GOOD relations with China can bring Slovak businesses the opportunity to profit from trade with one of the world's fastest growing economies, experts say.
"China's attitude towards Slovakia is pretty much the same as towards other countries of Central and Eastern Europe," said Rastislav Šulla, chief advisor with the Economy Ministry, adding there are currently no significant problems in the relationship.
According to the ministry representative, China is already Slovakia's most important trading partner out of all developing countries. Its enormous market, amounting to over a fifth of the world's population, reaching an average annual GDP growth of 8 percent over the last decade, offers enormous opportunities, said Šulla.
"In the future it's important to focus mainly on informing our companies about the Chinese business environment and export opportunities and increasing investment of our companies in China," said Šulla.
An OECD paper called "Trends and Recent Developments in Foreign Direct Investment" released in June shows that last year China became the world's foremost recipient of FDI, ousting US - the traditional leader - from the top position.
"According to national sources [FDI] stood at almost đ€46 billion in 2002 - its highest level ever - making China the world's largest recipient of FDI. Judging from preliminary data for the first four months of 2003, significant further increases are likely this year," the report reads.
Although Chinese investment in Slovakia is insignificant for the time being, the situation is likely to change in the years to come.
"After Slovakia's entry into the EU [planned for May 1, 2004] it will without any doubt be more attractive for Chinese businesses, mainly due to the possibility of penetrating into other European countries. We can therefore expect increased Chinese investment in Slovakia," said Šulla.
Slovakia has a negative balance in its trade with China. Statistics show Slovak exports are made of especially metallurgical products, electric motors and generators, and other industrial products, as well as wood or antibiotics.
Imports from China include industrial machinery and vehicles; however, consumer items such as food, computers, toys, bicycles and clothing also represent a significant part.
"Chinese products are attractive because of their low price. The quality varies, but given the consumers' low purchasing power that is not the main criterion," said Šulla.
by Lukáš Fila
7. Jul 2003 at 0:00