ECONOMIC RELATIONS

Economic Co-operation

Latvia-China bilateral economic relations are regulated by:

1. Agreement on Economic Co-operation between the Government of the Republic of Latvia and the Government of the People's Republic of China (in force since 1 December 2004).

2. In accord with article 6 of the agreement, the Latvia-China Joint Committee was established to monitor the operation of the agreement and to examine issues related to its implementation. From the Latvian side, the committee is chaired by Kaspars Gerhards, State Secretary of the Ministry of Economics.

Session 4/1 of the committee took place on 15-19 November 2004 in Beijing. Session 5/2 took place on 24-25 August 2005 in Riga.

On 13-14 November 2007 in Beijing, 6th session of the committee took place, which was headed by Ministry of Economics State Secretary Kaspars Gerhards for the Latvian side. The sides signed session minutes, which identify transport, industry, and tourism as the prospective fields for co-operation. 

• Over recent years, Latvia-China bilateral trade volumes have continued to grow steadily and in 2006 reached over 200 million USD, exceeding the 2005 volumes by 70 million.
• In 2006, exports from Latvia to China grew by 89%, while Chinese imports to Latvia increased by 48%. However, the trade gap is steadily widening: in 2006, imports outpaced exports by 171 million USD, while a year earlier the difference was by 52 million USD smaller.
• Exports of base metals and metal articles have more than doubled, while exports of machinery, equipment, and electrical appliances, as well as export of wood and wooden products have tripled. Exports of textiles and textile articles have decreased considerably - by more than 1 million USD.
• Exports of machinery, equipment, other manufactured articles, as well as metals and metal articles have undergone the most rapid growth - by over 10 million USD.
• The main target sectors for Chinese investment are hotels and restaurants as well as crop growing, market gardening, and horticulture. 

TRADE with CHINA in 2007, in EUR

China (in thousand EUR, data of the Central Statistical Bureau)

Financial Operations

Accounting for as much as 16% of total FDI stock, the financial services industry has experienced remarkable growth rates with tripled commercial bank assets and a six-fold increase in loans since 1996. Experts estimate that the financial market in Latvia and the Baltic countries will maintain the same growth tempo, considerably higher than average indicators in the EU, for at least 5–10 more years. The Latvian banking and insurance market is dominated by important regional players including FöreningsSparbanken, SEB ( Sweden ), Nord/LB ( Germany ), Nordea ( Finland ) who are present either as owners of, or important/majority shareholders in banking operations initially established locally. However, there are still a number of niche opportunities within the domestic financial services market, especially in the field of corporate banking. Particular growth within the bank sector is expected in the financing of loan operations, export/import deals and online banking. It is expected that the most rapidly growing insurance markets will be for services related to corporate and social insurance. Growth is expected also in unexplored areas such as pension and investment funds. The most important driving force for further growth remains the constant increase of purchasing power and overall economic activity in the country. This, in combination with the stable, conservative monetary policy of the Bank of Latvia makes Latvia an attractive financial environment.

Key advantages of the sector: Latvia 's stable monetary policy, growing purchasing power and demand for financial services.

Additional information at:

www.bank.lv

www.fktk.lv

www.bankasoc.lv

Latvian Investment and Development Agency

Pērses str. 2, Riga
LV-1042, Latvia
Tel: +371 67039400
Fax: +371 67039401
E-mail: invest@liaa.gov.lv

http://www.liaa.gov.lv

http://www.exim.lv