Business News

Trade with China on the Mend after Crisis (interview)

Ljubljana, 08 June (STA) - The global economic crisis affected trade between Slovenia and China in 2009, but a Chinese Embassy official has told the STA that trends have already started to improve owing to joint effort.

Data provided by Yang Hua, an economic adviser to the Embassy in Ljubljana, show that bilateral trade dropped by 18.2% last year from the record high trade of over one billion dollars in 2008.

China's exports were down 18.2% to EUR 770m, while Slovenia's exports fell by 3.9% to EUR 127m last year. However, the situation started to improve in the first quarter of this year.

China exported EUR 266m worth of goods to Slovenia in the first quarter, which is up 54.2% on the same period last year, while it imported EUR 38m, or 56.7% more than in the first quarter of 2009.

"These are positive trends and I hope they will continue in the future," Yang says.

China exports computers and other hardware, household appliances, toys, raw materials for the pharmaceutical industry and telecommunication equipment to Slovenia, while importing chemical and pharmaceutical products, equipment and various components.

"China is aware of the surplus in bilateral trade, which is not good for any side...China is willing to increase imports from Slovenia and has asked for a list of goods for export to choose for its needs."

"However, Chinese companies have unfortunately not found what they need because of the difference in the structure of goods. This way the attempts by the Chinese side have not produced results."

Yang also says that Chinese companies are willing to invest in Slovenia and some are currently in talks with Slovenian counterparts.

"I must say though that in terms of investment, the Slovenians are quite ahead of the Chinese. Some Slovenian companies started investing in China as early as 2004 and work well."

Despite the global crisis, the Chinese economy expanded by more than 8% last year. The Chinese government also has bold goals for this year.

It would like to increase GDP by 8%, create jobs for more than nine million people entering the labour market, keep the jobless rate in urban areas below 4.6% and inflation at about 3% and improve the balance of payments.

"I'd like to say, however, that by targeting an 8% GDP growth, we advocate a reasonable development, while all sectors need to focus on reshaping the model of economic development and restructuring the economy."

Yang does not think Google's decision to move to Hong Kong will affect the conditions for investment in China or "change the fact that foreign companies, including companies from the US, as a rule operate well in China and make profit".

"China will remain an open country, while companies, whether they originate in China or abroad, need to respect Chinese laws as long as they operate in China."

Yang also disagrees with the view that Chinese surplus in trade with the US could be reduced through appreciation of the yuan or that China has been undervaluing its currency to profit in international trade.

"China will continue to act on its own initiative to gradually upgrade the floating exchange rate mechanism of the domestic currency in line with the development of the situation in the country rather than based on pressures from abroad."

China hopes the World Expo, which in May opened in Shanghai, to be a big demonstration of mutual understanding, respect of different cultures and civilisations, cooperation.

Yang says the show will allow Slovenia, which has a 1,000 square-metre pavilion in Shanghai, to become better known among millions of Chinese and other visitors. Expo is expected to attract 70 million people in 182 days.

"There is keen interest in Expo among Slovenians, as we are having more applicants for visas than usual coming at our embassy in Ljubljana these days."

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