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March 27, 2023

Chinese businessmen cautious about investment environment in Romania

Gabriel Ghelmegeanu, president of the Romanian-Chinese Chamber of Commerce and Industry, underlines that this feeling is not caused by the crisis, but by the disinterest shown by state authorities.

What are the Chinese investors’ perceptions of the Romanian market in these moments that are still unclear because of the crisis that has received a lot of media attention? Is there trust in the Romanian economy and openness from the local authorities to the investors?

The Chinese investors are cautious about the Romanian market and it’s not because of the crisis. From their and our Chamber’s point of view there are numerous opportunities. There is no openness from the Romanian state because most of the funds that China wants to invest in Romania are ‘state funds.’ And private investors know the Chinese state’s ‘lack of success’ when it comes to investing in Romania so they are cautious.

The investors have often blamed certain obstacles they face within the local business environment. Did you notice improvements in this sense?

I haven’t noticed any improvements. And in the relationship with China in particular I have noticed a complete disinterest which amounts to a worsening of the investment environment for Chinese businessmen.

A significant part of the foreign-capital companies included in the Registry of Commerce consists of SMEs. What do you think their outlook will be considering that starting this year they will be taxed like any other companies through the application of the 16 per cent profit tax or of the minimum tax, without them being ale to opt for the 3 per cent income tax?

Generally the companies with Chinese capital are all part of the category of companies whose profit is taxed with 16 per cent, so they are not affected by the provisions of this law.

Many investors are interested in public-private partnerships. Are there projects currently run by Chinese businessmen or are there plans for this year? And in what domains?

The Chinese investors are truly interested in public-private partnerships in sectors such as infrastructure, energy and agriculture, but that is not enough. We are not convinced that the authorities have the desire to form public-private partnerships with the Chinese side nor that the Romanian authorities have a strategy towards China in that sense.

2003 and 2004 were the most prolific years in what concerns foreign investments in Romania. From the data you have at this moment, what was the volume of Chinese investments in Romania in 2009 and what were and continue to be the domains of interest for them?

We estimate the Chinese investments at approximately EUR 20 M in 2009. They are very low (below EUR 300 M from 1990) and that is because the relationship with China is completely different compared to relationships with other countries. In China most of the goods belong to the state. So the interest of the Chinese state has to be drawn in first and it will be followed with confidence by private investors! The domains of interest are: the tobacco industry, wood industry, bicycle production and commerce.

What are the geographical regions on which the Chinese investors focus?

Summing up the things mentioned before, the Chinese investments will come anywhere in Romania, wherever the authorities desire and wherever they get involved seriously, not just at rhetorical level like they did until now. Otherwise we will only have the ‘Red Dragon’ outside Bucharest and the investments in Buzau, Hunedoara and Ialomita Counties, in other words very, very little compared to the Chinese side’s potential and real desire!

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