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4. Suggestions for the V4 countries
My suggestions arise from implications of BRI and current status of Sino-V4 foreign trade – both were analysed in this paper. Based on available data described in Chapter 2 and regional analysis in Chapter 3, I will try to suggest recommendations for the progress of Sino-V4 trade.
My suggestions should lead to the higher effectivity of the cooperation and to the growth of competitiveness in the global world. These suggestions will focus on competitiveness of V4 countries on the Chinese market and reaching of reciprocity in the mutual cooperation among these regions.
Concerning the trade balance of V4 countries with China, volumes of exports to China remain poor for all of them. Imports from China are growing and the trade balances are getting more negative. The relevance of the Chinese investments is minor in all countries, considering their size and the length of endeavour for deeper cooperation. Additionally, the security risks arise from close cooperation with China.
BRI-related investment priorities find insufficient opportunities from energy and infrastructure sector in V4 countries. The BRI project provides only a little impact on the bilateral ties because most of the projects are non-directly BRI related, apart from railway construction in Poland or Hungary. BRI strategy itself, nor any of multinational projects did not improve bilateral relations of V4 countries with China.
According to the previous analysis, I would like to suggest some recommendations for the progress of China-V4 trade:
1) Liberalization of trade: There are still plenty of trade barriers – duties and other legislative prohibitive measures by both sides. To improve bilateral trade governments could consider free trade area, probably based on the free trade agreement of China and whole EU.
2) Institutional framework and information database on country level: There is no clear institutional framework of BRI initiative, nor overview of strategic intentions of China.
Countries or enterprises face difficulties how to find a partner or where to find the planned projects. The cooperation with China on country level pretends to be flexible but in the end it
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is more beneficial for China. However, in the EU, there is a conservative attitude to China´s intensions, resulting in the lack of promotion of reciprocal cooperation.
3) Development of dialogue: Investments of Chinese state owned enterprises or private companies result from the government policy. State apparat helps them administratively and financially to become international. By a political dialogue with European countries Chinese government indirectly influence the range and industry sectors of investments. Similarly, governments of V4 countries should help their small and medium size enterprises and at the same time continue dialogue with China on both political and economic levels. Without those contacts V4 countries cannot expect relevant business growth.
Governments of V4 countries should include to these dialogs relevant industries for Chinese investments as there are plenty of traditional companies closing their operation from many reasons. The main reason is a need for investment into factories or implementation of modern and more effective technologies to retain their competitiveness. On the other hand, traditional products from V4 countries might be appealing for Chinese investors, for example shoe and clothes industry, porcelain, or glass industry.
4) Social security issue solution: Resulted from the research of Liu Zuokui52, there are no social security agreements between China and V4. In addition, it is difficult for employees from V4 countries or from China to get the visas, work permits, or permanent residence in the partner country (Schengen area of EU). There should be a bilateral agreement on social security issues included in the BRI framework.
5) Support agencies on business level: Trade balance among single V4 countries and foreign trade development is dependent mainly on small and medium size enterprises that lack knowledges about China. However, Chinese enterprises with poor internal management also lack knowledge about the business or technical environment in V4 countries. Without support from the public sector or particular incentives it is very difficult to start export or business in the different regions. It is also very difficult to measure risks connected with trade of investments for both sides. Chinese enterprises additionally have low crisis-prevention
52 (Zuokui, 2016)
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awareness. To facilitate business growth, it would be beneficial to settle agencies on both sides to help all size enterprises with new market entry, to overcome language barriers, culture barriers, etc. These agencies could collect data, provide language and business etiquette courses and effectively connect partners.
6) Multi-level approach: The indispensable part of deepening the cooperation and both-side understanding is in the support of local governments or non-governmental organizations.
Tightening the ties in this way would lead to the better risk analysis, more effective market approach and quicker identification of market gaps for both-side investments or trade.
7) Regional approach: There is no united attitude towards China among V4 countries, although even the whole size of V4 market cannot attract much of China´s attention. There are plenty of similarities among V4 countries: they have educated employees and lower employee cost in comparison with Western Europe, specialization in automotive industry, and they all seek for Chinese investments. Deeper cooperation instead of competition among V4 countries - as practised on EU-level – could bring better position in negotiation with Chinese business partners. Infrastructure or economic projects on regional level would attract more attention from China because Chinese enterprises prefer large projects.
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