China’s Involvement in the Czech Republic

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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).