Bilateral agreements aim to pave business boom between Czech Republic and China
Business is the overwhelming theme of the Chinese president’s trip the Czech Republic. For supporters of the warmer relations between Prague and Beijing, the payoff will be Chinese investment, industrial, research, educational cooperation and jobs. For the doubters, the price in curbing criticism of China is high and they are skeptical about the returns.
“The company Škoda Auto, which is our most successful company, will during the next five years invest 60 billion crowns to expand its manufacturing facilities in the Peoples’ Republic of China. I also value the investments of our aviation industry there and I could go on and on.”
Zeman was speaking after the signing of a host of bilateral agreements covering investment, financial regulation, the health sector, industrial zones, and aviation. The main agreement makes the Czech Republic a strategic partner for China. Other business deals should be inked on Wednesday.
Figures out Tuesday showed that the value of Chinese investments in Czech companies more than doubled in 2015 compared with a year earlier. But even that so-called first wave of investment still puts the Chinese way down in 21st place among foreign investors in the country.
Minister of Finance and ANO leader Andrej Babiš was part of the delegation welcoming the Chinese president to Prague Castle on Tuesday. But earlier he has played down the benefits that Chinese investment might bring to the state finances.
“It is mostly private companies that are buying firms. They are buying real estate and the good thing to come from that is that there is some income from taxes on change of ownership but this is pretty much small change.”
Czech media on Tuesday highlighted how neighbouring countries such as Poland and Slovakia also experienced the short-lived Chinese euphoria during presidential visits to their countries over the previous five years. They too received strategic partner status.
