Introduction

A recent heyday of China-Central and Eastern Europe (CEE) seem to provide an impetus to improve China-V4 economic cooperation. But China goes beyond V4 and embraces in its policy towards the region more countries -16 states from the region Central and Easter Europe embraces[1]. The PRC argues that despite the fact that these states are different from each other and not all of them are EU members, they are former socialist countries, maintaining long-term cooperation with China without significant contentious issues. In this context its convenient simplification that V4 countries are seen as a part of CEE region. On the other hand, V4 countries are members of the European Union. Hence, the PRC’s policy towards V4 countries is embedded in the framework of EU- and CEE-China relations. In this circumstances, China’s policy towards V4 is defined by its policy towards the EU as well as the strategy known as “China’s Twelve Measures for Promoting Friendly Cooperation with Central and Eastern European Countries”, announced by Prime Minister Wen Jiabao in Warsaw, April 2012, a year later updated in the document “The Bucharest Guidelines for Cooperation between China and Central and Eastern European”.

China-V4 cooperation after political transformation is perceived in Beijing and V4 countries mainly as a time of mutual neglect. V4 states were focus on political and economic transformation and their aspiration to join NATO and the EU. Increase of bilateral relations was observed in early 2000s, after V4 countries jointed EU. A signal of PRC’s rising interest in the region were Hu Jintao’s visits to Poland and Hungary (first ever PRC’s Chairman visits to both states), June 2004. But the most significant China’s raise of interest in V4 countries is noticeable in recent two-three years, with high-level visits to Central Europe and announcement of “12 Measures” strategy[2].

The most important area of China-V4 cooperation are trade and investment. This trend was confirmed during the crisis. China perceives Central Europe as a region with rather stable economic and situation. Location in the center of Europe, EU membership, relatively cheap but well-educated labor force, and increasing investments incentives are factors which attract Chinese business for its greater presence in V4 countries. Apparently, CEE is perceived in Beijing as a good destination for further implementation of “going out” strategy. But V4 countries look for enhancement of economic cooperation with China as well. Countries of the group look for new export markets and China seems to be one of the most prospective beyond Europe. They also look for the inflow of Chinese investment, especially greenfield FDI. Growing interest of PRC in the Central and Eastern Europe provides a good momentum to fill the prospects for improvement of economic cooperation with more trade turnovers and more investment flows.

China-V4 Trade

V4 countries has been taking only a small share of the EU-China trade. According to Eurostat, in 2013, the total value of EU27-China trade was €427.2 billion, while the value of V4-China trade was €28.5 billion. Hence, V4-China trade represents 6.7% of EU27-China trade (chart 1). Trade turnovers are also unbalanced: V4 exports to China were about €6.1 billion, while imports from the PRC €22.4 billion. V4 records a trade deficit with China, which last year reached €16.3 billion. The largest trade deficit is in case of Poland - €6.880 billion, while the lowest in case of Slovakia – only €873 million (chart 2).

Chart 1: Share of the EU27 trade with China by V4 country

Source: Eurostat

Among the V4 countries Poland is the largest trade partner of China. In 2013 Poland-China trade volume reached €10.058 billion (exports €1.589 billion, while import €8.469 billion). Czech-China trade value was a little lower than in Poland’s case: €7,727 billion. Czech exports to the PRC was about €1.445 billion, and imports €6.282 billion. Hungary trade volume with China last year reached €6.605 billion. Hungary exported to China products worth of €1.436 billion and imported goods of €5.169 billion. The lowest turnover was noticed in Slovakia economic cooperation with the PRC. In 2013 bilateral trade reached €4.067 billion: exports of €1.597 billion and import of about €2.470 billion (table 1).

Chart 2: Trade balance of V4 countries in trade with China (in € million)

Source: Eurostat

[1] Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Macedonia, Montenegro, Lithuania, Latvia, Romania, Poland, Serbia, Slovakia and Slovenia.

[2] Kong Tianping, “Changing World and the China-CEE Relations”, Speech given to the Meeting Point in Embassy of the Republic of Poland, 27 February 2013, p. 2-4.