The Czech Republic Puts Another Dent in China’s Relations with Europe

On 29 January, Petr Pavel emerged as the decisive winner of the Czech Republic’s presidential election. The country’s new president is a former chief of the General Staff of the Czech army and chairman of the NATO Military Committee, and an advocate for close European and transatlantic relations in Czech foreign policy. Since his victory, the president-elect has shown that his administration will be radically different from that of the outgoing Miloš Zeman, who had been China's chief endorser on the Czech political scene for the past decade.

Xi and Zeman's Farewell Call

In early January, Zeman had a farewell call with Xi Jinping. According to a communiqué published by the Chinese side, Xi elaborated on the successes in the two countries’ relations during Zeman's two term, 10-year presidency. Among the main achievements during this period, according to Xi, were the upgrade in cooperation between the two countries to the level of comprehensive strategic partnership, the near-tripling of Czech exports to China, and the growing popularity of the Czech Republic among Chinese tourists (a two-and-a-half-fold increase between 2013 and 2019). However, this list glossed over some other facts, including a significant increase in Chinese exports to the Czech Republic in recent years, along with Chinese disinvestments in the country. Moreover, Xi expressed hopes for the future, pointing out that both sides should respect each other's ‘key interests’ and develop contacts and communication at the highest level. Xi has also vaguely signalled that China would take more practical steps to develop multilateral cooperation with Central and Eastern Europe. This would indicate that China wants to halt any further weakening of the 16+1 (14+1) format, which has seen the departure of three states since 2021: Lithuania, Latvia and Estonia. The Czech Republic may well be the next to leave this forum.

According to a short statement from Zeman's office, the 45-minute conversation with Xi was initiated by the Chinese side, and concerned both bilateral issues and the current international situation. The Czech president reportedly told his Chinese counterpart that Beijing could play an important role in ending the war in Ukraine. Zeman also referred to restrictions on Czech companies operating in China, asking Xi to support the private financial institution Home Credit (PPF).

It was PPF – and more broadly, the interests of the Czech Republic’s richest person, Petr Kellner, who died in 2021 – that became the driving force and the main beneficiary of closer Czech-Chinese ties, the primary endorsers of which were Zeman and the Czech Social Democratic Party. The improvement in relations between the two countries led to Home Credit entering the Chinese market, while the Czech Republic opened up to the operations of the nominally private conglomerate CEFC, whose chairman, Ye Jianming had been nominated as an economic advisor to Zeman in 2015. In fact, the People’s Daily described CEFC’s activity as being among China’s strategic interests in the Belt and Road Initiative, calling the company a promoter of ‘going out’ and ‘bringing in’ (foreign investments) between China, the Czech Republic and Central and Eastern Europe more broadly. The history of CEFC, however, ended in scandal and allegations of corruption. Ye has not been heard from since his arrest in China in 2018; however, Zeman officially retained Ye in his advisory position for the next two years.

What are the President-Elect's Views on Czech Relations with China and Taiwan?

Pavel sealed his electoral success with a strong gesture towards Taiwan, which China is attempting to diplomatically isolate in the international arena. The day after his victory, Pavel had a phone conversation with Taiwanese President Tsai-Ing Wen, saying that the Czech Republic and Taiwan shared the values ​​​​of freedom, democracy and human rights; according to Pavel, Taipei initiated the call. The president-elect also expressed his hope for a personal meeting with Tsai in the future. In fact, Pavel signalled his intention to visit Taiwan if he became president during the election campaign. If this visit does indeed go ahead, then he will be the first sitting president from an EU country to visit Taiwan. Within a week of his election victory, Pavel also announced that he was open to meeting the Dalai Lama and Hong Kong dissidents.

In a congratulatory message on the occasion of Pavel's victory, the Taiwanese Ministry of Foreign Affairs pointed out that in addition to democratic values, the two countries shared close trade, investment, scientific, technological and cultural cooperation. Attention was also drawn to the issue of supply chain security, as well as joint efforts to help refugees from Ukraine. In addition, the communiqué highlighted that in a political statement from the Czech government last year, Taiwan was mentioned as a key partner in the Indo-Pacific region. In other words, both sides have indicated that as well as their commitment to democracy, they also share economic and security interests.

What Does China Think?

Mao Ning, the Chinese Ministry of Foreign Affairs spokesperson, was unambiguous in stating that the Czech president-elect's actions were seen as hostile to Beijing. Pavel's conversation with Tsai Ing-Wen is seen as a serious violation of China's internal affairs and ‘commitments made by the Czech side regarding the one-China principle’. However, it should be remembered that foreign policy in the Czech Republic is determined primarily by the government, which applies its own interpretation of the ‘One China Policy’ – and this does not imply recognition of Taiwan as part of China (for example, the text of the Czech-Chinese comprehensive strategic partnership of 2016 does not mention Taiwan at all). The president-elect responded on Twitter that he understood China's objections, but that as a sovereign state, the Czech Republic does what it believes is right, and relations with Taiwan – a democratic state – are fully in line with the country’s foreign policy.

Although Chinese diplomats have tried to dissuade the president-elect from talking to the Taiwanese leader, it is difficult to say whether China will react with retaliatory measures similar to those used against Lithuania after the opening of the Taiwanese representative office in Vilnius. First of all, China is in the middle of a diplomatic offensive against the EU, seeking to improve relations that have been damaged by Beijing's support for Moscow in the context of the war in Ukraine.

Moreover, using analogies from the recent past, it can be concluded that threats against the Czech Republic are unlikely to translate into real action. In January 2020, before the planned visit of the Speaker of the Senate, Jaroslav Kubera, to Taiwan, the Chinese embassy in Prague issued a letter in which it threatened the Czech authorities with economic consequences if the visit went ahead. Although Kubera's sudden death halted these plans, in August of the same year, his successor as Speaker of the Senate, Miloš Vystrčil, did travel to Taiwan.

However, for the most part, China’s threats of economic retaliation against the Czech Republic did not materialise. One exception was the cancellation of a contract which a Chinese company had signed with the Czech piano producer, Petrof. In fact, it was on a Petrof piano that Zeman played for Xi Jinping and then Russian Prime Minister Dmitry Medvedev during the China International Import Export Fair in Shanghai in 2018.

This limited realisation of economic threats is partly due to the relatively insignificant investment of Chinese companies in the Czech Republic and the small presence of Czech businesses in China (the involvement of Škoda, the most important Czech company in the Chinese market, is primarily related to the interests of the German automotive industry). On the other hand, Beijing’s reduction of diplomatic relations and application of informal trade sanctions against Lithuania, which even extended to third countries, shows that China can initiate serious steps when defending its ‘key interests’. Perhaps Pavel's current actions are not yet treated as official in Beijing – after all, the president-elect will not be sworn in until March. However, in the same month, Markéta Pekarová Adamová, the chairman of the Chamber of Deputies (the lower house of the Czech parliament), does plan to visit Taiwan. When Adamová recently discussed details of the visit with Taiwan’s head of diplomacy, Joseph Wu, she praised Taiwan for the assistance the island had provided to Ukraine and expressed the hope that Prague and Taipei would cooperate in the country’s post-war reconstruction.

In contrast, a year on, China's political and economic support for Russia is unequivocal, while Xi refuses to talk with Ukrainian President Volodymyr Zelensky – despite Ukrainian attempts to publicly persuade China to pursue a proactive policy of containing Russia. China is also a marginal actor when it comes to aiding Ukraine in the conflict, which Chinese officials are still refraining from calling a war. China’s humanitarian aid amounts to a mere ¥ 15 million (including ¥ 5 million delivered through the Chinese Red Cross). Furthermore, this donation can be interpreted as a gesture of gratitude to the Ukrainian authorities for their help in evacuating Chinese citizens from the warzone in March 2022.

What's Next in Czech Policy Towards China?

In an interview for the Financial Times, Pavel clearly stated that China is not a friendly country for Western democracies, has different strategic goals and is guided by different values. Therefore, in addition to closer relations with Taiwan, the Czech Republic is expected to withdraw from the 14+1 format in the near future. Until now, the formal decision to leave the Chinese multilateral format has supposedly been blocked by domestic politics – specifically, tensions between the centre-right government of Petr Fiala and President Zeman. Leaving the 14+1 formula would symbolically end the period of the Czech ‘restart’ with China, which was endorsed by Zeman on the grounds of economisation of foreign policy, a critical view of liberal democracy and escaping from the country’s ‘submission to pressure from the US and the EU’. However, in a broader context, the framework of Czech foreign policy towards China and Taiwan, as outlined by Pavel’s actions and declarations just days after his electoral victory, indicates that the new president will return to the country’s value-based foreign policy initiated by Václav Havel at the beginning 1990s, with an increasing focus on military and economic security.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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