Asia, Central Europe forge closer ties

Asia, Central Europe forge closer ties

BERLIN (DPA): Two of the world's fastest growing regions --
Asia and Central Europe -- are rapidly forging new economic ties,
as evidenced by Indonesian Trade and Industry Minister Tunky
Ariwibowo's embarking on a 10-day trip to the former Soviet bloc
Friday.

Ariwibowo's visit to Hungary, Rumania and Poland comes in the
wake of the stepped-up exchange of top-level business and
political missions and trade agreements between the two regions.

Spurred on by Central Europe's low cost but highly skilled
labor force, several big-name Asian companies have been carving
out new empires in the emerging markets of the former Soviet
Union.

Investment in Central Europe by Asian businesses at present
represents only a small part of their global investment
strategies.

But for corporations such as the giant diversified Korean
group, Daewoo, which has extensive investments in nations such as
Rumania and Poland, labor costs in Central Europe can be up to 25
per cent of costs in Korea.

Despite the somewhat underdeveloped cultural and historical
ties between Asia and the countries making up the former Soviet
bloc, Asian investors are projected to more than double their
investments in the region over the next five years to about 3
billion German marks (US$1.75 billion) with a string of new plans
also under consideration.

While European and U.S. corporations still comprise the lion's
share of the US$24 billion of foreign funds that have so far
flowed into Central Europe, leading Asian nations such as
Indonesia are keen to cash in on the fast-changing economies of
the former Soviet bloc.

Ariwibowo's trip to Central Europe follows a similar swing
through the region by the Vietnamese Prime Minister Vo Van Kiet.
Likewise, Central European states are moving to cement ties with
the Asian-Pacific region.

A high-level Rumanian investment and political mission has
just returned to Bucharest from a mission to the region.
Meanwhile in Bucharest Monday, Rumanian President Emil
Constantinescu told a visiting Chinese minister Bao Xuding of the
great importance Rumania attached to its ties with China.

Earlier this year, Hungarian Prime Minister Gyula Horn
completed a series of trade, investment and tax deals in Asia
following a trip to the region, including visits to Malaysia and
Singapore.

Trade between Hungary and Singapore jumped 50 percent last
year to $180 million.

At the same time, Polish Foreign Minister Dariusz Rosati was
in Thailand to sign several new agreements aimed at promoting
bilateral ties between the two nations.