Žurnal in English
WHILE ACTIVITIES OF CHINA WORRY THE WESTERN COUNTRIES: The Chinese have become the favorite partners of the authorities in the RS
Representatives of the G7 member countries expressed concern about the economic activities of Chinese companies, and the French minister of finance stated that the entire world economy is in danger of being oversaturated with cheap Chinese exports. On the other hand, various goods worth BAM 1.033.207 entered BiH from China last year, but there is no concern. Moreover, the Chinese are becoming the favorite business partners of the authorities in BiH, especially in the Republika Srpska.
There is growing concern about the economic activities of Chinese companies in the European Union and other Western countries. French Minister of finance Bruno Le Maire recently stated during a meeting with his colleagues from the Group of 7 countries that the entire world economy is in danger of being oversaturated with cheap Chinese exports.
The representatives of the G7 member countries agreed that they should “react to harmful practices and consider taking steps to ensure a level playing field.”
This is another sign that the attitude towards Chinese companies and trade with Chinese partners is changing. According to world media, the leading industrial countries are uniting to resist the challenge of excessive Chinese production capacities, which they say threaten their domestic producers.
One of the recent measures was the introduction of high European Union tariffs on Chinese electric cars, a move earlier taken by US President Joe Biden.
CHINESE ARE THE FIRST CHOICE OF AUTHORITIES IN RS
When it comes to Chinese exports to countries in this part of Europe, there is also growth, including in Bosnia and Herzegovina. According to data from the Indirect Taxation Authority, goods worth BAM 1.033.207.000 entered Bosnia and Herzegovina from China last year. This is more than double the amount compared to 2020, when goods worth BAM 477.724.000 were imported from China.
However, European and Western concerns are not shared by countries like Serbia and BiH. In the wake of Chinese President Xi Jinping's recent visit to Serbia, where relations between the two countries were further strengthened, it was announced that the Chinese multinational company Zijin Mining Group is planning a large investment in Serbia.
According to media reports, Zijin Mining Group is a company engaged in ore mining. In Serbia, they plan to increase copper mining to 450.000 tons per year and aim to boost gold mining, potentially raising annual output to ten tons.
Meanwhile, economic analysts and politicians, guided by precise data, warn that Serbia is increasingly sliding towards debt slavery to China.
The politics of the Republic of Serbia and its president, Aleksandar Vučić, regarding relations with China and Chinese companies, is closely followed by the BiH’s entity Republika Srpska.
It is noteworthy to mention the reconstruction of the main road Foča - Šćepan Polje, which connects Bosnia and Herzegovina with Montenegro, and which has been referred to as the “road of death” for a very long time.
The State Minister of Communications and Transport, Edin Forto, recently spoke to representatives of the World Bank in Washington, emphasizing the importance of financing this road.
“It is very important to me that they lead the project of connecting the capitals of BiH and Montenegro, especially the road that leads through Šćepan Polje. This project needs one hundred million euros in addition to the non-reimbursable European funds required”, said Forto.
While the state minister is discussing the financing of this expensive project with the World Bank, the authorities in the BiH’s entity Republika Srpska prefer to include Chinese partners in the entire project, even if it proves more costly for the budget.
The Prime Minister of this entity, Radovan Višković, admitted that the RS Government favors China Road and Bridge Corporation (CRBC) as a potential contractor for the construction of this motorway, estimated to be worth around 100 million euros. The funds are expected to be provided by the Chinese Exim Bank. After signing a memorandum with representatives of this Chinese company, Višković practically admitted that this arrangement gives CRBC an advantage in the contractor selection process.
“The memorandum implies that CRBC will provide financing, and the contractor will be selected based on a public call. When you have secured financing, you also have an advantage in the public procurement itself”, said Višković.
How and whether they will legally implement these announcements is not yet known, but this is another clear sign that the authorities of this entity are increasingly turning to Chinese companies and creditors.
In this regard, entity president Milorad Dodik recently held a meeting with the Vice President of Huawei for Europe at the Jahorina Economic Forum and announced the possibility of further cooperation.
The Minister of Energy and Mining of the Republika Srpska entity in Bosnia and Herzegovina, Petar Đokić, also had specific meetings. At a meeting with representatives of the Chinese company TBEA International Engineering, he emphasized that the goal is to establish cooperation with the aim of finding a suitable long-term partnership model.
This company, as reported, primarily deals with the reconstruction and development of distribution and transmission networks. Additionally, they implement projects in the fields of renewable energy sources, energy storage, coal exploitation, and the construction of thermal power plants.
CHINA ALSO INTERESTED IN PROJECTS IN FBiH
Although Chinese companies and creditors are more present in the Republika Srpska, they do not ignore the other entity, the Federation of Bosnia and Herzegovina.
According to reports of the portal CAPITAL, the Chinese company Norinco International plans to buy an 80 percent stake in the Stolac company Aurora Solar from the Nikolić family in Banja Luka. The Government of the Herzegovina-Neretva Canton granted Aurora Solar a 30-year concession for the construction of a solar power plant worth BAM 200 million with a capacity of 125 megawatts.
This purchase is expected to be realized through their branch in Hungary for 13 million Euro (BAM 25.5 million), with the estimated value of the complete investment being 109.86 million Euro (BAM 214.2 million). According to the concession and plans, the solar power plant is to be built on Komanje Hill near Stolac, where the Nikolić family has acquired more than 146 hectares of land.
The interest of Chinese companies in solar energy is further evidenced by the recent meeting between the acting Director of the Foreign Investment Promotion Agency of Bosnia and Herzegovina (FIPA), Marko Kubatlija, and a delegation from VEICHI Electric. The delegation was led by President Mr. Song Qixun, alongside Dajana Majmunović, the director of the Chinese company HD Razvoj, and representatives of the China-European Association for Technical and Economic Cooperation (CEATEC).
As reported, the meeting focused on promoting the use of solar energy and exploring potential development opportunities in the market of Bosnia and Herzegovina.
The caution required in conducting business with Chinese partners is exemplified by the case of the never-built Block 7 of the Tuzla Thermal Power Plant. According to media reports, Elektroprivreda BiH terminated its contract with Chinese partners after several years of bureaucratic delays, resulting in the waste of millions of marks of public money.
The initial project for Block 7, originally planned at 370 MW with a value of BAM 760 million, eventually expanded in scope over time to reach BAM 1.5 billion for a capacity of 450 MW. These specifications favored the Chinese partner.
Almir Muhamedbegović, an energy expert, emphasizes that this project was never considered secure:
“We reached a point where in 2014, the FBiH Government began promoting a project for Block 7 with a capacity of 450 MW, which was estimated to cost nearly 1.8 to 1.9 billion marks with all guarantees considered. Throughout this process, it was evident that the project was never secure. Ultimately, with Chinese contractors, you always have to be cautious about what might happen. They are large players in the energy sector, they know how to complete projects, they may seek additional profits if they perceive an opportunity to do so, much like anyone else.”
Let's remember that Chinese investments and loans in BiH primarily target the transport, energy, and metal sectors, often accompanied by controversies, suspicions of corruption, favoritism, lack of transparency, delays, and protests from activists. These are usually classic borrowing that will be paid by taxpayers, while traditional investments are less frequent.
Reports of billions in Chinese investments are relative; actual investments since the post-war period do not exceed 18 million marks. Everything else are investment loans tied to the involvement of Chinese companies and workers.
Analyses indicate that Chinese economic investments are closely intertwined with politics, and that Chinese influence distances Western Balkan countries from the European Union.
WHY IS DODIK'S ANXIETY INCREASINGChinese Seek State Property as Collateral for Business in RS
CHINA IN BOSNIA AND HERZEGOVINAEconomic Interests and Strategic Positioning in the Region?
(zurnal.info)
