in Danube, a deal that was further strengthen under a 150 million USD, loan from China to Serbia with an incredibly low interest rate of 3% and repayment period of 15 years. That is one third of what Serbia currently pays as an interest when borrowing from European or American banks and for a
significant less period of time. In total since 2009, around 1.3 billion USD of deals have been signed between the two countries including a modernization of the local railway system. What is also of interest is that according to a Xinhua report, there is significant rise in the number of Serbian students wanting to learn Chinese as a second language, which is attributed in the increasing economic role of China over the past few years. Lastly, in 2011 a memorandum was reached that called for an n additional 2.5 billion USD long-term investments for the construction of new power plants in a joint venture with Serbia’s power utility Company EPS...................continues...............

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