Why the ‘Honeymoon is Over’ Between Prague and China

Czech President Milos Zeman’s decision to skip  China’s summit with European leaders in April shows the “honeymoon is over” between Prague and Beijing, analysts say, as it tries to shake up the relationship to push for more investment.

And China could face similar trouble with other nations looking for more at this year’s “17+1” summit with Central and Eastern European nations in Beijing.

Top leaders usually attend the gathering, but Zeman on Sunday said he would not be going, and that China had not “done what it promised” by failing to invest more in his country. He would instead send Deputy Prime Minister Jan Hamacek, which he said was “adequate to the level of cooperation”.

At last year’s summit in Croatia, Prague was represented by Prime Minister Andrej Babis, who was diplomatically on par with the Chinese representative, Premier Li Keqiang. But it is China’s turn this year, and President Xi Jinping will be the host – meaning heads of state are expected to attend. The 17+1 grouping was launched by Beijing in 2012.

Zeman was a strong advocate for deepening economic ties with China and investments were on the rise, for a time. But Zeman and other Czech leaders have increasingly questioned the nature of the relationship, especially as the economic benefits have dwindled.

Relations with China grew after Zeman, who is in his second term as president, took office in 2013. The peak came in 2016 when Xi visited the country and promised more Chinese investment. That year, Zeman said he hoped his country would be an “unsinkable aircraft carrier” for Chinese investment in Europe.

But since then, the investments have faltered, not just in the Czech Republic, but across Central and Eastern Europe, and Zeman has changed his tone. In April, he called the lack of investment in his nation a “stain on the Czech-China relationship”, in an interview with Chinese state broadcaster CCTV.

“I suppose he feels that promises made to him personally were not fulfilled since he has had personal contact with Xi Jinping on a number of occasions … he surely feels that his commitment to China has not been reciprocated,” said Jeremy Garlick, assistant professor of international relations at the University of Economics, Prague.

Zeman has visited China five times and was the only EU leader to attend a Chinese military parade in 2015 to mark the 70th anniversary of the end of World War II.

Rhodium Group has tracked Chinese foreign direct investment data in Europe since 2000. Its data shows that while total Chinese investment in the Czech Republic had grown to about €1 billion (US$1.1 billion) by 2018, growth has been slow, while neighbouring countries like Italy and Germany had some 15 to 20 times more investment in their economies.

“I see the current sharp downturn of Czech-China relations being related to very high and unrealistic expectations which existed perhaps on both sides, driven to a large extent by the ignorance of each other,” said Richard Turcsanyi, director of the Central European Institute of Asian Studies at Palacky University

“Due to the impressive economic growth of China and also its international economic expansion, many expected that China could quickly become a significant economic actor in the Czech Republic,” he said.