By Richard Q. Turcsanyi
September 12, 2015
The label of China’s “bridge to Europe” has become something of a holy grail. Though no one clearly knows what that would entail, the phrase became hyped during the acceleration of Chinese relations with the Central and Eastern European (CEE) countries after the global financial crisis, and especially after opening up of the so-called 16+1 platform in 2011-2012. With recent news about flourishing Czech relations with China and announcements of various Chinese FDI in the country, the question might be whether the Czech Republic is the new (or yet another) Chinese “bridge to Europe.”
Poland and Hungary: Expectations and disappointments
Initially, a few years ago, Hungary and Poland seemed to be best positioned for the desired role. Poland could have been a natural “bridge” for China to Europe, as the biggest economy among the CEE countries. Poland established a strategic partnership with China relatively early on in 2011, and is regarded as an unofficial leader of the 16 CEE countries by China – in fact, it also provided the venue for Wen Jiabao to present his “12-point initiative.”
On the other hand, Hungary has been also trying to get the label of China’s “bridge” for itself. Positioning itself as a traditional Chinese friend in the region, building on its claims to the strongest presence of the Chinese diaspora and also the majority of Chinese FDI in the CEE region, Hungary felt it had a special relationship with China. Actually, Hungarian Prime Minister Viktor Orban went even so far to mention China as a possible political model for Hungary.
In fact, both Poland and Hungary play undisputable roles in China’s “One Belt, One Road” (OBOR) initiative. To reach Western Europe, which is the eventual destination of both the Maritime Silk Road and the Silk Road Economic Belt, the two countries are crucial in connecting Russia with Germany and the Greek coast with the heart of Europe.
However, interestingly, Poland and Hungary are at the moment not in the forefront of developing relations with China among the CEE states. There is even some feeling of disappointment that, despite their advantaged initial position and flourishing rhetoric from China about the dynamic future development of economic interactions (in particular Chinese FDI), not much has actually happened in the last few years, notwithstanding the establishment of the 16+1 framework.
Czech U-turn in Relations with China
Now, it is the Czech Republic which seems to be running fastest when it comes to relations with China among the CEE countries. It was not long ago that the country was perceived to be the most critical toward China among the EU countries, with a history of developing good relations with Taiwan and Tibetan representatives in exile. Yet last week, the country’s president, Milos Zeman, was the only incumbent head of state among the EU countries present in Beijing for the V-day parade on September 3.
This was already Zeman’s second visit to China after a state visit last year in October. Furthermore, the Czech foreign minister visited China in April 2014 in the first such visit in 15 years, and the Czech prime minister is expected to arrive in Beijing later on this year for the annual 16+1 summit of the heads of governments.
The recent visit of the Czech president was marked by impressive looking list of achievements. A Bank of China branch was recently opened in Prague and the first direct flight between Prague and Beijing is about to begin operations in late September.
Perhaps more interestingly, the CEFC, one of the biggest Chinese private companies with a base in Shanghai,announced a list of its acquisitions in the Czech Republic. It bought two historic buildings in the center of Prague, which it wants to use as headquarters for future European expansion. Together with that, the company got majority shares in the Slavia Praha football club and Lobkowitz beer company. It also bought minority shares in flight company Travel Service, which is a partial owner of Czech Airlines, as well as shares in the media companies Empresa Media and Medea Group.
The two countries have also raised other prospects for cooperation, such as exports to China of Czech beer, Skoda branded trams and metro cars, small and medium size planes, or medical equipment. Finally, after Zeman’s last visit to China, when he presented a plan for co-producing a cartoon Panda and Little Mole, this time he was accompanied by a football delegation headed by Pavel Nedved, the European footballer of the year in 2003, who wishes to support the development of football in China. It should also not be forgotten that the number of Chinese tourists in the Czech Republic has been growing rapidly for a few years already and is approaching 300,000 per year, more than triple the amount of four years ago.
Doubts about the Czech “Bridge Prospects”
It is, however, unclear whether the Czech Republic will become an eventual Chinese “bridge to Europe.” On one hand, there are a number of semantic questions. What does it mean to be a Chinese bridge to Europe? Should there be a single bridge, or a number of them? And does China actually need the bridge?
With the OBOR initiative gaining predominance in Chinese diplomatic thinking, the whole idea of a “bridge to Europe” has turned into a more infrastructural domain. In this regard, as already mentioned, the Czech Republic does not play a comparable role to Poland and Hungary (and some of the Balkan countries). The country is, however, well-positioned to serve as a centrally located base for Chinese companies in Europe, with close geographical proximity to major Western European markets and a good ratio between quality and the cost of labor infrastructure. While the Czech Republic arguably has a rather favorable location from this perspective, other CEE countries do not lack much. All in all, if China wants to have a bridge to Europe, it would be unwise to have a single one, if it can have multiples. The rational policy for China would be to have as many “bridges” as possible – with “bridges” meaning (in this context) simply reliable and useful bases for further regional and European expansion.
On the other hand, the current level of Czech relations with China should not be seen as a new, stable norm. It might be tempting to interpret the Czech U-turn as evidence that the country has changed its mind and found out it is better to cooperate with China rather than criticize it. However, this view would miss complex Czech domestic realities. The recent shift in Czech China policy is the result of a coincidental change of both the government and the president (the Czech Republic has a parliamentary political system, with the premier as a head of the government being chosen from among the strongest political party in the parliament and the president being directly elected by public since 2013). The double change brought to power social democratic forces.
Czech social democrats have traditionally supported pragmatic economic diplomacy, as opposed to the conservatives who call for more value-laden diplomacy. The recent changes in the government and the president did not end this domestic dichotomy — quite the opposite. It escalated public discussion about Czech foreign policy, and China policy in particular has become one of the major ideological and policy battlefields in public debate.
Czech media – which traditionally has taken a rather critical position vis-à-vis China – should be also considered as an important actor. Therefore, while the Czech president and his country enjoyed unprecedented positive attention from the Chinese media during the visit to China, at home Zeman is facing a much more hostile media and criticism from part of the public. Some have even accused Zeman of selling national pride and values for economic benefits. More nuanced criticisms point out that, while it is okay to develop relations with China, it sends the wrong signal for the president to visit China twice in a year but not visit the United States or Britain.
Others even dispute the economic benefits, mentioning that at the moment the economic deals include only acquisitions and therefore would not benefit the Czech economy. In fact, some argue that it is mainly the business circles close to the president who benefit from relations with China instead of the whole country. The critics also believe that some of the benefits are not due to increased government efforts: Chinese tourists come mainly because of the beauty of the country, and Chinese would be buying more Czech products regardless, simply because they are getting richer and foreign products are trendy in China.
Positive intermezzo or a long-term norm?
The Czech Republic seems to be enjoying a golden moment in its relations with China, demonstrated by the attention it received during the V-day parade – to a large extent caused by the absence of other Western leaders. It might be that China wants to reward the Czech Republic for its support. Obviously, the level of direct state support is not clear as the most of the investments announced come from the private company CEFC. But the level of positive attention should have a positive impact on investments, exports, and tourism in the medium to longer term.
Arguably, the Czech Republic is in a position that it allows it to be a strong partner for China and Chinese companies in the CEE. It has not been perceived as anti-EU (as Hungary often is), while at the same time it has relatively good relations with Russia, unlike Poland. The country is the western-most country from the group of 16 CEE countries, its GDP per capita is among the highest in the region, and its national companies have perhaps the most potential for exports to China. It also ranks high for prospective tourism.
These factors have been recognized by China, as seen in an analysis from Liu Zuokui of the Chinese Academy of Social Sciences. In Liu’s typology, the Czech Republic ranked third in investment prospects out of the 16 CEE countries, after only Poland and Hungary. Looking closer, however, Liu says that the Czech Republic only lagged behind in the category of political relations. With significant improvements being made in the past two years, the Czech Republic’s ranking might increase and even gain first place according to this methodology.
What remains to be seen is whether Czech domestic politics will derail the process of dynamically developing relations. A related question is whether the high expectations of the current Czech administration, which has put a significant amount of its political capital into developing relations with China, will actually materialize — something which has not happened in the cases of Poland and Hungary. From this perspective, the relationship might be in something of a race against time. If Chinese investments, Czech exports, and other benefits from the countries’ cooperation become apparent before possible future shifts in government, it might well be that the country will become an important Chinese economic and maybe even political partner in the region. And this could give the Czech Republic a position as a Chinese “bridge to Europe” – though perhaps one of many.
Richard Q. Turcsanyi is a Ph.D. candidate in international relations at Masaryk University, Czech Republic; Deputy Director at Institute of Asian Studies/CENAA, Slovakia; and Associate at European Institute for Asian Studies, Brussels. His research interests include power analysis of Chinese foreign policy and the relations between China and (Central) Europe.
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