General

New Trends in International Trade! Shifu Capital Management Co., Ltd., led by Industrial and Commercial Bank of China, recently announced that its second fund, the China Central and Eastern Europe Fund II, has been established in Luxembourg, and will steadily carry out investment activities in Central and Eastern Europe.

Not only financial capital, but also China's manufacturing industry is constantly rushing to Central and Eastern Europe to carry out investment activities.

In March this year, Yiwei Lithium started the construction of power battery factory in Hungary; In June, Lenovo's factory in Hungary was officially put into operation, with a daily output of 1000 servers and 4000 workstations; The Board of Directors of Borgwana Group approved a major investment project with an amount of 120 million US dollars in July, including the establishment of a turbocharger manufacturing plant in Poland, which will be completed in the next four years; On September 5, the Chinese power battery manufacturer Ningde Times signed a pre purchase land agreement in Debrecen, the eastern city of Hungary, to launch a 7.5 billion euro Ningde Times Hungarian battery factory project, which is expected to create more than 9000 jobs in Debrecen; On September 16, the representative of the "new force" of China's new energy vehicles, Weilai Automobile, completed the first power station replacement in the European factory of Weilai Energy invested and built in Perth, Hungary; Poly Rubber said recently that the project invested by the company in Poland is expected to be completed and put into production in 2022.

The rapid development of investment cooperation between China and Central and Eastern Europe is inseparable from the sound operation of the China CEEC cooperation platform over the past 10 years. The original intention of this cooperation platform is to build a practical framework for China and Central and Eastern Europe cooperation, and accelerate the implementation of investment projects through high-level dialogue, enterprise docking, personnel exchanges and other measures. Over the past 10 years, China's investment in Central and Eastern Europe has shown a good momentum of development, driven by positive factors such as the China CEEC cooperation mechanism.

From the overall situation of Chinese enterprises' investment in Europe in recent years, Central and Eastern Europe is not the main destination of Chinese investment. According to the data of the Statistical Bulletin of China's Foreign Direct Investment in 2020, by 2020, China's investment stock in Central and Eastern European countries is 3.74 billion US dollars, accounting for 3.1% of all investment in Europe. However, it is noteworthy that Chinese enterprises' investment in Central and Eastern Europe, especially industrial investment, is increasing.

According to Chinese statistics, China's investment in Central and Eastern European countries involves energy, minerals, infrastructure, logistics, auto parts and other fields. The main investment destinations of Chinese enterprises in Central and Eastern Europe include the Czech Republic, Poland, Hungary, Serbia, Romania and Croatia.

Among them, due to a large number of new acquisitions, Poland has become one of the main beneficiaries of China's direct investment in Central and Eastern Europe. According to the data provided by the Polish National Bureau of Statistics, by the end of 2020, there are 625 Chinese enterprises in Poland, of which 5 have registered capital of more than 1 million dollars. In 2021, Cathay Pacific Huarong, Changfei Optical Fiber and Cable, New Zebang (lithium battery material) and other company projects have made significant progress. Examples of China's successful investment in Poland include TCL Operations, Liugong Machinery, Xiangyang Automobile Bearing, China Everbright Environment, Hongbo Clean Energy, Bafang Electric, Tongfang Nuctech, etc.

Yudeliang, the representative of the Polish Investment and Trade Bureau in China, said, "In recent years, Chinese enterprises have continuously increased their direct investment in Poland, especially in the electric vehicle industry. At present, this industry accounts for about 70% of China's investment in Poland, and chemical battery new materials companies like Cathay Huarong have gradually settled in Poland."

It can be seen from the above investment projects that China's investment in the international trade of Central and Eastern Europe is mainly the manufacturing real economy. International trade and investment enterprises generally master independent key core technologies, or achieve close integration of advanced technology and advanced manufacturing; They all have clear plans for globalization, especially for European business.

In addition, the provision of regional public goods is also one of the characteristics of the investment cooperation model between China and Central and Eastern Europe. Providing regional public goods and promoting economic development is one of China's experiences. Based on the development experience and accumulation of "getting rich and building roads first", China has promoted connectivity in Central and Eastern Europe. Among the numerous projects financed and supported by China, interconnection projects account for a considerable proportion. Some large-scale infrastructure and energy investment projects have landed in Central and Eastern European countries as public products, promoting regional development, such as the investment in the Hungary Serbia Railway, Montenegro North South Expressway, Peleshatz Bridge, Tuzla Thermal Power Station, Boer Copper Mine and Smederevo Steel Plant, which have achieved remarkable results.

The investment cooperation between China and Central and Eastern Europe has continued to deepen and become more solid, and has gradually expanded from traditional infrastructure construction and cooperation in large energy projects to scientific and technological cooperation and green cooperation with high added value. For example, China's international trade enterprises brought to Hungary not labor-intensive backward production capacity, but the most advanced manufacturing experience. Lenovo's "intelligent factory" can control every screen and machine tool with the "production control tower" to achieve real-time environmental monitoring and human-computer collaborative production. The era of Weilai and Ningde has brought the latest technology in the field of electric vehicles. In 2021, the Koposhburg photovoltaic power station in Hungary invested and built by China National Machinery Import and Export Corporation and the Polish photovoltaic power station project invested and purchased by China CEE Fund will be completed and put into operation successively, which will reduce 120000 tons and 50000 tons of carbon dioxide emissions each year.

In May this year, at the first China CEEC Technical Cooperation Exchange Conference, the website of China CEEC Technology Transfer Center and the "Cloud Docking Platform" was launched, 12 CEEC countries and 60 domestic institutions became the first batch of partners, and about 20 inter agency cooperation memoranda and 10 project cooperation agreements were also reached.

As emphasized by Shifu Capital, the prospect of the international trade market in Central and Eastern Europe is worth looking forward to under the promotion of cooperation mechanisms such as "China CEEC cooperation" and the joint construction of the "the Belt and Road".