Mutual Investment Opportunity for Mutual Investment Opportunity for Croatian and Chinese Businessmen Croatian and Chinese Businessmen Mutual Investment Opportunity for Mutual Investment Opportunity for

Croatian and Chinese Businessmen Croatian and Chinese Businessmen

Dr. Hongjun Zhao Professor of Economics,

Shanghai University of International Business and Economics

hjzhao2002@163.com

May 12, 2013

Topics

• The Industrial Comparative Advantages for Croatia and China in the past 20 years– Industrial GDP– Sector Growth trend– Trade relation

• Mutual Investment opportunity in the coming 5-10 years

2

I. Industrial Comparative Advantage of both countries in past 20 years

Agricultural value added, as a share of GDP

3

Industry value added as a share of GDP

4

Service value added as a share of GDP

5

Conclusion 1 in terms of national level

• Agricultural share goes down, service share goes up while industry share is fluctuating

• This is in accordance with the industrial revolution law

• Agriculture and industry are stronger in China while Croatian service sector is stronger than that of China

6

The growth rate of Agriculture value added

-8

-6

-4

-2

0

2

4

6

8

10

12

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

ChinaCroatia

7

The growth rate of Industrial value added

- 15

- 10

- 5

0

5

10

15

20

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Chi naCroat i a

8

Service value added annual growth rate

- 10

- 5

0

5

10

15

20Chi naCroat i a

9

Conclusion 2 in terms of sector trend

• The growth rate of agriculture, industry and service sector in China is more stable in China than that of in Croatia

• The growth rate of them in Croatia is more fluctuating

• Why?– government in China plays a stronger role in pushing up

and stablizing economic development

– International capital plays a more important role in Croatia

10

Croatia China trade relation

• Croatia imports much more from China 2011-12

11

Croatia import from China 2012

Commodity Value KG

Parts for household laundry machines $19,185 592

Way-type unit head machine $3,606 369

Refrigerating/freezing chests (other than household-type), cabinets, display counters, showcases & similar refrigerating/freezing furniture

$599,573 100,202

Air-conditioning machines comprising a motor-driven fan and elements for changing the temperature & humidity, window/wall-types, self-contained/"split-system"

$19,386,121 2,654,281

Built-in jacking systems of a type used in garages $157,389 67,625

Other continuous-action elevators & conveyors, belt-type $236,408 8,900

Injection-/compression-types of moulds for rubber/plastics $87,226 7,395

Video-recording/reproducing apparatus, whether/not incorporating a video tuner, magnetic tape-type

$14,105 426

Fixed carbon resistors, composition-/film-type $2,192 39

Household-type refrigerators and food freezers (electrical and other) $5,296,675 1,186,368

Refrigerators, household-type (electric/other), whether/not containing a deep-freeze compartment

$4,710,372 1,027,960

Commodities and transactions not classified elsewhere in the SITC $10,652 N/A

12

Croatia and world business relation

• Export less and import more from the world

13

Travel service as a share of service export

14

Information and communication technology export as a share of service export

15

Conclusion 3

• In merchandise industry and trade, it seems that Croatia is weaker compared to China and other industrial countries

• In service industry and trade, Travel service is one of the strongest advantages in Croatia, why not do more in this field?

16

II. Mutual Investment Opportunity in the coming 5-10 years

• For Croatia, travel will be one of the best strategy absorbing Chinese Tourists– Every year, 47.66 million people go abroad to travel, covering

139 countries and regions, and this number keep growing at 4.6%

17

Croatian Investment Opportunity for China

• For Croatia, welcome Chinese investment in manufacturing industry, energy and transport, communication infrastructure is one of the best strategies in the coming 5-10 years

– Similar historical and cultural background in 1940-1980

– CEE countries suffered a lot from 2009-2011 debt crisis

– 1991-2000, China doesn’t catch up the first round of FDI in central and east Europe

– 2009-2015 will be the second round of FDI

18

Chinese investment in Central and east Europe in 2003-2010, still very low, more potential

19

Croatian’s attractiveness for FDI

20

• We should take use of the platform of Confucius institute to facilitate mutual cultural, business exchange

21