China sets up US$10 billion credit line with European nations

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Sunday, April 29, 2012

Wen Jiabao

China has pledged US$10 billion in credit to back joint projects with Central and Eastern European countries. Visiting Chinese Premiere Wen Jiabao announced the deal at a business forum in Warsaw, Poland, and said he hopes the deal will facilitate the two sides' cooperation.

To boost business and trade, Wen said that China wants to help with infrastructure projects, including new technologies and green economy sectors. Also discussed at the Economic Forum was a new investment cooperation fund which would initially boast US$500 million to assist Chinese investments in the region. He also announced a plan to expand the Chinese market with other countries with hopes to build trade exchange to US$100 billion before the year 2015.

"China will work with countries in Central and Eastern Europe to mutually open the markets and to increase the trade exchange to $100 billion before 2015," Wen said.

He said trade volume between China and central and eastern European countries reached 52.9 billion US dollars in 2011 and had grown 27.6 percent a year on average since 2001, when it was only 4.3 billion US dollars.

Thus far, the largest Chinese investment has been a 1.2 billion (US$1.6 billion) deal made by China's Wanhua Industrial Group that gained full control of Borsodchem, a Hungarian chemicals firm. Other recent investments were made in Serbia, where a €170 million (US$225 million) bridge was built over the Danube river in Belgrade.

Prime Minister Donald Tusk of Poland happily welcomed the Chinese investment, noting the country's uprising economy and European leadership role. Both Wen and Tusk enthused about the potential they say their partnership has and encouraged others in the region to form similar agreements.

The Chinese are "very pragmatic" in business, Andrzej Pawelec of Agrihortus company said, who is seeking new partners in China to sell its beverages. "If they see a good and honest business proposal, they are always open."

Wen started his official visit to Poland on Wednesday. Poland is the last leg of a four-nation Europe tour that included visits to Iceland and Sweden and the opening ceremony of the Hannover Fair in Germany.


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