Promise of major increase in Chinese investment in Czechia rings hollow two years on

Miloš Zeman, photo: Khalil Baalbaki

Two years after Chinese President Xi Jinping’s visit to Prague, planned investment in the Czech Republic strongly backed by his Czech counterpart Miloš Zeman has fallen well short of the mark.

Miloš Zeman,  photo: Khalil Baalbaki
Two years on, words by Czech President Miloš Zeman at a joint-press conference with his counterpart Xi Jinping have begun to ring increasingly hollow. Then, the head of state said that planned investment had far surpassed his original estimate making the following ‘triumphant’ statement.

“If I estimated that the volume of Chinese investment this year would be 45 billion crowns I was hugely off the mark. In fact it will be 95 billion crowns this year alone.”

The 95 billion crown claim even two years on, however, remains unfulfilled and it is not even close. Final numbers just confirmed by the Czech National Bank put foreign investment in the Czech Republic by China in 2016 at far less. The bank’s spokeswoman Markéta Fišerová told Czech Radio’s flagship Radiožurnál station more:

“By the end of 2016, Chinese direct foreign investment in the Czech Republic was 17 billion crowns.”

And instead of growing in 2017, Chinese investment was less than 6 billion (5.8 billion to be exact), for a total of 23 billion crowns by the end of the year, just over half of the president’s original, unmodified prediction for a single year alone. Czech Radio reported that the president’s spokesman Jiří Ovčáček had declined to comment, referring its reporter to the Czech-Chinese Chamber of Commerce and Prague’s Silk Road Institute headed by former foreign minister Jan Kohout. He explained that investments had dropped following steps by the Chinese government against capital exports.

Jaroslav Tvrdík,  photo: Štěpán Kotrba
“That means a ban on investments like football clubs, hotels and other entertainment venues.”

It is in such areas, criticized by some economists already a year ago as “trophy acquisitions” that the biggest Chinese investor, CEFC, is doing business. Czech Radio said it had tried to contact the head of its Czech branch, Jaroslav Tvrdík, a former defense minister who also heads the Czech-Chinese Chamber of Commerce, to ask for his response to developments, but without success.