China to build highways in Moldova

By SCMP

Two Chinese contractors are in final negotiations to build two highways in Moldova, marking the first time China has extended the nation’s engineering and construction prowess to the eastern European nation.

China Hyway Group and China Railway Group Limited are in talks to build two highways with a combined length of 300 kilometres in Moldova, according to Vitalie Lurcu, the Modolvan State Secretary of the ministry of Economy and Infrastructure.

The first highway will encircle the Moldovan capital of Chisinau, while the second will connect Moldova’s northern districts with neighbouring Ukraine, Lurcu said. Financing for the two projects, estimated at a combined US$400 million, may take two options: wholly funded by China, or split between China and Moldova 85:15.

“The projects will significantly improve traffic and contribute to economic growth,” Lurcu said in an interview with South China Morning Post in Hong Kong.

“Negotiations on the financing will be concluded this year, and construction is expected to be completed in three years.”

The projects mark the first time Chinese construction companies are extending their projects into the landlocked country, sandwiched between Ukraine and Romania. The country, which declared its independence in 1991 with the dissolution of the former Soviet Union, fits into the European end of China’s Belt and Road Initiative (BRI), comprising a string of infrastructure projects along the ancient Silk Road from China to Africa and Europe.

China and Moldova had been in talks since December 2017 to establish a free-trade agreement between the two nations, which would remove import barriers on each other’s products and bolster commerce.

Investments by Chinese companies in the 56 countries that make up the BRI rose by 8.9 per cent last year to US$15.65 billion, according to data by China’s Ministry of Commerce. China has been tilting towards overseas investment in central and east Europe, as the country seeking to deepen its footprint and spread its influence on the continent.

The country is tapping investment dollars presented by active Chinese presence in eastern Europe, even if Moldova isn’t among the so-called “16+1” framework of China’s economic cooperation with 11 European Union members and five Balkan countries. The framework was introduced in 2012, a year before the BRI kicked off.

Other Chinese companies have also been active in eastern Europe. China’s state-owned builders and banks are involved in building a US$1.4 billion highway in Bosnia and Herzegovina, linking Banjaluka with Mliniste.

“Moldova is committed to active participation in the BRI,” Lurcu said.

The country has been actively promoting an immigration programme since November, which grants citizenship to applicants who can invest €100,000 (US$113,000) in the country.

China Railway, based in the Chinese capital, could not be reached for comment. Beijing-based Hyway confirmed that the company is in talks to build a road in Modolva. The company already has construction projects in Angola and Serbia, according to its website.

Highway construction by China Hyway in Serbia
Construction site of a highway in Serbia of China Hyway
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