Chapter 2: Political Cooperation
2.5. Sustainability and Institualization
2.5.1. Czech Identity After Joining the EU
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divided into two groups, after the election, supporters of the loosing candidate
remained critical towards winner of the presidency. Voice of criticism is mainly heard from Prague, where, as I believe, is so-called headquarters of Zeman’s presidency election opponent. Those non-supporters of Zeman create waves of criticism time to time and they often criticize everything that President Zeman says or does. It was no surprise then that Zeman’s visit to China was criticized, followed by criticism President Xi’s visit to Czech. There were several protest prior to the Xi’s visit in Prague, which I believe were also supported by non-supporters of Zeman. It is hard to predict if this mood will change with new president or if it remains.
2.5.1. CZECH IDENTITY AFTER JOINING THE EU
Another important factor for sustainability of Czech-China relations is a question for how long and how much will China see the Czech Republic as a strategic partner. From my research is obvious that China’s interest not only in Czech but in V4 countries raises with these countries’ involvement with the EU. China strategically cooperates with countries to gain greater influence in the EU. The question is how much does the Czech Republic want to be involved in the EU related issues? Which leads us to another question: is there something like “European identity” recognized by Czech people? A survey made by Klicperova-Baker and Košťál (2009) when 1037 Czech respondents were asked about their identity shows that majority of them felt being European, the part of the EU and democratic Europe, with 14% leaning strongly towards this feeling, 43% leaning and 24% with mixed feelings. 9% respondents felt strongly Slavic/Eastern European, 33% leaning were leaning towards this idea, 25%
expressed mixed feelings. 8% strongly voted for being Westerners, 25% were leaning towards being a Westerner, 25% had mixed feelings about it. Survey shows that Czech people rather feel European than Eastern European or Slavic, which would more correspondent with V4; however, this comparison was created for European vs.
Western, not to compare how European vs. Czech society of the Czech Republic feels. For China these results could be interesting as they probably rather cooperate with a country that apart from their own identity they feel European, not Slavic, nor Western because it is the EU, what is China trying to reach by coming to Europe.
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Langhammerová (2002) in her study examined “Czech identity” in the process of accession to the EU. Despite the fact that the Czech Republic was established in 1993, Czech identity goes many centuries back. “If the Czechs are asked about their typical characteristic, about the Czech national identity, they most frequently
characterize themselves as a democratic, civilized, well-educated and cultured nation that always belonged to Europe. […] Most of the Czechs consider themselves
Europeans and list a variety of geographical, historical, social, political, cultural, economic and religious reasons why the Czechs are part of Europe.”
(Langhammerová, 2002, p. 4). Based on my personal experience, I believe it is necessary to explain what “European” means to Czech people. When Czech people refer to themselves as Europeans, they likely think of themselves as Western
Europeans, not Eastern. Being called Eastern European associates a connection with Russia, Czech people, as well as people from other V4 countries are very sensitive about this term. Because of the history, when Czech people were occupied by the Soviet Union, they do not want to be connected with “Eastern Europe” again.
Dividing Europe into Eastern and Western refers to economic development, cultural connection, overall wellbeing and development and modernization, while West means all that, East means the opposite.
Joining the EU created two groups of European identity, both represented by former Czech Presidents – one by Václav Havel and the other by his successor Václav Klaus (Klicperova-Baker & Košťál, 2009; Langhammerová, 2002). Klaus, as the realist, was supportive of the Czech identity and Czech national interest, on the other hand, Havel, as idealist supported, saw a future in “European citizenship”
(Langhammerová, 2002). Considering that Klaus was president until 2013, his support of Czech identity is more current and can influence Czech public now. In my opinion, a lot of Czech people share the same opinion as Klaus, there is also a
significant portion of Czech people who do not seem to care about their identity, this idea also supports Langhammerová (2012) by adding that the biggest Czech concern is economy and issue such as identity is discussed mainly by scholars, not by society.
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CHAPTER 3:
ECONOMIC COOPERATION
Some scholars argue that when we are talking about politics, it is not necessary to consider the economy as one of the important elements. Some believe that politics and economy are hard to separate. Neoliberalists believe it is economics what matters the most in the global order and politics are there only to support smooth economic cooperation. This chapter will examine economic sphere of China cooperation and try to find an answer how depending this sphere is on Czech-China foreign relations.
Recently, Czech and China relations have been following a positive path.
Czech-China economic cooperation undergone changes along with a regime change in 1989. Fürst (2004) in his report mentions that the Czech Republic is trying to re-establish a good economic cooperation with China, but it has not reached its level from the past before 1993.Meanwhile, cheap Chinese products are a big concurrence to Czech products on the Czech market. This often makes Czech people feel uncertain about the quality of Chinese products and at the same time, Czech businessmen are unhappy about their unequal conditions while entering the Chinese market. Those two factors can in future help to encourage Czech society to be more hostile towards China. Fürst (2004) also believes that the Czech Republic missed her chance when Czech supported China in joining the World Trade Organization (WTO) and wanted nothing in exchange. China joined the WTO in 2001. Fürst (2004) suggests it would have been smart if Czech has used the support of China in joining the WTO as a tool during bilateral negotiations to gain some profit. Fürst made a good point; however, the Czech Republic does not seem that significant for China, thanks to her size and economic power, so even then it is hard to guess whether China would agree to Czech possible requirements, or rather try to avoid coming up with a conclusion favorable for Czech before joining the WTO. Despite this fact of a possibly missed chance, the current Czech-China economic relations are very fruitful. The Bank of China branch was opened in Prague in 2015; there was also opened a direct flight between Prague and Beijing (Turcsanyi, 2015). A new opened direct flight will also increase the
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number of tourists coming from China to Czech. Even before the opening of the direct flight, a number of Chinese tourists visiting the Czech Republic continuously increases. In 2014, there have been 221,830 Chinese guests accommodated in Czech hotels and other accommodating properties, that was a 21.6% increase compared to the year 2013 (Otava, 2014). We can only imagine how much will this number increase by 2016 when the direct flight will start operating regularly.
Undoubtedly, Czech-China economic cooperation is boosting; businesses on both sides recently feel more encouraged towards the further cooperation. While in China Czech products are not so famous, in Czech there are plenty of Chinese products. Chinese businessmen coming to Czech can enjoy very good conditions provided by Czech, compare to conditions for Czech businessmen in China (Fürst, 2004). Fürst (2004) sees that negatively. Some might agree with him, but we should remember that the Czech Republic is a small country, also not very strong and rich compare to the Western European countries. So logically such a country as the Czech Republic will try to attract foreign investors, in this case particularly Chinese, in the best way they can. For this reason, we could see it as a positive step that the Czech government wants to provide good conditions for Chinese businessmen coming to the Czech Republic. But the question is if the Czech government is willing to provide better conditions for Chinese businessmen while in China Czech businessmen do not receive the same, is there a positive future for Czechs coming to China? Despite Fürst’s negativism, there are still some scholars who see the Czech Republic as a significant country when it comes to the foreign relations of China. According to the Szunomár (2014), the Czech Republic is one of three EU member countries that are willing to stand up to China politically and economically. Szunomár’s statement could increase hopes for more positive future for Czech businessmen. The only obstacle could be connected with the fact that when Szunomár was making this statement, she was probably looking back at Czech previous Presidents, especially Havel, while talking about “to stand up to China politically”, the current Czech President seems very supportive of China and we have not heard any criticism of China from him. Actually, the current Czech President Zeman helps to improve Czech-China relations rather than criticize China. That might seem a negative step for
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Czech, but the truth is that Zeman tends a lot more to improve economic cooperation between Czech and China than his predecessors, especially compared to Havel.
According to the Embassy of the Czech Republic in Beijing, since 2004 the Czech Republic signed and revised following major bilateral agreements with China (MZV, 2012):
1. Agreement on economic cooperation between the government of Czech Republic and the government of People’s Republic of China (2004)
2. Agreement between the government of Czech Republic and the government People’s Republic of China on the encouragement and mutual protection of investments (revised, 2006)
3. Protocol on cultural cooperation between the Ministry of Culture of the Czech Republic and the Ministry of Culture of the People's Republic of China for the years 2007−2011 (2008)
4. Agreement on Educational Exchanges between the Ministry of Education, Youth and Sport of the Czech Republic and the Ministry of Education of the People´s Republic of China for the years 2008−2011 (2008)
5. Agreement between the government of Czech Republic and the government of the Hong Kong Special Administrative Region of the People's Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (2011)
6. Agreement between the government of Czech Republic and the government of the People's Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (revised ,2012) Especially an agreement on economic cooperation signed in 2004 is very important for the Czech Republic, this agreement shapes nowadays economic relations with China. Recently, China has shown an interest in economic cooperation with the Czech Republic, in my opinion, the big share of this interest has Czech’s joining the EU. The European Union is China’s biggest trading partner and China is the EU’s second-largest trading partner, after the United States (MZV, 2016).
To conclude, after the Czech Republic was established, Czech-China
economic cooperation was stagnating. At the beginning, there was not a big interest
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on both sides, later on a greater cooperation developed, however Czech was not so successful on Chinese market, on the other hand, China was successful with their cheap products on Czech market. A negative side was that it created a perception among a Czech society that China is a producer of cheap products and it would be difficult now for China to change that perception, if they were planning on exporting higher quality products. Based on data found, during recent years, Czech export to China is improving, which is a positive sign on achievement on both sides.
3.1. CHINA’S INVOLVEMENT IN THE CZECH REPUBLIC The number of Chinese people in the Czech Republic from 2004 to 2014 increased (Figure 2). Since joining the EU in 2004 the Czech Republic experienced growing number of Chinese coming to Czech. During the period, 2005−2007 numbers were increasing rapidly. Since 2008 until 2014 we can see that the number of Chinese is Czech is relatively stable, slowly growing. The Czech Republic joined the Schengen area program in 2007 and since then tourists coming to Europe can enter the Czech Republic if they were allowed to enter the Europe in any EU member country. However, this fact should not directly influence numbers for those Chinese who stayed in Czech for more than 90 days with the Czech visa (Figure 2); we also need to keep in mind that China is not one of the countries that can enter EU without a visa. In fact, the number of Chinese with the visa for more than 90 days did not go over 100 in the year 2014. The possible explanation can be provided by Uherek (2002) who explains the decline of foreigners applying for 90 days’ visa. Uherek (2002) first explains that Czech is mostly used by migrants as a transit country and if they decide to stay, the reason is a hope for a successful economic activity. Those over 90 days’ visa holder can be either businessmen that need to stay longer in Czech, or students who come to the Czech Republic for an exchange program. Full-time degree seeking students will most likely have a residency over 12 months. Some experts elaborate about the fact that Chinese coming to Czech recently prefer to stay rather a shorter time, considering mostly tourists. In 2016 it is expected that the Embassy of the Czech Republic in Shanghai will issue three times more Czech visas for Chinese people than three years ago, the estimate of Chinese tourists coming to
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Czech is 400,000 and more than 500,000 in 2017; if these numbers come true, China will become no.2 in Incoming tourism in the Czech Republic, right after Germany;
Chinese tourists are not only coming to Czech in very high number, but they are also willing to spend more money than many other tourists – in 2015 Chinese tourists spent more than $165 million US dollars, for 2017 this amount is expected to double (Hebnar et al., 2016)11. It is obvious that Czech is becoming more attractive for Chinese, which is very desirable in the current situation, especially considering a lowering number of Russian tourists coming to Czech.
I argue that one of the factors showing us the level of understanding and prosperity of mutual relations of two countries is the number of foreign people living in the country. I examined if the number of Chinese people living in Czech is
increasing. We can see an increase of Chinese living in Czech and that proves a raising interest of this group (Figure 2). It has been proven that Chinese investors are more interested in regions with already existing Chinese population (Szunomár, Völgyi, & Matura, 2014). If Czech creates suitable environment for Chinese population, it can ensure profit in the future, further promotion of educational and cultural exchange is desirable, in my opinion.
11 The information about visa was not specified by the source, thus, we do not know which type of visa it was. Based on other collected information, I assume that Hebnar et al. (2016) talks about under 90 days’ visa.
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Figure 2: Chinese people in the Czech Republic
Source: Created by the author using data from Český Statistický Úřad 2015
Greater economic cooperation between countries causes economic
globalization, one of the major aspects of economic globalization is foreign direct investment FDI (Borensztein, Gregoriob & Leec, 1998). FDI is an important factor for economy growth. FDI brings new technologies to the host country, but it also encourages research and development (R&D) of new technologies that are used by multinational corporations (MNCs) in the host country; the limit to MNCs to bring and develop those technologies that allow producing goods with lower costs is a human capital of the host country (Elkins, Guzman, & Simons, 2006). In Czech-China case, Czech-China’s FDI have increased during past decade. In 2005 Czech Premier Jiří Paroubek met with his Chinese counterpart and signed 14 bilateral agreements
“cooperation agreements in culture, forestry, tourism, food processing and mutual protection of investments.” (Jing, 2005). The meeting between two premiers was also significant because also China-EU relations were discussed and Czech-China
cooperation was adjusted to follow China-European Union comprehensive strategic
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total Chinese with residence
or visa over 90 days 3430 3587 4165 4986 5211 5359 5478 5586 5607 5508 5587 Residence permit for over 12
months including Permanent residents
2474 3324 3695 4476 4731 5171 5285 5350 5406 5383 5495
Visa for over 90 days 952 256 462 502 472 181 185 229 194 120 79 0
Chinese people in the Czech Republic
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partnership. Czech-China cooperation, as we nowadays know it, started in 1993 and since then was supported by CzechInvest. CzechInvest is an investment and business development agency of the Czech Ministry of Industry and Trade that aims to attract FDI (CzechInvest, 2016). China Global Investment Tracker shows that China’s investment counting $100 million is invested into the energy sector in Czech (American Enterprise Institute, 2005-2016).
3.2. IMPORT AND EXPORT BETWEEN CZECH AND CHINA
Since the year 2000 value of imported goods from China to Czech (Figure 2) has been slowly increasing until 2005, when after joining the EU Czech experienced the big increase in China’s import. In 2009 there was a significant decrease in the import. In 2009 Europe experienced debt crisis, it the same year Czech Koruna became much weaker – normally 1 EUR equals 25,8 Czech Koruna (CZK), but in February 2009 1 EUR was worth 29,7 CZK (Lopatka, 2009).
Looking at the situation of the economic cooperation between Czech and China, as it as been said previously, it is more and more positive as years go by.
Czech Economic Newspaper says that by 2015 Czech import to China has raised by 19%, which counts for 27,7 billion CZK, (ČTK, 2015). Czech Deputy Minister of Industry believes this achievement will make China see Czech as a country that shows interest in further cooperation, the Deputy Minister also says that Czech companies succeeding in China are mostly Czech traditional industrial firms, such as firms focusing on a car industry (ČTK, 2015). Despite this improvement, there is still a lot to improve, the Czech Republic still cannot compare with Western European countries and their export to China.
Graph Import to Czech from China is a good evidence of the importance of examination Czech-China relations after 2004. Since Czech joined the EU, we can see a big increase in China’s import to Czech, which was definitely positive for the Czech Republic. While seeing this connection of Czech and EU as an improvement of the Czech economy, I would like to demonstrate another element of this joint on this very graph (Figure 3). As mentioned before, there was a decline in value of China’s
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import to Czech in 2009, which was undoubtedly influenced by EU’s debt crisis, which occurred at the same time. Those two examples show us that Czech-China trade is currently dependent on the economic situation of the EU, or we can say situation within Europe. Since 2010 Europe started implementing various
mechanisms to improve this situation, we can see an increase of China’s import value to Czech during same years. After 2011 another decline occurred (Figure 3), it was stabilized by 2012−2013, since 2013 there have been less steep (compared to previous instances of import’s increase from Figure 3), but stable increase.
Figure 3: Import to Czech from China
Source: Created by the author using data from Český Statistický Úřad 2016
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