beyondbrics

According to an academic study, countries that host the Dalai Lama tend to see their trade ties with China suffer – but only for the following two years. Poland, whose leaders last met the Dalai in 2008, is now seeing its relationship with China improve, as the study would suggest.

A high-level Chinese delegation is visiting the country this week, headed by senior political advisor Jia Qinglin (pictured, with Polish President Bronislaw Komorowski). Although Poland may lack the natural resources of Africa and Latin America, it does have three key attractions for Chinese investors.

One is the enormous infrastructure investment that has turned Poland into Europe’s largest building site. Some €67bn ($94bn) in EU structural funds are pouring into the country during the current 2007-2013 EU budget cycle, spurring it to make up centuries of poor roads and railways.

In an interview on Wednesday with the FT, Magdalena Jaworska, the deputy head of the GDDKiA, the government road-building agency, says that without EU, Poland would only be building about a third of the highways and expressways currently under construction. Those contracts have already attracted Chinese interest: China Overseas Engineering Group, one of the country’s largest engineering companies, is building two segments of the A2 highway running from Berlin to Warsaw.

The Chinese are also interested in using Poland as a beachhead for penetration of the larger EU market. That was the case of telecoms giant Huawei: it helped build Poland’s fourth mobile telephone network for Play in 2008, and used that experience to become a serious player across the continent.

The third factor is Poland’s domestic market of 38m consumers, who have continued to spend strongly in spite of the downturn that drove the rest of the EU into recession last year. China’s Foton tractors and Grand Tiger pickup trucks may soon be assembled in Lublin, in eastern Poland, in partnership with Poland’s Pol-Mot.

Poland’s trade relationship with China, which amounted to $9bn in 2009 and $10bn in 2008, can’t match Germany’s. But it has been resilient to the global crisis – and political sensitivities. That may be no bad thing, given that the Dalai Lama says he now hopes to return to Poland more frequently.

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