Romania, behind China in terms of business environment

The biggest Chinese investment in the Romanian manufacturing sector, DHS Eurosport company, is managed by Yang Xi, a former math teacher in China. The company last week opened a bike plant in Deva, the biggest in South-eastern Europe, with an annual production put at one million units. Yang Xi left China in 1996, together with her husband, Niu Guanghui, to do business in Romania. “We”ve chosen Petrosani city to open DHS Eurosport bike plant from two reasons: the high unemployment rate in Valea Jiului area and the fact that back then Valea Jiului enjoyed a depressed area status,” says the manager of the firm.

The investment was initially located in Valea Jiului, but was moved to Deva this year, where a production facility was built on a 15,000 square metre area. A rim production unit is still functional in Petrosani.

Investments in the new DHS Eurosport plant were estimated at approximately 5 million euros, targeting infrastructure, warehouse space and production. The plant makes a bike in four minutes. Until the plant in Deva was opened, the biggest bike production facility in Eastern Europe was located in Poland, manufacturing 800,000 units annually. Against an average price of around 400 RON per each sold unit, the new production facility of DHS Eurosport will take the company”s sales to more than 100 million euros.

Despite the success of the business, the contact with Romania has been depressing.

“I found myself unable to understand the Romanians” way of thinking, and red tape was exhausting. Not to mention the fact that legislation in the economic domain was changing each month. And this scares any investor away. You have to understand you need legislative stability to attain economic stability. No investor is willing to put money in a region where the legislative ground is soft and one”s in danger of sinking,” says Yang Xi.

She adds that in China all the problems are solved at the City Hall. DHS manager says ahead of 1989 Romania was ahead of China.

“You were ahead of us. Now, you”re lagging behind. In China, the business environment is much cleaner than here. There”s a lot of red tape here. On the other hand, Chinese employers waste a lot of time establishing new business relations. The protocol entails long meetings in restaurants, which keeps you away from taking care of your company”s business ,” says Yang Xi.

The firm set off with a share capital of $20,000 and in H1 of 2005 hit turnover worth around 15 million RON (4.2 million euros).