28
Thu, Mar
72 New Articles

China Continues to Invest in Poland

China Continues to Invest in Poland

Poland
Tools
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Based on available data, 2019 saw a significant drop in Chinese investment in Europe. The latest estimates by Rhodium Group show that Chinese investments in Poland for 2020 amounted to $1 billion, which is significantly more when compared to 2019’s $338 million. However, this extraordinary outcome was made possible mostly due to the investments of GLP in CEE. As estimated by Rhodium, the value of GLP investments in Poland in 2020 amounted to approximately $800 million and covers 48 industrial buildings and warehouses acquired in Poland.

Positivity Abounds

However, this also means that the estimated number of ‘other’ Chinese investments in Poland amounted to only $200 million. It is believed that the pandemic will only exacerbate this trend. Although official reports show optimistic forecasts on the condition of the Chinese economy and GLP investments allowed for this positive result in 2020, the epidemic situation in Europe is noticeably discouraging investors and hindering larger cross-border projects.

“Other than the GLP investments, the infrastructure investment market – where Chinese contractors were visible last year – is a notable exception to this pandemic-induced drop-off,” says Justyna Jóźwiak, a Penteris attorney and Chinese speaker, “This primarily concerns the planned reconstruction of a section of the Warsaw-Białystok railway for PKP PLK (the state-owned Polish rail infrastructure manager) which will be carried out by a Chinese consortium composed in particular of Sinohydro, a company familiar to the Polish market.”

Diversification Continues

At the same time, we are witnessing a growing diversification of investment trends. Jóźwiak notes, “Instead of investments that have to date been pursued by state-controlled giants, private sector-initiated projects in the new technology and green energy sectors are increasingly on a rise.”

“Sports marketing can serve as a great example,” adds Jeremiasz Kuśmierz, Chinese expert and an attorney with Penteris, “We’re all familiar with AliExpress and interestingly on 24 October 2020 they became official sponsors of Polish soccer club Lech Poznań, which is currently competing in the UEFA Europa League. This is the first ever venture into the world of sports marketing for AliExpress, with the sponsorship agreement suggesting serious interest in the Polish market. Perhaps this is the first step for other Chinese brands.”

Retail Rises

Kuśmierz reveals that “According to a report by eCommerce Europe and RetailX, the Polish market is about to rise by nearly 33% and was valued at EUR 15bn by the end of 2020. This trend is expected to continue for the foreseeable future, and investors such as AliExpress are already looking to capitalise.”

A marked increase in Chinese investment can also be seen in the green energy and energy storage sectors. Kuśmierz believes that “Investors are particularly keen on Poland’s south-western region which offers convenient access to German and Czech markets. This might be why Bafang, the Chinese e-bike manufacturer, chose to open its new European factory there. It is worth noting that, more often than not, the presence of other Asian companies plays a key role when new investors from Asia decide where to establish their foothold in Europe. For this reason, we can expect Poland’s south-west to attract the majority of Asian investors in upcoming years.”

By Justyna Jozwiak, Junior Associate, and Jeremiasz Kusmierz, Senior Associate, Penteris

Our Latest Issue