Czech Republic Insight

Czech Republic, China’s Gateway to Europe? (1/3): The honeymoon

Prague, Czech Republic – Overthrowing the all-powerful German neighbor, China became in 2010 the first market of Škoda, the Czech Republic’s flagship car manufacturer and engine of its export-driven economy. Today, China accounts for nearly 30% of global sales and one fourth of worldwide production of the iconic Czech company, part of the Volkswagen Group since 1991.

Many will claim that this is a striking symbol of the incredible state of relations between China and the Czech Republic. And indeed, Škoda’s breakthrough in the Middle Kingdom is the ultimate success-story of Czech-Chinese ties. But let’s not forget that it has absolutely nothing to do with Xi’s flagship Belt and Road Initiative and predates the rapprochement between Prague and Beijing. Instead of a symbol, it may simply turn out to be an exceptional oddity.

Czech diplomacy looks to the (Far-)East

Czechs have not always been in favor of strengthening ties with China. There was a time when Prague was, on the contrary, the hotbed and breeding ground of the most ferocious opponents to a tightened alliance with the world’s second largest economy.

During the 1990’s, the Czech foreign policy was mainly focused on securing the country’s “return to the West” – aka. the EU and NATO memberships – and the Far-East wasn’t part of the priorities. Moreover, Czech diplomatic action was strongly influenced by the humanistic approach of first Czech president and former anti-communist dissident Vaclav Havel who clearly emphasized human rights and democratic governance.

When it came to China, Prague expressed strong support to the Dalai-Lama and went so far as to invite on a regular basis Beijing’s bête noires, including Taiwanese Prime Minister and various Chinese dissidents, like Liu Xiaobo, Nobel Peace Prize who died in 2014 and whose Charter 08 was directly inspired by the Charter 77 of the Czechoslovak dissident movement. In short, Czech-Chinese relations was at an all-time low.

Things started to change in the early 2000’s. Czech President Vaclav Klaus (2003-2013) attempted to improve relations with Beijing, with the help of a behind-the-scenes network of Czech politicians often linked to the Social Democratic party, and made an official trip to China in 2009 to try to reset relations.

Soon after, Prime Minister Petr Necas (2010-2013) followed suit and, after mocking the “dalailamism” bias of former Czech leaders, moved to bring the Czech Republic closer to China – highlighting the numerous economic and business opportunities, which was also starting to appeal to politicians from the centre-right ODS party.

So contrary to a widespread opinion, the newfound fondness of Czech political and business circles for China is, truth be told, not so new and has been long in the making: it didn’t wait for Milos Zeman to be elected as President nor for Xi Jinping to launch his flagship Belt and Road Initiative.

A honeymoon embodied by Czech President Milos Zeman

But the early 2010’s did mark a turning point. The Czech Republic, also part of the 16+1 initiative linking China with the Eastern half of Europe, officially joined the Belt and Road Initiative in 2015 and quickly became, through the voice of Czech President Milos Zeman, one of Europe’s most vocal and loyal advocates of stronger ties with China, whatever the costs.

In 2015, Milos Zeman was the only European head of state to attend the military parade held in Beijing to commemorate the end of the second world war. Calling Xi Jinping his “best friend” and pledging to turn the lands of Bohemia and Moravia into “China’s gateway to Europe”, M. Zeman became a short-lived celebrity of Chinese state-media. Although sparking a backlash in Europe, this gesture was generously rewarded by Xi Jinping’s high-class visit in Prague in March 2016, the peak of the carefully-trimmed honeymoon between the two countries.

Although “more symbolic than truly substantial”, this visit cemented the new situation and was a strong indicator of the Czech Republic’s new approach toward China: while Xi Jinping promised 10 billion euros worth of investments, not a word was uttered on human rights issues and protests held on the side-lines of the summit were enthusiastically repressed.

Although Milos Zeman may very well embody Prague’s pro-China stance, the controversial president is only the tip of the iceberg: most politicians from across the spectrum have either encouraged this alliance or remained silent on the issue. Meanwhile, any breach to the official line is severely punished.

This was, for instance, the case in 2016 when then-Culture Minister Daniel Herman agreed to meet in private the Dalai Lama: after news about the planned meeting broke, the minister was publicly disavowed by all the top state representatives, including the President and Prime Minister, who went to great lengths to reassure Beijing on their continuous support – or continuous “servitude”, critics corrected.

Whatever it is, a new era started. The Czech-Chinese strategic partnership was now being promoted and strengthened in all areas, and not only at the government level. Thanks to the launch of three direct lines between Prague and China (Beijing, Shanghai and Chengdu), the number of Chinese tourists skyrocketed in a few years and reached 620.000 visitors last year – only topped by Germans, Slovaks and Poles. Bilateral forums and common initiatives multiplied, like the ‘China-Czech Cooperation Centre under the Belt and Road Initiative’ or the ‘Czech-Chinese Friendship Association’… hell, even a traditional Chinese medical centre popped up in the city of Hradec Kralove.

Czech Republic-China relations: an opaque influence strategy at the highest level of government

But the heart of China’s influence scheme is happening behind closed doors and relies on a small but influential group of people, more or less closely linked to president Zeman and China’s CEFC.

Among them, we can find: Jaroslav Tvrdik, member of the Czech Social Democratic party, former minister, president of the Czech-China Chamber of Mutual Cooperation since 2012, China advisor of ex-Prime minister Sobotka and vice-chairman of CEFC Group Europe’s board of directors; Miloslav Ransdorf, Communist MEP; Jan Kohout, diplomat and advisor to Zeman in 2014, founder of the New Silk Road Initiative in Prague in 2015; Stefan Fule, former right-hand man of Tvrdik at the Defense Ministry, ex-ambassador to NATO and former European Commissioner, member of the advisory board of CEFC; Marcela Hrda, Czech Airlines executive when Tvrdik was CEO and chairman of the board of directors of Empresa Media; or Tomas Buzek, former CEFC spokesman and member of its board of directors.

This strategy has undoubtedly proved handy in the past – at least for the interested parties. A special mention should be made of the PPF Group, owned by the country’s richest man Petr Kellner, whose retail banking company Home Credit has been operating in China since 2007. Thanks to intense behind-the-scenes lobbying from Jaroslav Tvrdik and associates, Home Credit was granted a local licence for consumer credit services in 2010, followed by a national licence four years later.

Although this has been perceived as one of the most resounding successes of the Czech Republic’s close relationship with Beijing, it also gave credence to the idea that the Czech foreign policy was improvised at the discretion of unelected officials following the whims and fancies of multi-billion deals approved behind closed doors and that mainly benefited a handful of the country’s richest oligarchs – without accountability, transparency or public debate. A growing number of voices have started to criticize this state of affairs as China’s initial promises have largely failed to materialize.

Source: Chinfluence

Headed by Kafkadesk's chief-editor Jules Eisenchteter, our Prague office gathers over half a dozen reporters, editors and contributors, as well as our social media team. It covers everything Czech and Slovak-related, and oversees operations from our other Central European desks in Krakow and Budapest.