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Poland as China's key partner in CEE

Published: 15.12.2015

Poland is a key state for China in the CEE. Chinese consumers believe the European food products to be safe, a factor that Poland benefits from. Currently, Poland is the regional leader in terms of foods exports to China, the Center for Eastern Studies expert Marcin Kaczmarski told PAP.

Poland is a key partner for China in CEE, according to Kaczmarski. “Our [trade] volume amounted to some USD 25 bln in 2014, of which imports from China to Poland represented 90%, while Polish exports - 10%,” he said. Such imbalance is very characteristic for most CEE countries, the expert underlined.

“Some managed to reduce the deficit over the past few years. However, as Poland's example shows, even in the case of big exports growth, falling imports, this imbalance still remains. Which is largely linked to both the asymmetry of the economies as well as the fact that Polish and Chinese economies, in a sense, compete rather than complement each other,” Kaczmarski notes.

Polish food exports to China biggest in region

Poland is the regional leader in terms of food exports to China, the expert points out. Polish enterprises lead in terms of the number of certificates obtained from the Chinese and allowing for foods exports, also in such competitive sectors as e.g. powdered milk. “Also, looking at the volumes, Polish food products account for about a half of food exports from the region,” Kaczmarski told PAP.

Poland benefits from the fact that Chinese consumers see Polish foods as safe, good quality and cheaper than Western products. At the same time, however, China's foods policy follows two separate directions, the expert stresses. “In the past few years, contaminated foods were in many cases the cause of children's or adults' deaths. As a result, the issue of food has become very sensitive in political terms. Consequently, China is opening to imports, but at the same time it wants to protect its own market. They want to change the position of domestic producers so that they become more competitive, start producing foods of better quality,” Kaczmarski says. “Accordingly, entering Chinese market is not the easiest thing.”

The graph shows the significance dominance of China in terms of trade with Poland as imports from China top exports to the country about five times. In 2014, Poland imported over USD 15 bln worth of goods from China and exported goods for less than USD 3 bln.

Source: Polish - Chinese Chamber of Industry and Commerce

Good political relations are treated in China as a preliminary condition for the development of economic ties, according to the expert.

“The '16+1' format [of cooperation between China and CEE states] provides certain preliminary conditions which we can take advantage of, but still some decisions, e.g. concerning certification of individual enterprises which allow to raise food exports to China, have to take place at the level of bilateral relations,” he says.

The 16+1 cooperation format connects China with the following countries: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Albania and Macedonia.

The 16+1 format brings a benefit of the possibility of more frequent and regular political meetings, a better insight to the market and an easier entry into it, in Kaczmarski's opinion. For China, a big advantage of the cooperation is that it allows to run a policy, organize top-level meetings with a “large number of relatively small countries.”

“It seems that '16' is becoming a form for which the New Silk Road will provide content,” he assessed.

New Silk Road crossing Poland

A China-Europe freight rail connection is part of the New Silk Road initiative. Trains to Europe go through the Western corridor, via Kazakhstan, Russia and Belarus, or through the Northern corridor which does not go through Kazakhstan. Both routes cross Poland and some trains terminate in Poland.

President Andrzej Duda's November visit in China may prove a supporting factor in the development of mutual economies ties, analysts believe. The visit came at the right time, in the opinion of Polish international affairs institute PISM expert Justyna Szczudlik-Tatar.

“Firstly, we showed the Chinese that after the change of power Poland will continue tightening political and economic relations with the People's Republic of China. The second issue is the president's attendance at the 4th 16+1 summit in Suzhou. This is a meeting at the level of government leaders, while Poland was represented by the president this year,” she says – which encountered positive reactions, in her opinion.

Another positive element was that the president's visit focused mainly on economic issues, Szczudlik-Tatar further said. “This is an absolute priority in our relations. The Chinese Silk Road initiative was the focal point as it is currently the flagship strategy of China's foreign policy,” the expert says. “And Poland's president stressed that we want to participate in it.”

Poland set to enter Asian Infrastructure Investment Bank

Poland's accession to the Asian Infrastructure Investment Bank (AIIB) is to become an important element of Polish-Chinese ties. Poland is yet to ratify the agreement on accession to the bank. During his visit to China, Andrzej Duda gave a signal that Poland wants to participate in this initiative. He also stressed that he would like a Pole to take up a position within the decision-making structures of the bank. Duda touched upon the subject during his talks with China's President Xi Jinping.

The visit of Poland's president to China was, for Chinese, a factor improving the perception of the reliability of Polish enterprises, according to international economic organizations expert at the Warsaw School of Economics, Professor Jerzy Menkes.

“It is about making the partner credible. China very often shows a certain distrust towards businesses from our region, new EU states. The president's appearance is a signal that a given company is a reliable partner,” Menkes explains.

During Duda's visit, he and his Chinese counterpart attended the signing of memoranda: on the agreement between Poland's special-purpose bank BGK and the world's biggest bank ICBC, on the agreement between ICBC and Poland's foreign investment agency PAIiIZ as well as on cooperation in tourism.

Source - Polish Press Agency, Economic Service 


Published by: Justyna Kania
Last change: 15.12.2015