The Slovenia Times

Time to Make Haste



The general perception of the Slovenian-Chinese bilateral relationship is positive as noted at a round table, in May, marking its twentieth anniversary. During this time, "the two sides have signed several bilateral cooperation agreements in the areas of politics, the economy, culture, defence, to name but a few," emphasised the Chinese Ambassador, Zhang Xianyi, who was one of the honorary speakers at the meeting. "The bilateral economic and trade cooperation has borne remarkable fruit."

Skyrocketing Numbers

Trade volume has seen an astounding increase - at the beginning it was USD 11m and by 2011 it had reached nearly USD 1.9bn, 163 times higher than in 1992. "In the past 10 years, the exchange of goods has tripled," said Samo Hribar Milič, President of the Chamber of Commerce and Industry of Slovenia. Statistics show that the trade between the countries has increased consistently. In 2004, when Slovenia entered the European Union, the total value was nearly EUR 178m and the figures have been rising significantly until this very day. "Exports have increased and more and more Slovenians invest in China as it also provides access to other large markets," observed Hribar Milič. An interesting aspect here, however, is that Slovenia's export of goods has been significantly smaller than its imports (EUR 88.7m compared to €509.5m). Slovenia's top three export products in 2011 were parts for electric motors; electrical lightning or signalling equipment; and pumps and compressors; with imports including heterocyclic compounds, diodes and transistors and automatic data processing machines.
However, despite the promising results of the past, there is still a lot of room for improvement and further boost to cooperation. In the future, the Chinese wish to invest in Slovenian infrastructure, especially in the Port of Koper and the railway and in the green economy, i.e. future technologies such as solar and biomass energy. Slovenians see their investment opportunities in the pharmaceutical, automotive, electrical and chemical industries; green technologies and ITC information technology; and logistics - according to Jordan Berginc, co-founder of the Slovenia-Chinese Association. Slovenia's greatest opportunities lie in trading its intellectual property and cooperation at the scientific level. "Our two countries should better seize the opportunities, deepen the economic and trade cooperation, work together to seek mutual benefit, common development and win-win situations," said Xianyi, who went on to stress that both countries have their advantages in technology and good ideas. "Cooperation in the fields of infrastructure development, investment and tourism is complementary in the two countries."

Slovenia's Position is the Key

According to Xianyi, Slovenia is a very important country in Europe: "You are small but big at the same time. The country has a very favourable geographical position and could become a bridge between China and the EU and a vibrant regional hub." Currently, Slovenia is the top trade partner of China in the region of the former Yugoslavia.
As stated by Hribar Milič, China has a great ambition to penetrate the European market and Slovenia should seize the opportunity. In recent years, the initiative of Chinese enterprises for cooperation has increased and more and more Chinese business missions are coming to Slovenia in search of opportunities and vice versa - "every week we get reports about Slovenians who are starting business in China," said Hribar Milič. Currently, there are more than 30 Slovenian enterprises in the Changjiang Delta region making it the largest gathering place for Slovene entrepreneurs in Asia. This and the fact that China still attracts more and more foreign investment from all around the world proves that the increase in workforce costs has not affected its competitiveness. "Things have changed but the fact that our workforce is well-trained and that our infrastructure is very much mature remains," commented Xianyi.

Part of a Bigger Plan

In April, the Chinese Premier, Wen Jiabao and the Slovenian Prime Minister, Janez Janša, met in Warsaw and Wen made public "China's Twelve Measures for promoting friendly cooperation with Central and Eastern European countries". The programme includes the establishment of a USD 10bn special credit line with a focus on collaboration projects in areas such as infrastructure, high and new technology and the green economy. They plan to set up an investment cooperation fund between China and Central and Eastern European countries with the goal of raising USD 500m in the first stage. China will send trade and investment promotion missions to the region and establish one economic and technology zone in each country in the next five years. "All these measures have created rare conditions and opportunities for economic and trade cooperation between China and Slovenia," said Xianyi, expressing hope that both sides will grasp the chances and try to achieve concrete results as soon as possible.

Obstacles Ahead

The prospects seem good and the meeting of premiers in Warsaw signals the enhancement of economic and trade cooperation with an expansion in the scale of mutual investment. Yet the basis for the future needs to be worked on and strengthened. One cannot disregard the fact that Slovenia is famous for its extremely restrictive regulation and in order to attract more Chinese investment it will need to be eased. "The Chinese are eager to explore this market but we will have to show more flexibility," believes Berginc. Xianyi sees this also as an important aspect for overcoming the crisis: "Slovenia's economy needs to be revitalised and one of the ways to get it moving can be an adjustment in the trade policy."
In addition to this, cultural differences are viewed as a major potential problem in the establishment of successful and fruitful cooperation. "As the two countries have different national conditions, social systems and cultural traditions, it is sometimes hard to understand each other," stressed Xianyi. "Also the way of doing business is different, so cultural exchanges especially learning each other's languages, is the platform to work on in order to promote the friendship and understanding of the two nations."
In Berginc's opinion the situation requires urgent action: "The Chinese greatly respect Slovenia and traditionally trust us. This is very important and Slovenia should make the best of it but there seems to be confusion and disorganisation in communication at the top." He appeals for a concrete government's plan and further recognition of the importance of a good relationship: "We are in the pioneering phase on our way to maturity. There are many ideas about how to boost and fasten mutual cooperation but action needs to be taken - now! If we keep on waiting, others who are more open and adaptable will get ahead and our chances will be lost forever."


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