Czechs roll out red carpet for first visit by Chinese President Xi Jinping

A Czech National flag hanging next to a Chinese National flag splattered with a black substance in Prague on March 26, 2016.
A Czech National flag hanging next to a Chinese National flag splattered with a black substance in Prague on March 26, 2016.PHOTO: AFP

PRAGUE (REUTERS) - Chinese President Xi Jinping begins a two-day state visit to Prague on Monday (March 28) to promote business ties, crowning efforts by Czech President Milos Zeman to build a strategic relationship with Beijing.

Mr Zeman has been keen to build stronger ties with China and Russia since his election in 2013, rather than with Prague's partners in Nato and the European Union, though the government, not the president, bears the main responsibility for Czech foreign policy.

Mr Xi's visit, the first by a Chinese president, will include a business forum and the signing of Chinese investments in the nation of 10.6 million people. China is Prague's third-biggest trade partner, with bilateral trade worth some US$21 billion (S$28.84 billion).

"The Chinese and Czech sides should without delay raise the position of mutual relations, see them from a strategic viewpoint and long-term perspective," Mr Xi said in an article published in the Czech daily Pravo on Saturday.

China was deeply appreciative that Mr Zeman was the only Western leader to attend a massive military parade in Beijing last September marking the end of World War II.

On a previous 2014 trip, Mr Zeman said he had come to China to "learn how to increase economic growth and how to stabilise society" rather than "teach market economy or human rights".

That marks a sharp contrast with the Czech Republic's first post-communist president, Mr Vaclav Havel, a Soviet-era dissident and personal friend of Tibet's exiled spiritual leader, the Dalai Lama.

On Monday, Mr Zeman will invite Mr Xi to a presidential residence outside Prague, the first foreign dignitary to be hosted there.

The special treatment Mr Xi will receive has prompted protests from the Czech opposition, who have compared it to the warm welcome extended to Soviet leaders during the Cold War.

An unknown suspect defaced dozens of Chinese flags on a main airport road with black paint on Saturday and human rights activists plan demonstrations.

China's state-run Global Times, in a Monday editorial, said the flag incident showed "major lapses from the Prague police and the hidden hostility in Czech society".

Attempts by Chinese intelligence to build influence in Czech political circles have raised eyebrows in the Czech counter-intelligence service. In its 2014 annual report it said unnamed Czech civil servants and politicians were aiding these efforts.

CEFC BUYING

Chinese investments so far have mostly consisted of acquisitions by CEFC China Energy, a firm with unknown owners which says it is the sixth biggest private enterprise in China.

Last year CEFC took a 9.9 per cent stake in the Czech J&T Finance Group, which owns banks in the Czech Republic and Slovakia, stakes in airline Travel Service, in the Lobkowicz breweries, a media house and football club Slavia Praha.

CEFC is completing investments worth 18 billion crowns (S$1.02 billion) to add to 20 billion crowns spent already, executive vice-president Marcela Hrda told Reuters. They include finance, energy, healthcare, industry, tourism and e-commerce.

A Czech source said CEFC was also interested in the Czech GE Money Bank, which has been put up for sale.

The CEFC parent holding is chaired by Mr Ye Jianming, who was given the post of an adviser to Mr Zeman in a highly unusual move to promote relations. The company has a defence industry licence, which is unusual for a private enterprise in China.

The Czechs have so far lured more job-creating direct investment from Taiwan, such as computer maker Foxconn.