An El Dorado through Spanish eyes

Updated: 2015-11-13 08:14

By Cecily Liu and Tuo Yannan(China Daily Europe)

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Spain is keen to act as a catalyst in Europe's relationship with china

Spain is alive to the trade and investment opportunities flowing from China's Belt and Road Initiative, says Jaime Garcia-Legaz, Spain's secretary of state for trade.

The country is already enjoying some of its benefits; the Yiwu-Xinjiang Europe freight trains, which connect Madrid with Yiwu and Xinjiang in China, have made the Spanish capital one of the hubs for much of the trade activity between continental Europe and China. The first train on this route started operating at the end of last year. Yiwu is the world's largest wholesale hub for small consumer goods and is host to a market in which tens of thousands of traders work daily.

 An El Dorado through Spanish eyes

Jaime Garcia-Legaz, Spain's secretary of state for trade, says Spanish companies have a strong competitive edge when it comes to the Belt and Road Initiative. Cecily Liu / China Daily

"We hope to enhance the economic and trade relationship with China and with Asia. The Belt and Road Initiative is a good way to build the necessary infrastructure to enhance the connection between Europe and Asia," Garcia-Legaz says.

He was speaking to China Daily during the two-day Silk Road Forum, which was held in Madrid in October and was attended by about 300 professionals and policymakers who discussed the future of the Belt and Road Initiative.

President Xi Jinping proposed the initiative in October 2013, when he visited Central and Southeast Asia. It consists of the Silk Road Economic Belt and the 21st Century Maritime Silk Road and is aimed at promoting infrastructure investment, trade and growth, and increasing global connectivity.

Garcia-Legaz says Spanish companies have a strong competitive advantage when it comes to the initiative, especially in the provision of infrastructure, the development of renewable energy, agriculture and food and financial services.

Spanish companies can bring valuable expertise to the initiative because of their involvement in infrastructure projects in Europe and Latin America, he adds.

Garcia-Legaz says Spain lags behind many other European countries in trade and investment exchanges with China, but that this situation will change and that there has recently been some Chinese investment in Spain.

"China became Spain's third-largest trade partner in the past few years, but bilateral trade is still behind China's trade with Germany and France. China is becoming more widely known in Spain and is getting better, and the interest in China from Spanish businesses is increasing at a fast pace."

An El Dorado through Spanish eyes

China is Spain's biggest trading partner after the European Union, with trade worth about 16 billion euros ($17.4 billion) last year, according to statistics from the data provider CapitalVue.

This mutual interest is reflected in the large number of people studying Mandarin in Spain and the rapid expansion of Chinese companies in the country.

Garcia-Legaz points to the Chinese company HNA Group's acquisition of a 20 percent stake in the Spanish hotel management company NH Hotel Group in 2013, and an additional 8.3 percent equity stake in 2014. HNA Group is the parent company of the Chinese carrier Hainan Airlines.

The acquisition was made with the intention of expanding the influence of NH Group, especially in the Chinese market, as well as helping NHA to operate as an increasingly globally company, NHA said in a statement at the time.

Another example is the purchase of a 20 percent stake in the Spanish football club Atletico Madrid by the Chinese property and entertainment giant Wanda Group, for 34 million pounds ($51.6 million; 47 million euros) in January. The deal gave Wanda a seat on the club's board of directors.

Wang Jianlin, chairman of Wanda, said at the time that this investment not only provided a good opportunity for young Chinese players sent overseas by Wanda to be selected by leading European football clubs, it would also strengthen the quality of Chinese football and narrow the gap between the country and the rest of the world.

Wang is an avid football fan and the company has a long connection with the sport. He established China's first professional football club in the company's hometown, Dalian, in 1994. The club, Dalian Wanda FC, was a hugely successful team throughout the late 1990s, and still holds a Chinese record of 55 matches without defeat.

Rastar Group, a Guangdong-based toy manufacturer, said it was buying a 51 percent stake in Espanyol, a Spanish La Liga club, through its Hong Kong unit.

In the financial services sector, the Industrial and Commercial Bank of China is leading many Chinese investments into Spain, having opened its first branch in Madrid in 2011.

And Spain is increasingly popular with Chinese tourists, says Garcia-Legaz. When Spain's Prime Minister Mariano Rajoy visited China last year, he announced that Chinese tourists would be able to complete visa procedures within 48 hours, thereby boosting Chinese visitor numbers to Spain.

"We need to help Spanish companies gain a better understanding of the economy of China, and we need to explain what happens in Spain to a larger group of Chinese companies," Garcia-Legaz says.

In October last year, when Rajoy visited China and met Premier Li Keqiang, businesses from both countries signed deals worth about $3.8 billion, covering cooperation in areas including the film industry, nuclear power, telecommunications, finance, wind power, seawater desalination and tourism.

To further encourage trade and investment relations, the Spanish government will host forums for CEO exchanges each time top Chinese political leaders visit Spain or Spanish political leaders visit China, Garcia-Legaz says.

"China will be a crucial partner for Spain in the years to come."

Spanish businesses are enthusiastic about the new opportunities that China's market and the Belt and Road Initiative present.

The Spanish wind power company Gamesa Corporacion Tecnologica entered the Chinese market 15 years ago to supply technology to power plants in China and 10 years ago established a wind turbine manufacturing facility in China.

"We entered the Chinese market because we realized there is a large demand for renewable energy sources in China. Over the years we have already installed 3.6 gigawatts of power in China. We also manufacture wind turbines in China for export worldwide, mainly exports to Asia Pacific," says Jon Lezamiz, institutional affairs director of Gamesa.

"The Belt and Road Initiative is very exciting for us, because we can work with Chinese companies to install our wind turbines worldwide and especially in countries that are along the Silk Road," Lezamiz says.

The company is already cooperating with the Chinese firm PowerChina to supply wind turbines for a project in Thailand. "We are already enjoying the benefits of the initiative."

Tecnicas Reunidas, a Spanish general contractor for power generation plants, particularly in the oil and gas sector, entered the Chinese market in the mid-1980s.

Pablo Rovetta, China country manager of Tecnicas Reunidas, says the initiative will bring many opportunities for the company in countries that are on the route because those countries have abundant and untapped natural resources, especially oil and gas.

"It will be much easier for us to go into these countries and explore these natural resources because the initiative will improve infrastructure building," Rovetta says.

Spain wants to be a catalyst in China's relationship with Europe as well wanting to strengthen its own economic ties with China.

"We support the investment agreement between Beijing and Brussels, and we believe we need a better legal framework for trade and investment to make progress," says Garcia-Legaz.

Negotiations for the EU-China Investment Agreement were launched three years ago at the EU-China Summit of February 2012, with the goal of providing a simpler and more secure legal framework to investors of both sides and to tap the full potential of China-EU cooperation.

To this end, China and the EU have been engaged in negotiations with six rounds being conducted so far. The negotiations have been constructive, intensive and in-depth, and they are expected to achieve substantial progress by the end of this year, says Yang Yanyi, head of the Chinese mission to the EU.

"I believe that Spain is now an active agent in Europe, and that makes those processes go ahead," Garcia-Legaz says.

Contact the writers at cecily.liu@mail.chinadailyuk.com and tuoyannan@chinadaily.com.cn

(China Daily European Weekly 11/13/2015 page20)