Interview with Mr. Anton Donchev, Director at Bulgarian Automotive Industry EAD; Official representative of CPC Europe and Ilinden EOOD for China and executive director of JRX CPC Beijing Co., LTD; Member of the Supervisory Board of the European Chamber of Commerce in China.
– How have the economic relations between China and Bulgaria changed in recent years?
– If we look further, economic relations change over time. The 1970s were a complete lull as there was almost no other relationship between the two countries. We’ve never officially broken up, but this is a special time. The 80s saw the beginning of recovery and rapid development of economic relations. Back then, everything was based on barter – the two countries were behind the exchange of various products. After the changes, of course, since the transition to a completely new market principle, the beginning of the 90’s things were rather quiet. In the second half of the 1990s, things began to fall into place, with relevant relationships in the banking sector as well.
In recent years, trade has developed relatively successfully, commercial exchange is quite serious. Unfortunately for Bulgaria, we have a very serious negative trade balance. However, there is a lot to do, Bulgaria has products that could be sold on the Chinese market. We are not talking only about agricultural products, but also about products from engineering, products of light industry, etc.
– Are the Chinese interested in investing in Bulgaria?
– Of course, Bulgaria is an interesting investment destination. China is interested in Europe. At the moment, however, Chinese investors operate entirely on the market principle – ie. like every single big investor they go and explore all the possibilities of every single country. They approach like any Western investor.
In any case, with the right policy, Bulgaria can be quite an attractive destination for Chinese investments. Conditions are still offered in Bulgaria that could help some Chinese companies enter Europe. Relying on Bulgaria only as a market is pointless, but our country can be a good production base. Indeed, some of the costs are actually cheaper than in China. But it is very important to say that all the countries around us are competing for Chinese investors – Romania, Bulgaria, Serbia (nothing that is in the European Union) and Turkey. For every single Chinese project, we compete with all these countries.
– What are the main projects you are currently developing?
– Our main projects are in the automotive industry. The first is based on our partnership with Great Wall. With them we continue to develop the market, we continue to show new models. At the car show in Sofia this year, we showed two new models, one of which is a hybrid. Within two years, we hope to introduce the Ora brand, which is fully electric, and shortly after that, the company’s higher-end brand, Vey.
In addition, we are also working on the restoration of car production in Bulgaria, considering the restoration of fully electric car production. There is an opportunity to realize this on the basis of the plant in Bulgaria.
Our other partnership is with Yutong Bus Company – the largest bus manufacturer in the world and the largest electric bus manufacturer in the world. Together with them, we were pioneers in the electrification of public transport in Bulgaria – the first electric buses 4 years ago in Sofia were owned by “Yutong” and they are still operating. Since then, we have already implemented electric buses in both Pleven and Burgas. With them, we offer not only the buses themselves, but also the charging infrastructure, a monitoring and control system, etc. There have been talks for several years about the realization of a production base for Europe in Bulgaria, talking about the production of fully electric buses. But there, too, we have to fight competition from other countries.
The company also has a development for hydrogen buses that served the Winter Olympics and the city of the Olympics. Hydrogen buses still operate there.
Another interesting sector in which we can see working cooperation between Bulgaria and China is energy. Personally, I am an advisor to perhaps the largest company in the field of energy. We participate in tenders for large projects in Bulgaria.
– What can small Bulgaria offer to the big Chinese market?
– Bulgaria is well known for some of the products we produce. In the field of mechanical engineering, we have very good opportunities. We export to China large machines manufactured in Bulgaria. In the field of agriculture, we are talking about exporting processed agricultural products directly. We can also talk about other things like cosmetics, wine for example. Bulgaria has something to export, it has something to offer to the market.
However, the market is huge and has its own specifics. It’s quite tricky to get into for this very reason. Here the situation gives a priority to the bigger companies, not only for the foreign ones, but also for the Chinese ones. It is very difficult for a small or medium-sized company to break into the market simply because its capacity is not enough. This is one of the problems we see quite often in the European Chamber of Commerce. For this, we have created many centers to support small and medium-sized businesses.
What I would advise all companies to do is to do their homework and rather approach the relevant institutions to give them the right advice before they start entering the market, not after. We at the Chamber have such a platform, which is extremely accessible and free, and we can give advice on how to proceed. You have to be ready before you come, not put out the fire afterwards. In all cases, time is required, but it is not impossible.
The state must also play its role, especially in some sectors that really need support. For example, in the case of wine, other countries make great efforts to promote their products and spend a lot of money. A few big players from Bulgaria should be selected, who have the volumes and capabilities to pave the way for the others. This strategy is also seen in other countries, mainly so that they can meet the volume and demand requirements of the Chinese market. We see as an example Australia, Chile, South Africa, New Zealand. Once people know about the state, things come automatically for the smaller producers as well.
There is a way to achieve it with the joint efforts of the producers and the state. In this area, the state has a very big interest, because with every single bottle of this product, the state is advertised. Each bottle goes to one table, where 4-5 people will learn about Bulgaria. The commercial effect of a few million bottles of wine will not be huge, but as a promotion of the state – it will be a unique effect. Several million people will understand that something good and quality is being done in Bulgaria.