China and the Czech Republic, a recent political shift

By Gatien Du Bois & Michaela Davidova | 29 June 2015

To quote this document: Gatien Du Bois & Michaela Davidova, “China and the Czech Republic, a recent political shift”, Nouvelle Europe [en ligne], Monday 29 June 2015, http://www.nouvelle-europe.eu/node/1906, displayed on 20 February 2018

Václav Havel used to say that his life was made up of a number of paradoxes. The life of the Czech Republic in its relationship with China is similar. It appears to follow a tumultuous path, mostly guided by ideological reasoning. The recent "reset" in the relationship with China, carried by left-wing governments, put the economy first but the situation could change in case of political alternation.

China and Czechoslovakia during the Soviet regime

The relationships between China and the Czech Republic began more than 65 years ago when on 6 October 1949 Czechoslovakia (as a predecessor of the Czech Republic) recognised the newly established People´s Republic of China. Until the collapse of the Soviet regime in Prague, "the relationship between the two countries followed a similar path to the relations between China and the USSR, simply because the latter played the “Big Brother” of Czechoslovakia" (Martin Lavicka, 2014).

The cooling down of Czechoslovak and China relations were particularly visible after the Sino-Soviet split in the 1960s. Nevertheless, Beijing condemned the repression of the Czechoslovak revolution by the troops of the Warsaw Pact because, at the same time, there was a confrontation between China and the USSR at their border. The People´s Republic of China was focusing its attention on the dissents inside the Soviet Bloc, and offered its help to Romania, for example, in case such events affected the country.

Since the end of the 1980s, trade relations between Prague and Beijing were gradually reduced. This was due to the transformation of the Czech economy and the unwillingness of China to abandon barter trading for a standard means of international trade.

From criticism to no troublemaking! On Czech politics towards China since 1989

After the fall of communism, official government-to-government contact cooled down. No high-level official visit between representatives of the Czech Republic and China took place until 2004. Of course, one can observe the pursuit of a routine bilateral agenda, motivated by economic interests on both sides.

With President Václav Havel, Czech foreign policy toward Asian countries started to follow a relatively unique path, different to the Western European countries. The subject of human rights abuses became one of the decisive points when dealing with foreign countries. In January 1990, President Havel officially invited the Dalai Lama to visit Prague. His visits to Prague became quite regular after that. The vast conservative right wing majority of the population supported Tibet and Dalai Lama. During this period of stagnation in the Czech Republic and China’s relationship, contacts with Taiwan, by contrast, flourished. The relationship between Beijing and Prague sunk to a new low in 1995 as the Czech Republic allowed Taiwanese government officials to arrange a state visit to their country. At that time, the Czech Republic was openly supporting a "Two-Chinas" policy and Taiwan's re-entry into the United Nations. Nevertheless, this policy was often criticized by technocrats for hurting the Czech economy and affecting business opportunities in China - a country where Czechoslovak companies used to have a good reputation and favourable access to its markets.

Little by little, business interests won over moral reasoning. In early 1996, the relationship between the two countries improved as the Czech Republic affirmed a "One-China" policy, supporting territorial integrity of China, including Taiwan and Tibet. Havel's idealism was balanced with pragmatic posture by the government (led by Vaclav Klaus) and business circles, which were seeking a way of expanding trade and investments into China. In May 2009, China and the Czech Republic celebrated sixty years of diplomatic relations. Chinese Premier Wen Jiabao met with Czech President Václav Klaus and the then Czech Prime Minister Jan Fischer for talks on improving bilateral trade, environmental protection and building mutual trust. In April 2012, Wen Jiabao announced a 12-point Initiative for cooperation between 16 Central and Eastern European countries (CEE) and China. The Czech Republic welcomed the initiative and considers the "Warsaw Initiative" (often called "16 + 1") as a useful platform to enable more bilateral contact. The frequency of high-level contact between the two countries has increased in the last years.

But the real "reset" in the relationships with China at governmental level dates back to 2013. The end of Petr Nečas' (right wing) cabinet also helped. Traditionally, left-wing governments were supporting more Chinese investment and even Chinese high-level officials welcomed the role played by the Czech Social Democratic Party to strengthen the friendship between the two countries. Hence, when President Miloš Zeman appointed Jiří Rusnok as Prime Minister in June 2013 it created a more positive environment for China to invest in the Czech Republic. Bohuslav Sobotka's government, which succeeded Rusnok's cabinet, follows the same trajectory.

One can clearly identify a significant shift in the Czech policy toward China. In October 2014, Czech president Miloš Zeman met Chinese counterpart Xi Jinping in Beijing. Xi expressed his desire for a new start in bilateral relations. During his visit the same year, Foreign minister Lubomír Zaorálek confirmed "that the Czech Government supports the "One-China" policy, that it does not want to interfere with China’s internal affairs and that it does not recognize the Tibetan exile government". At the time, he was criticized by Czech human rights organizations, some Czech right-wing parties (which accused the government of depreciating the legacy of Vaclav Havel) and civil society, because he made the promise not only on behalf of the present government, but on behalf of the country. In other words, in the name of the Czech Republic, he trades human rights for business. Moreover, the Czech Republic does not maintain diplomatic relations with Taiwan as Miloš Zeman said he believes that Taiwan will soon be peacefully united with continental China.

Chinese presence in Czech Republic

Relations, trade and tourism between China and the Czech Republic greatly improved since the 1990s; and in the 2010s, agreements were made for more thorough economic improvements. At the Warsaw "16 + 1" summit in 2012, an office for cooperation between China and the region was established, with special credit lines (with a total value of up to 10 billion dollars) and an investment cooperation fund. The goal is to broaden the cooperation and exchange of experts in economy, business, tourism, transport, culture and education. It serves as another plus to the bilateral cooperation between Beijing and Prague. Miloš Zeman's visit to China in 2014 was important for acknowledging the economic cooperation and enabled the finalization of agreements between Chinese and Czech companies. In 2014, Chinese investments in Czech Republic amounted to almost 3.1 billion euro. Currently, the People´s Republic of China is currently the fourth largest trade partner of the Czech Republic.

Chinese companies are investing more and more in the Czech Republic. Advantages include a good central location in the middle of Europe and a cheaper, educated labour force in comparison to Western Europe. Companies like Changhong (TV, refrigerators, washing machines and other home appliances), Dalian Rubber & Plastics Machinery and Yapp Automotive Parts have opened factories in the Czech Republic. Chinese projects in the country also concern Citic Marmes Bicycles CZ, s.r.o. (bike design and production), Shanghai Maling Aquarius and Shandong Linyi Yuli (food production), Huawei and ZTE (telecommunication sector), Shanxi Yuncheng Plating Group (printing machinery) and Beijing Fight Company (crystal production). Chinese firms are also interested in taking part in the Czech project envisaging the construction of new nuclear reactors. However, the Czech government is cautious about this, since this sector is seen as strategic. On the financial side, strategic co-operation between the Czech-Slovak financial group J&T and CEFC China Energy Company will lead to opening a branch of Bank of China in the Czech Republic. Chinese financial presence in the Czech Republic should bring more intense cooperation, attract Chinese investments and support Czech exporters in China. In addition, the Czech application to join the Asian Infrastructure Investment Bank (AIIB) is currently under consideration.

Economic cooperation will also be supported by new direct flight connections from Prague to Beijing with Hainan Airlines (and planned route from Prague to Shanghai). The connection between the two capitals should be operational in October 2015. These projects are strongly supported by the Czech government, in addition to a plan to create economic and technological zones for Chinese investors in the Moravia-Silesia Region.

The Czech Republic is also working to ease the way for Chinese tourism and highlight the country’s tourist attractions - with Prague presented as a must-see destination on a tour of Europe. In 2013 the Czech Republic hosted 174,000 tourists from China. Recently, the first ever Chinese movie filmed in the Czech Republic premiered in Beijing. It is highlighting some of Prague’s most beautiful locations and is expected to attract more tourists to the Czech capital. In February 2015, Czech public television sold a vast number of travel documentaries highlighting places of interest around the country to the China Central Television. Just like the political shift towards China, there is a (almost invisible) shift in the attitude of the Czech media when referring to China. For a long time, the Czech audience was used to hearing rather critical news about Chinese society, environment and human rights issues. However, this changed recently when the Chinese correspondent of Czech TV was replaced with a new one, who appears to be less "critical" and investigative.

The Chinese cultural and educational diplomacy is also active in the Czech Republic with the opening of the first traditional Chinese medicine clinic in Hradec Králové in June 2015 and exchanges in science, technology, health and culture. A growing number of students studying in the other country is facilitated by the Czech government's welcoming policy for Chinese visa applicants. Last but not least, more and more Czech regions and Chinese provinces are establishing partnerships (dozens of pair-cities are visible).

Conclusion

It appears that the Czech Republic, which recently "reset" relations with China, is looking for economic deals with China at any cost. President Miloš Zeman presents his concept of "economic diplomacy" as successful but the reality might be slightly different. It is rather Beijing that is fulfilling its own long-term intention of using the CEE countries as a gateway to Western Europe.

In addition, the Czech political line must deal with the country's EU engagement. In 2013, Czech Prime Minister Jiří Rusnok wanted to submit his own declaration of cooperation, written in a more accommodating spirit than Brussels' position, at a "16 + 1" meeting  in Bucharest. But Rusnok finally left his text at home after the intervention of European Commissioner for Trade, Karl de Gucht.

Nevertheless, there is clearly a new tendency in Czech-China relations, focusing more on business and less on "controversial" topics, such as Chinese political dissent, human rights, the matter of Tibet and Xinjiang, environmental and economical issues or politics. In this vein, the Czech Republic is lobbying for re-evaluating the arms embargo towards China introduced in 1989 in the EU. For the moment, the Czech Republic does not permit any export of lethal weapons or any deliveries that may essentially strengthen the military power of China. However, a limited export of some categories of military equipment is allowed. The risk is, of course, that it will degrade itself in front of its European partners.

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