Li's foreign trip aims to tap overseas markets

Chinese Premier Li Keqiang's upcoming trip to Romania is expected to strengthen trade and economic links with sixteen central and eastern European countries and create a multi-win scenario, analysts say.

During his visit to Romania, where he will also attend a China-Central and Eastern Europe (CEE) leaders' meeting, Li is expected to sign a string of inter-governmental agreements and contracts in a bid to help competitive Chinese enterprises expand overseas, especially those in sectors such as infrastructure, manufacture, hydro-power and nuclear energy.

Analysts said Li's "economic diplomacy" will not only help domestic enterprises curb their excess industrial capacity, but also benefit both sides, as China and CEE countries could complement each other with cooperation.

They believe that diplomacy needs to focus more on economy at a time when China's development continues amid a still fragile global economic recovery and a slowdown of emerging markets.

"China's economy is facing major reforms after the Third Plenum of the 18th Central Committee of the Communist Party of China," said Zhu Feng, deputy director of the Center for International &Strategic Studies at Peking University.

It is time that China's economic diplomacy should focus "more on exploring global markets, building a healthier global trade system and forging more positive economic partnerships so as to create a favorable external environment for the country's economic transition and industrial upgrading," said Zhu.

Currently, China has managed to achieve steady economic development. However, structural imbalance and overcapacity pose grave challenges for its future growth.

The Financial Times pointed out in a June article that "Chinese industry is awash with excess capacity that is driving down profits inside and outside the country and threatens to further destabilize China's already shaky growth."

Hu Zucai, deputy director of the National Development and Reform Commission (NDRC), said exploring global markets could be an effective way to deal with overcapacity. The government should encourage Chinese enterprises to "go out," dealing with their overcapacity challenges through overseas investment and cooperation.

In fact, the so-called "economic diplomacy" is not a one-way street which only benefits China. Instead, its core is about mutual benefits and win-win situations.

China's participation in the construction of major projects in central and eastern Europe could help boost local economies and promote their social development.

Moreover, China is also planning to expand imports from countries in the region, step up bilateral cooperation in green economy sectors and try to be creative in expanding financing channels, analysts said.

Besides the 10-billion-U.S.-dollar credit line China has set up for central and eastern Europe, China will also give countries in the region more access to funds in its cooperation with advanced western European nations, which will undoubtedly bring substantial benefits to the debt-ridden region, they added.