Visiting Croatian Prime Minister Ivo Sanader said Friday in Beijing that Croatia hopes to forge a long- term and reciprocal economic cooperative relationship with China.

Sanader made the remark when giving a speech to the China- Croatia Business Seminar held Friday morning in Beijing, where he arrived Thursday for a five-day official visit to China.

Chinese Premier Wen Jiabao held talks with Prime Minister Sanader later on Thursday. The two sides signed a joint statement promising to establish a "comprehensive cooperative partnership".

"The good political relationship between the two countries guarantees trade ties," Sanader said, describing his talk with Wen as "effective".

With a population of more than 4 million, the northwestern Balkan country is recovering from a turmoil in the 1990s. With prospering tourism, shipping, construction and pharmacy industries, its GDP per capita reached 7,731 US dollars in 2004.

"Currently, the trade volume between China and Croatia is not very high, but the two have strong complementarity and enjoy a good potential for cooperation," said Yu Ping, vice-chairman of the China Council for the Promotion of International Trade (CCPIT).

According to Yu, China's exports to Croatia rose by 100 percent while imports from Croatia rose by 200 percent in 2004. However, Sanader said Croatia still runs a large trade deficit with China, and thus expects more exports to and investment from China.

Sanader said there are at least three reasons why Croatia is a good place for Chinese investment. First, Croatia can serve as the platform for Chinese capital and commodities to reach East and Central Europe. Second, Croatia signed free trade agreements with most European Union countries and became a candidate for EU membership in June, 2004. Last but not least, Croatia is creating the best environment for Foreign Direct Investment (FDI).

There are 18 free trade zones and 100 industrial zones in the country, with a profit tax of ten percent which can be lower as investment rises.

To protect FDI, Sanader said, Croatia has singed agreements on protecting investment and avoiding double taxes. Besides, its banking system has signed agreements with Chinese counterparts on credit services in bilateral trade.

"The visit of the Prime Minister Sanader is very fruitful and will greatly contribute to long term, reciprocal trade between the two sides," Yu said.

Source: Xinhua