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Victor Azmanov: If you know the Chinese ways, doing business with China is easy

 

The Chairman of BCCCI was interviewed by Todor Radev from the Bulgarian department of China Radio International in Beijing

 

Hellodear listenersWith us is MrVictor Azmanov, who does not need a special introduction for the people who are in line with the bilateral relations between Bulgaria and China. Howsoever, let me remind you that he is the Chairman of the Buglarian-Chinese Chamber of Commerce and Industry and is visiting China in this capacity. Therefore, my first question is, what is the reason for your current visit, Mr. Azmanov?

- My current visit to China has two main objectives. The first is to discuss the forthcoming opening of a Bulgarian-Chinese Chamber of Commerce and Industry office in Beijing. Secondly, following minister Delyan Dobrev’s steps and the door he managed to open during his visit here last year, I am very proud to announce that the relations between the Bulgarian and Chinese golf associations have recently deepened.

 

Let us say more about the Bulgarian-Chinese Chamber of Commerce and Industry. Business is a very broad concept, so let’s narrow it down to particular projects, partners and plans. What does BCCCI really do and where do you think is its place in the overall picture of the Bulgarian and Chinese economies, and the relations between the two?

First of all, one has to know the possibilities that the Bulgarian and Chinese economy can offer very well, in order to know which fields can interact. The Chinese market is very attractive for the Bulgarian manufacturers but, unfortunately, only those whose products are very specific and unique can succeed in marketing their goods there. Rose-based products are first in this list. For instance, we were very active at the Rose Festival in Kazanlak last year. We co-organized the Miss Bulgarian Rose competition and the first prize we gave was a visit to China.

To sum up, we’re currently in the process of establishing a platform for all the Bulgarian manufacturers of rose-based products – especially for those who sell the end products, because they seem to be the most attractive for the Chinese market – soap, shampoo, skin care. The rose oil itself is not that interesting for the Chinese and is sold better in the West. Bulgaria has enormous quantities of rose water. In 2010, there was a very successful experiment – selling bottled Bulgarian rose water in a local supermarket. However, the quantities which our rose industry manufactures and which can be exported to China are far more than the bottles sold during that campaign.

Second, of course, comes the Bulgarian wine. I dare say that currently Bulgaria is exporting two containers at most to China, which is not a lot, but it is not nothing, too. This is a good starting point, because there are already Bulgarian wine brands, which are recognizable on the Chinese market. Terra Tangra, for example. 

- A few months ago, in Shanghai, there was a large-scale advertising campaign for Bulgarian yoghurt. Do you have any ideas for this sector? The dairy market in China is flourishing, but mostly dominated by local companies, and the import comes mainly from Australia and New Zealand.

- Let’s be realistic here. First, we need to mention that the Chinese consume a lot more fresh milk. Yoghurt is not a traditional product and not that recognizable. In Bulgaria, on the other hand, there is a severe shortage of fresh milk and therefore, the yoghurt manufacturers either have to import it, or resort to the use of powder milk. A while ago, a company from South China contacted us because they wanted to import Bulgarian fresh milk for their pastry plants. It turned out, however, that the offer on behalf of our Bulgarian partners was not competitive. Therefore, for now I think that the Lactobacillus-Bulgaricus food additives have a better chance for success, because they are unique. 

- It is interesting for me to hear your opinion on another field – attracting more Chinese tourists in Bulgaria. For the great part of the Chinese people today, Bulgaria is virtually unknown as a country, even more as a tourist destination. Those, who know Bulgaria, on the other hand, are complaining about the visa issues. Is anybody in Bulgaria doing something to facilitate that?

- Nowadays it is neither hard, nor complicated for a Chinese citizen to get a visa for Bulgaria. There was a time in the recent past, when the procedure was very complicated because we had to comply with the Schengen regulations and we needed to learn how the whole system works. Today, however, it takes no more than two weeks for a Chinese tourist to get a visa for Bulgaria. It’s true, we can’t compete with countries such as the Netherlands, for which the visas can be issued in less than three days, but this is the second thing I came here for. Besides the opening of our Beijing office, we’re here today, following the minister of economy, energy and tourism Delyan Dobrev’s steps, in order to take 100 Chinese with a charter flight to Volvo Open. This is only a small part of the 30 million Chinese people who play golf.

- As a person who has been working in this sector for very long now, how do you think – is it easy doing business with the Chinese?

- If you know their ways, it’s easy to do business with them. If you are reconciled that we are too small for them in every aspect, if you realize that it is better to cooperate and to stand on the same platform along with your colleagues, who manufacture the same product as you or have the same target group – you have a far better chance.

- In the last couple of years, the Chinese business has been trying vigorously to go global, but not to sell anymore, but to invest. A lot has been said and written on the topic – “we, the Chinese, want to help you handle the crisis, create workplaces, to invest, but you – the foreigners, are suspicious of us, you don’t believe us and you try to keep us away. Our intentions are good.” The best examples are the telecommunication giants Huawei and Zhongxin’s last attempts to establish themselves on the American and Australian markets. They still haven’t succeeded in making some serious investment there, because Washington and Canberra are both keeping them away and citing national security issues as a reason. What’s to say about the usual trade issues between the EU and China. Beijing reckons that the Western people somehow fear Chinese investment. What’s your opinion? Does Bulgaria need to be wary of Chinese investors?

- What I can say is that we’re positive about Chinese investment, but we’re also objective.

I think it’s best here to look at the German Chancellor Angela Merkel’s position. She welcomes the Chinese investors and real Chinese investment. After this we have to draw the line – what does ‘real investors’ and ‘real investment’ mean?

The Chinese, coming from a planned economy, where everything is pre-settled and regulated, tend to require too much guarantees in our market economy. They want to invest, but on the other hand, they are not ready to take the so-called investment risk. They want to be managers and investors, but at the same time want to stay mere suppliers, who get paid for their goods.

In this respect, both countries need to learn a little lesson.

Firstly, the Western world, and Bulgaria in particular, has to be tolerant and to encourage the Chinese investors, to help them get to know the laws, mechanisms and the Bulgarian and European ways. This is what Chinese investors lack. As I said, they are used to a planned economy and expect the rules to be the same everywhere.

Secondly, the Chinese themselves need to spend a little more efforts – especially those, who aren’t coming from Beijing or another big city. It is vital to attract foreign-educated employees, who have lived in another country and worked in international companies. They are the ones who can overtake the know-how deficiency in becoming a real investor, how to do real business, and not merely be a supplier, who wants to be perceived as an investor.

- Do you reckon the Chinese foreign investment, no matter how big, carries a risk? Maybe it is because of the reasons you mentioned that the Western partners are so suspicious of the Chinese investors?

- Yes, they carry a risk. Let me give you an example. There are certain Chinese provinces with well-developed plants and enterprises, who decide to take up foreign investment. At one point, however, it turns out that most of the people in this province not only do not know the law in detail, but aren’t even aware of the existence of regulations. This happens to be a great obstacle but doesn’t necessarily mean that Chinese investment is dangerous, nor that the outer world is dangerous for China itself. We just have to try and understand each other a little bit better.

- The Bulgarian economy is a market economy. However, what does the government need to do, in your opinion, in order for the economic, trade and investment relations with China to obtain a larger scale and for us to stop working on a piece-rate basis?

- You are right that the bilateral relations between Bulgaria and China have always been “on a piece-rate basis”. Unfortunately, we don’t have that kind of long-term relations, as for example, our north neighbour Romania has. Look at all the Chinese investment in Romania, look at the real Chinese business there. As I said, however, we’re trying to stay positive and on 24th January we are going to gather all the Bulgarian-Chinese organisations in one place and we will try to convince them that only if we look together toward the East, will the East finally notice us.

- In which sectors do you think the Bulgarian-Chinese relations have the best chance? And I am not talking about purely commercial relations, I am talking about real cooperation that more people and whole regions can benefit from.

- It’s true. I, personally, have visited a large number of small and medium Bulgarian municipalities. The mayors of such towns have designated certain areas for Chinese industrial zones and they need us to find Chinese investors. But yet again it all comes to the lack of know-how.

Firstly, those areas’ characteristics are always different. If you don’t have the right economic environment, you can’t have a prerequisite for real business. If somebody wants to attract Chinese investors to put their money in a certain industrial zone, they need to have a reason to do that, be it tax-relief or a promise on behalf of the municipality that if they create X workplaces, the local authorities will handle the infrastructure, communications, water. The ideas need to be clear and precise. The only specific vision which I have seen in Bulgaria is Bozhurishte Industrial Park. They have even hired a person who is fluent in Mandarin, they have translated their presentations in Chinese, they seek advice from us very often and they get by very well.

Leaving trade relations aside, we skip the agriculture and tourism, and reach the field of culture and education. I think this is the long-term investment, which will give great benefit for the future generations. I am extremely happy that a second Confucius Institute was opened in the University of Veliko Tarnovo. Although the first Institute – the one in Sofia University, turned out to be not very successful according to the Chinese Hanban’s evaluation, I think the opening of the second Institute was a very successful maneuver. To a certain extent, we managed to convince them that a second branch will create competition and both of the Institutes will give the best they can. On the other hand, there is the idea for the second Confucius Institute to become an Ushu Confucius. If martial arts are taught in it, this will attract more attention.

- This was actually the next topic I wanted us to discuss. You are the only Bulgarian, who has lived in the Shaolin monastery. What did you learn there?

- Mostly patience, maybe. I learned a lot of things during my 9-month training at Shaolin. The Monastery is a place full of energy. Aside from the personal benefit – the friends I made there, I obtained a good basis to continue developing the Bulgarian-Chinese bilateral relations, and even to take them to another level, which is the Bulgarian-Chinese Chamber of Commerce and Industry, which enjoys both Bulgaria and China’s firm support.

- Did you have the chance to meet and talk to grand master Shi Yanxin at Shaolin?

- Yes, we met. I even managed to persuade him to take a photo with one of the three Bulgarian groups that visited the Monastery, which was very hard, because he never takes photos with anybody. I made friends with the famous Shi Yanlu, the leader of the warrior-monks. I was the one who introduced him to the Beijing Confucius Director. This is how the Ushu project in the Veliko Tarnovo Confucius Institute was born.