Latvia and China have a long-standing history of diplomatic relations that date back to the Soviet era. The two countries established formal diplomatic relations in 1992, after Latvia regained its independence from the Soviet Union. Since then, the bilateral relationship between Latvia and China has evolved considerably, with both countries engaging in various areas of cooperation, including business and trade.
2This article will examine the business relations between Latvia and China from 1992 to 2023.
1992-2000: Early Stages of Cooperation
In the early stages of cooperation, Latvia and China focused mainly on cultural exchanges and establishing diplomatic relations. However, as the 1990s progressed, economic cooperation between the two countries began to develop. In 1996, Latvia and China signed a trade agreement, which aimed to promote and develop bilateral trade between the two countries. This agreement led to increased trade between the two countries, with Latvia exporting timber and wood products, agricultural products, and metal products to China.
2001-2010: Growing Cooperation
In the early 2000s, Latvia and China’s economic cooperation continued to grow, with Chinese companies investing in Latvia’s transport and logistics infrastructure. In 2005, Latvia signed an agreement with China to cooperate in the field of science and technology, which led to the establishment of joint research projects between Latvian and Chinese universities.
During this period, Latvia’s exports to China continued to increase, with China becoming one of Latvia’s top trading partners outside of the European Union.
2011-2020: Further Development
In the 2010s, Latvia and China’s economic cooperation continued to expand, with China investing in Latvia’s energy, transport, and logistics sectors. In 2013, China’s COSCO Shipping acquired a 34% stake in Latvia’s Ventspils Nafta, one of the largest companies in the Baltic States.
In 2015, Latvia and China signed a Memorandum of Understanding on Cooperation in the Framework of the “One Belt, One Road” initiative, which aimed to promote cooperation and trade between the two countries in the areas of transport, logistics, and infrastructure.
During this period, Latvia’s exports to China continued to grow, with China becoming one of Latvia’s top trading partners. In 2019, Latvia’s exports to China reached a record high of 340 million euros.
2021-2022: Current Situation and Future Prospects
As of 2021, Latvia and China’s economic cooperation is multifaceted, covering various sectors such as transport, logistics, energy, and trade. China remains one of Latvia’s key trading partners outside of the European Union, with Latvia exporting mainly timber and wood products, metal products, and food products to China.
Looking ahead, there are opportunities for further cooperation between Latvia and China, especially in the areas of technology, innovation, and digitalization. The Latvian government has identified these areas as key priorities in its economic development strategy, and China is a leader in many of these fields.
Latvia and China have had a relatively small level of economic cooperation in the past, but there have been efforts to increase trade and investment between the two countries.
However, there are also some challenges to Latvia and China’s cooperation in the field of business. These include:
Differences in business culture: Latvia and China have different business cultures, which can make it difficult for companies from the two countries to work together effectively. For example, Chinese companies may be used to a more hierarchical approach to business, while Latvian companies may prefer a more collaborative approach.
Language barriers: Language can be a significant barrier to cooperation between Latvia and China, as Latvian companies may not have employees who are fluent in Mandarin or other Chinese dialects.
Geographical distance: Latvia is located far from China, which can make it difficult for companies from the two countries to meet in person and develop business relationships.
Political tensions: There have been some political tensions between Latvia and China in recent years, which could affect business cooperation. For example, Latvia has expressed concern about human rights issues in China, which could create tensions between the two countries. And China relations with Russia and Taiwan issues.
Overall, there are both opportunities and challenges for Latvia and China cooperation in the field of business. While there are some obstacles to overcome, there is also potential for increased trade and investment between the two countries in the coming years.