Bulgaria: rich Chinese plans, poor reality

Chinese President Xi Jinping and his wife Peng Liyuan pose for photos with Bulgarian President Rumen Radev and his wife in Beijing, July 2019. Source: xinhuanet.com

Bulgaria was the second country in the world (after the USSR) to establish diplomatic relations with the New China, and this fact, as well as many other acts of friendship and support during these years, created a fruitful atmosphere for more than good relations between the two countries.

China is traditionally Bulgaria’s largest trading partner in Asia. In recent years, Bulgarian exports have grown to double-digit figures, making China the second-highest after Turkey among the export partners of Bulgaria outside the European Union.

In Sofia, China opened a new embassy, in 2018, which is the largest diplomatic building in Bulgaria after the US Embassy, which is the largest in the Balkans.

China’s economic presence in the country, though, remains limited compared to other Central and Eastern European countries, marked by unfulfilled plans when it comes to infrastructure projects.

However, Chinese promises of investment and the growing domestic political impetus for greater bilateral engagement, which promotes Beijing’s economic, digital technology, media, and cultural activities in Bulgaria, are constantly highlighted.

According to the latest official statistics of the Bulgarian National Bank for 2019, China’s investments in Bulgaria are of EUR 130 million.

According to the information provided by the Chinese Embassy in Bulgaria (based on data provided by Chinese companies), by the end of 2019 Chinese investments in Bulgaria go higher than € 700 million, including investments coming through Luxembourg, the Netherlands, Hong Kong etc.

According to China Global Investment Tracker, there have been only USD 460 million investment contracts from China in Bulgaria over the last 15 years.

So there is a serious discrepancy between the official investment data depending on which country provides the information: Bulgaria or China?

However, based on three different statistics, the amount of Chinese investments in Bulgaria is low compared to other major global financial players.

Truth be told: most of China’s largest planned investments in Bulgaria either failed or remained in the planning area.

On the other hand, if only one of the potential investment deals would be materialized, this would completely change the situation. For example, if China National Nuclear Corporation (CNNC) invests the planned EUR 1 billion into nuclear plant, it would turn China into the number one investor in Bulgaria.

The Bulgarian Trade Register database shows that there are about 1,500 companies with Chinese participation in Bulgaria. Among them are many restaurants, trading companies and more.

Up until 2010, Chinese investments in Bulgaria included only one glass factory, one solar energy park and TV and air-conditioning plants. Overall, the Chinese capital for the 1996-2010 period amounts to only EUR 17.5 million.

In 2011, the Asian country’s investments in Bulgaria had already exceeded $ 70 million, after the Chinese also entered the automotive and agriculture sectors.

According to the current Chinese ambassador, the Chinese permanent residents in Bulgaria are no more than 2,000, but unofficial sources claim that there are more than 10,000 Chinese nationals in Bulgaria on a permanent basis.

Three Bulgarian universities offer Chinese language studies as well as numerous secondary schools in all major cities of the country.

So far, 22 Chinese companies have officially registered their investments in Bulgaria, 6 of them in Sofia, according to the embassy. The main sectors are information technology, agriculture, car manufacturing, renewable energy and some others.

 

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