In his opening remarks at the Conference on European Economic Integration (CEEI) 2011, which is entitled “European Integration in a Global Economic Setting – CESEE, China and Russia” and which has been jointly organized by the central banks of Austria and Finland, Ewald Nowotny, Governor of the Oesterreichische Nationalbank (OeNB), highlighted the role of China and Russia as emerging global economic players. Both China and Russia play an important role for the growth potential of Central, Eastern and Southeastern Europe (CESEE) – and thus indirectly for Austria.
At present, the CESEE economies are strongly focused on Western Europe. Almost 57% of all exports from the region are currently destined for Western Europe, whereas a mere 1.2% go to China, and just 4% to Russia. Yet, above all China has been turning into an increasingly attractive destination for exports from the CESEE region as a result of its strong growth performance. This fact is gaining all the more importance now that the euro area stands to lose considerable growth momentum in the near future in view of the debt crises of some euro area countries.
At the same time, the rising importance of the Chinese and Russian economies represents a challenge in its own right. The main export targets of China and the CESEE countries overlap, so that the two economic areas in fact compete for the same markets. Their geographical proximity to the Western European market, however, predisposes the CESEE countries to meet specific market needs better. Russia plays a key role in securing the supply of energy and thus in securing CESEE growth.
One challenge that all three economic areas – CESEE, China and Russia – face is the need to strengthen domestic demand to make their growth less dependent on exports. Refocusing growth strategies is particularly important in view of the renewed weakening of the global economy. Re-engineering growth will at the same time be instrumental in unwinding external imbalances in the long term. While foreign direct investment kicked off the expansion in both China and the CESEE region, the Chinese success story has largely been built on investment and innovation, stressed Governor Nowotny.
In his opening remarks Governor Nowotny also pointed out the long-standing tradition of cooperation between the OeNB and Suomen Pankki – Finlands Bank. Both central banks turned the spotlight of their analysis on the regions in question years ago for historical and geographical reasons and because of the strong economic ties between their countries and these areas.
The CEEI 2011 provides a forum for discussing these and other issues on Monday, November 21, and Tuesday, November 22, 2011. Speakers include high-ranking representatives of Eastern and Western European central banks as well as of international organizations and institutions.