Estonia and China

18.08.2009

The Republic of Estonia and the People’s Republic of China established diplomatic relations on 11 September 1991 during the visit of China’s Vice Minister of Foreign Affairs Tian Zengpei to Estonia. China opened its embassy in Tallinn in 1992. Since May 2006, China is represented in Estonia by Ambassador Xie Junping. In addition to the Embassy, there is a Chinese Economics and Trade representation and a Defence Attaché office. Estonia was first represented in China beginning in August 1997 by Chargé d’Affaires Andrei Birov and beginning in July 2001 by Malle Kurbel. Estonia’s first Ambassador to China Mait Martinson represented Estonia from 2002 to 2007. The current Estonian Ambassador Andres Unga presented his credentials on 30 September 2007.

Estonia also has a honorary consul Liu Chak-Wan in Macau. Macau region is attractive to the Estonian business community due to its developed infrastructure and strategic geographic positions.

Besides promoting economic relations and co-operation on the international level, Estonia is interested in promoting cultural and educational co-operation with China. Estonia has always supported a "One China Policy" (Estonia considers Taiwan an inseparable part of China's territory). China has expressed its respect for Estonia’s political goals, and views Estonia’s accession to the EU positively.

The X Riigikogu established a 16-member Estonia-China parliamentary group, chaired by Peeter Kreitzberg. The Chairman of the NPC China-Estonian Friendship Group is Liu Yingming.

Visits

Riigikogu and business delegations have also visited China.

In addition, several Chinese business and trade delegations have visited Estonia.

Bilateral Agreements

• Agreement on Scientific and Technical Co-operation (came into force 20.04.92);
• Agreement on Trade and Economic Co-operation (came into force 14.04.93);
• Agreement on Cultural, Educational and Scientific Co-operation (came into force 03.09.93);
• Agreement on the Promotion and Reciprocal Protection of Investments (came into force 01.06.94);
• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (came into force 08.01.99);
• Agreement Relating to Civil Air Transport (came into force 03.01.00).

Also of note, the Joint Declaration on the development of bilateral relations signed in 1994 by President of Estonia Lennart Meri and President of China Jiang Zemin is in force.

Military Co-operation

In the summer of 1998, Estonia’s Defence Minister Andrus Öövel visited China at the invitation of China’s Defence Minister Chi Haotian. During his visit, Öövel also met with Vice-President of China Hu Jintao. In August 1998, the first group of Chinese military officers took part in the annual Erna military reconnaissance competition. Further groups from China have successfully participated in subsequent competitions over the years. In 2002, the Chinese placed first and second in the competition.

Economic relations

Estonia and China have good and stable economic relations, but the distance and the size difference between the two countries is impeding co-operation. China’s interest towards Estonia is foremost due to Estonia’s favourable geographic position, its good transport infrastructure and strong scientific and technical potential.

Bilateral economic relations between Estonia and China are the central focus of the meetings of the Joint Commission on Trade and Economic Co-operation that meets every two years. The main discussion topics have included co-operation in civil aviation, transit, logistics and industrial production. The marketing of Estonian products to China is also an area that has received extensive discussion. The last Joint Commission meeting was held in November 2003 in Peking.

Now that most of the main economic agreements have been signed, the emphasis is being placed on expanding co-operation at the local level and on the creation of business contacts. Potential areas of co-operation include textiles, customs technology, timber and food processing and information technology. China is interested in co-operation with Eesti Raudtee (Estonian Railways) as well as in importing Estonian electronics and monitoring systems. China has also shown interest in Estonian biotechnology and oil shale processing.

TRADE

In 2006 trade with China accelerated substantially, mostly on account of rapid export growth. The total volume of export grew more than six times compared to the year 2005 and the total volume of import increased by 29%. The drastic growth of export was caused by trade in electronics sector. The trade turnover amounted to 540.7 million USD, of which exports accounted for 265.4 million USD and imports for 275.3 million USD. Due to the growth of export volume, the deficit of trade decreased to 9.8 million USD, which was only 6% of previous year’s trade deficit.

Estonian foreign trade with China 2000-2006:
(in millions EUR)

Main export articles in 2006:

• Machinery and equipment - 81%
• Metals and metal products - 10%
• Wood and wooden products - 3%
• Products of vegetable origin - 3%

Main import articles in 2006:

• Machinery and equipment - 55%
• Textile and textile products - 12%
• Metals and metal products - 8%
• Other manufactured articles - 7%
• Plastic and rubber products - 4%

INVESTMENTS

According to the Bank of Estonia, as of 31 December 2006, Chinese direct investments in Estonia totalled -2.2 million USD. The negative outcome might be caused by short-term trade credit to Chinese investors. Estonian direct investments in China increased markedly in the first quarter of 2006 up to 1.4 million USD, but diminished to 0.5 million USD by the end of the year.

TRANSIT CO-OPERATION

Estonia seeks to attract further Chinese investments, and hopes to increase the use of Estonian port and transit facilities by Chinese companies. China is interested in the modern infrastructure of Estonia’s transportation network that would allow it to use Estonia as a transhipment point for goods on the way to Western Europe. To carry this project out, Estonian Railway and Shanghai Railway signed a co-operation protocol in 1998, the goal of which is to direct China's trade to Europe through Estonia. In addition, Estonia is interested in developing co-operation in the field of sea transport. Another perspective co-operation project could be the container terminal project in the Muuga port.

Co-operation in aviation has also shown prospects. In March 1999, Estonia and China signed an aviation agreement that could lead to a direct flight connection between the two countries.

Culture and education

Promoting co-operation with China in the areas of culture and education is also of interest to Estonia, and is exemplified by the agreement on cultural, educational and scientific co-operation between the two countries that entered into force in September 1993.

Chinese dance troupes and music groups have performed in Estonia. Chinese art exhibitions have also been held in Estonia. Chinese films have featured in the Tallinn Black Nights Film Festival. In the fall of 2003, the Gold Prize was given to Estonian artist Benjamin Vasserman at the International Graphics Biennial. In July 2004, the Saku Children’s Choir visited Tianjin and children from Tianjin visited Estonia in August.

In November 2000, Estonian Cultural Days were held in Beijing. In April 2002, the Estonian Folk Dancing group "Lee" performed in China.

In January 2000, China’s Ambassador to Estonia Zou Mingrong presented over 2000 English-language books about China to the National Library in Tallinn.

Each year since 1995, China has offered scholarships to Estonian students wanting to study Chinese. The Estonian Institute of Humanities in Tallinn offers courses in Chinese language and culture. Chinese students have studied and are studying in Estonia.

The Estonian Business School (EBS) and Shandong’s Chinese Women’s College signed a co-operation protocol in the spring of 2000. Chinese students have participate in EBS’ two year international Masters of Business Administration programme since 2001. The programme specially established for Chinese students who have completed post-secondary studies is meant to give the students an international management based education making them competitive in the job market.

The Estonian and Chinese Academies of Science signed a Memorandum of Understanding for Scientific Co-operation in May 2000.