Premier Zhu Rongji yesterday vowed to rebuild and strengthen trade ties with Bulgaria, an ex-communist ally which is now, like China, rapidly transforming its economy to embrace the West.

In the first trip to Sofia by a Chinese government leader since the collapse of communism in Europe in 1989, Mr Zhu announced another US$10 million (HK$77.8 million) in credit and measures to boost trade ties between the two countries.

He explained why he had chosen Bulgaria, an impoverished Balkan country, to begin a European tour which will take him to six countries over two weeks. 'Our economic co-operation has a long tradition,' he said, noting that Bulgaria was the second country to recognise the People's Republic of China, in 1949. 'Despite the cooling of relations between China and the USSR, we have always had friendly relations with Bulgaria.' He recalled that China's trade relations with Bulgaria had slumped since the collapse of communism in Europe a decade ago and in the subsequent years, when Bulgaria's economic faltered seriously.

'Now the Bulgarian economy is reviving and our trade links are increasing,' said Mr Zhu, adding: 'I am optimistic about the future of economic co-operation between the two countries.' The Chinese Premier, who arrived in Sofia on Tuesday and is spending two days in Bulgaria before heading for Germany, Luxembourg, the Netherlands, Italy and Belgium, where he will wind up his trip on July 11 after holding talks with European Union leaders.

Mr Zhu proposed to Prime Minister Ivan Kostov the creation of a joint fund to help Bulgarian and Chinese businessmen travel between the two countries. He also announced the doubling of US$10 million credit pledged to Bulgaria during a visit to China last year by Foreign Minister Nadejda Mikhailova.

Yesterday, Mr Zhu also presided over the signing of five economic and cultural co-operation agreements with Bulgaria. The accords concern transport and infrastructure projects, employment, the environment, education and health.

Mr Zhu and Mr Kostov also struck a deal to create a joint venture to make electronic products in Bulgaria, with Sofia importing parts from China and then assembling and selling them, including to neighbouring countries.

Source: South China Morning Post

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