Country risk reference rating: Level 5 (5/9)
Country Risk Outlook: Stable
Economic and trade risks
Poland’s nominal GDP in 2012 was US$498.71 billion, per capita GDP was US$1.272 billion, foreign trade was US$383.93 billion, the real economic growth rate was 2.0%, and the inflation rate was 3.7%. The country’s industrial structure is agriculture (4.0%), industry (32.2%), and service industry (63.8%). Major industrial industries include: mining, textiles, chemicals, machinery, steel, electronics and light industry.
Poland has good political stability, good public security, and no significant external threats. Its diplomatic relations with Russia are worthy of attention. Poland is one of the few EU countries with good economic performance. While its public debt burden is well below the EU average, it is still at a high level. Since 2008, Poland’s economy has been relatively resilient and has a certain ability to resist risks.
Business environment
Poland’s business environment is at a relatively good level within the European Union. The “2013 Business Environment Report” released by the World Bank shows that Poland ranks 55th among 185 participating economies. Compared with 2012 Ranking rose 19 places. Among the various sub-indicators, access to credit and investor protection are even better than the average level of OECD countries, while cross-border trade and handling bankruptcy are significantly better than the average level of Eastern Europe and Central Asia. However, contract enforcement and tax payment need to be improved.
With the consent of the EU, Poland has implemented some more favorable investment policies than other EU countries based on its own special circumstances: in 2004, Poland lowered its corporate income tax rate to 19%, becoming one of the countries with the lowest corporate tax rates in Europe; If you invest more than 10 million euros, or employ more than 100 employees and remain an investor for more than 5 years, we will provide investment subsidies of up to 25% of the investment amount, and employment subsidies of up to 4,000 euros for each new position.
Bilateral trade
Poland is China’s important trading partner in Central and Eastern Europe; China is Poland’s third largest source of imports. China mainly exports to Poland mechanical devices and parts, electronic equipment and parts, textile clothing and accessories, home furnishings, bedding and lamps, etc. China mainly imports copper and copper products, electronic equipment and parts from Poland. In 2012, the bilateral trade volume reached a record high of US$14.38 billion, a year-on-year increase of 10.7%, and China had a surplus of US$10.39 billion.
There are two main problems in China-Poland bilateral trade. The first is trade imbalance. For a long time, China’s exports to Poland have been far greater than its imports. From 2007 to 2011, China’s exports to Poland were US$43.53 billion, while imports were only US$7.73 billion. China’s cumulative surplus reached US$35.78 billion. The trade imbalance reflects the structural differences in the demand for traded goods between the two countries. Second, the trade structure is unbalanced. Poland mainly exports raw materials to China, while Poland mainly imports high-end processed products from China.
Overall risk assessment
The European sovereign debt crisis has seriously affected the regional economy, and Poland has maintained growth despite the crisis. From the perspective of Poland’s economic structure, under the premise of stable export scale, the economy is limited by the impact of the external environment. Poland has a heavy foreign debt burden and heavy repayment pressure, but its fiscal discipline is relatively good, creating conditions for the stable development of the Polish economy.
The Polish government encourages investment and continues to improve the investment environment. It has certain advantages in attracting foreign investment, especially for companies that hope to enter the EU single market by investing in Poland. Since the establishment of a strategic partnership between China and Poland, the political relations between the two countries have heated up rapidly, and the scale and form of trade and economic cooperation will be further expanded. Under the premise of a good macro-bilateral environment, companies must take into account micro-commercial risks when exploring the Polish market, conduct various investigations and research, and know themselves and the enemy before investing and bidding.
