Tim Gosling in Prague -

Poland is raising its efforts to pull a portion of China's giant sovereign wealth funds into the country, with investment agency PAIiIZ claiming to have signed a deal with China Investment Corporation that will see the Poles scout out deals for the €314bn state fund.

"The deal is that PAIiIZ will be looking for projects CIC could invest in Poland," the agency's chief Slawomir Majman told Reuters in an interview. "As for the size of their investments, the sky is the limit."

With the debt crisis weighing heavily on developed markets, cash rich emerging market players have come to the fore - and at $3.2 trillion, China has the largest reserves on the planet by some way. The country is currently being courted by the EU and International Monetary Fund to back the European bailout fund they are trying to build, although are thought to be baulking at likely demands from Beijing for a larger say in the global economy through institutions such as the IMF.

China has also proved keen to snap up physical assets in emerging markets, particularly those that can help feed its giant appetite for energy and other commodities. However, faced by resistance to large-scale control of assets from the West, Beijing has mostly stuck to the debt markets when investing in Europe and the US.

However, it clearly sees markets to the east of the EU as a potential bridgehead to the rest of the bloc for investments and contracts for its large state-controlled companies, and appears especially keen on Poland's large and robust economy. PAIiIZ signed similar deals with China Development Bank and the National Development and Reform Commission (NDRC) in December, when Polish President Bronislaw Komorowski visited Beijing. "The deal with NDRC is especially important, because it defines benchmarks for annual investments by 2015," Majman said, without offering details, adding that while China is mainly interested in the financial sector, mining, power and infrastructure, Warsaw would like to see it enter IT and telecommunications, food processing and chemicals.

However, money talks, and Chinese deals thus far remain concentrated in the heavier industries. Gaungxi LiuGong Machinery agreed a takeover of Polish road machinery maker Huta Stalowa Wola for an estimated PLN250m in January, while Chinese construction firms are also reported to have bid in tenders for power units launched by Polish utilities Tauron, Enea and Energa.

Both sides presumably will be keen to move forwards and forget the Covec debacle last year, when the Chinese road builder was thrown off its contract to build a motorway after failing to pay subcontractors and falling behind schedule. Commentators at the time claimed that the offer Covec put in to build the road was essentially price dumping, and impossible to achieve. "Covec's staff had no idea what Central and Eastern Europe is about. We thought it was a strategic investment, but for them it was just one of their 300 projects. They simply put much less weight behind it than we thought they did," Majman said.