Article
Sino-Bulgarian cooperation
Ivailo Kalfin met 12 entrepreneurs from local Shanghai companies during his visit to our town. He introduced the latest economic developments and favorable business environment in Bulgaria. Both sides have seen big possibilities of cooperation in infrastructure, manufacture and energy sectors.
Q: I understand one of the main purposes of your visit this time is to attract foreign investment in China to Bulgaria, so have you reached any agreements so far?
K: In more general term, yes. But otherwise, my visit here to Shanghai is mainly directed to stimulate the interest of business community. We have already some of good examples of Bulgarian companies working here in China, Chinese companies working in Bulgaria, including in long term relations in the industry corporation, in joint production, joint ventures. In 2007 and 2008, there were 2 business missions that were led by the Shanghai federation of industry traveling to Bulgaria. I have seen the representatives of the business community that have been in Bulgaria. Many of them have some very concrete ideas, some very concrete plans for the future. Of course, they were interested about the market economic situation in the country, the effective of economic crisis to push back what we have for this year. And I think that, at the end of this meeting, both representatives of the business community and myself agreed in conduct that the economic difficulties are very important to stimulate for looking for new markets, new partners, and new products. And largely involvement of Chinese companies in Bulgaria is exactly in that direction.
Q: You mentioned these potential investors or companies in China are interested in knowing the specific market condition in Bulgaria amidst the global economic recession, so what is the current situation like in Bulgaria in terms of economic growth and environment for investment?
K: Bulgaria has been the fastest growing economy in the EU for the last year. Again, for the last years, this is the country within the EU attracting most of the foreign direct investments. Compared to the size of the economy, about 20%-22% in the last 4 years of the GDP is foreign direct investment.
Q: In terms of attracting foreign investment, what are the sectors that are most in need of foreign investment that you see Chinese companies have an advantage or edge, is it infrastructure, because you mentioned infrastructure?
K: One of them is definitely infrastructure, because this is Bulgaria’s location, in South-eastern Europe, you have quite a lot of roads go into Bulgaria, both marine roads, lodges, and railways, and also river transportation. We have a long border with longest navigable, in Europe, the Danube River. So anything which is related to infrastructure, and there will be expenditures in coming years, quite substantially. In this sector, it is going to be interest for the Chinese companies I guess. Another sector is energy sector. Bulgaria is the country in south-eastern Europe which is producing most, this is the largest producer of electrical power in south-eastern Europe and practically we are exporting to all the countries in the region. We have substantial energy projects in Bulgaria including, we have our nearly 40 years of experience in nuclear power plants in Bulgaria, thermal power plants, now we are developing renewable energy, so this is one of the possible sectors to cooperate with Chinese businesses, the solar generation, wind generation, power generation. In terms of environment, we have already a Chinese company with has won attendant in Bulgaria for 86 million euro for an environment project related to thermal power production. I see many innovative Chinese companies that might venture in developing new products and new projects with Bulgarian companies.
As an export country, 60 percent of Bulgaria’s export is directly to European markets. With the falling demand from Europe, Bulgaria’s production and export are now severely shrinking.
Q: We know China and Bulgaria are traditionally export economy, but in order to combat global recession, Chinese government is redirecting its economic growth by boosting domestic consumption. But it seems like you are still trying to expend your export volume. That would be very hard though at this time.
K: That’s the difference in the sizes of economies.
Q: Right. How are you going to achieve that?
K: You have a large population in China and you can boost domestic demand. In Bulgaria, according to the European standards, we are a mid-ranged country, but the whole population in Bulgaria is less than 9 million people, so domestic consumption besides the government spending is not a strategy that should be followed. It is difficult indeed to boost export, but in the financial and economic crisis pressures the companies, pushes the companies to be more innovative and to look for new markets and for new partners. So, when I speak about boosting exports, I mean developing and devising new products that are going to expand the market. Here, I see a very good thing, because I would have many arguments that Bulgaria is probably the best place to enter the European market if Chinese producers would like to step on a long term on the European market, then a partnership with Bulgaria would be very recommendable, and I’m sure that would be a success.
Q: So, would you say to a certain extent the economic crisis is actually having a positive impact on Sino-Bulgarian business relationship?
K: I think that it is pressing the businesses to look for new opportunities and the opportunities are there, if somebody looks for them, they are going to be found.
Q: And be more creative.
K: Be more creative and even I wouldn’t say that we’ll have to invent, I mean this is not rocket science, I mean this is the normal development of the business, just the opportunities are there, what is lacking maybe more information, that’s why I very much encourage these business missions to Bulgaria and to China. We are going to participate in the Expo 2010, trying to present also the potential to put opportunities in Bulgaria. I think what we lack is knowing better the possibilities in both countries.
The current economic downturn is a global crisis and needs genuine global solution. Though major economies and emerging countries face different problems, all the governments have the same priority at the moment -- bringing confidence back to the markets.