Beijing, CEFC, and the Czech Republic

As trade tensions escalate between China and the U.S., Beijing is increasingly looking to Europe for trade deals, and is currently investing nine times there what it invests in the U.S. Yet in response, some European countries, notably the four biggest economies of France, Germany, Italy, and the United Kingdom, are beginning to implement tighter rules limiting foreign investment and takeovers. In some Central and Eastern European countries, however, there has been less resistance to Chinese investment and influence but public concern over official relations with China is growing. At The New York Times, David Barboza, Marc Santora, and Alexandra Stevenson look at the growing influence of China in Europe by examining the relationship between China Energy company, its disgraced former head Ye Jianming, and Czech President Milos Zeman:

In just two years Mr. Ye’s company, CEFC China Energy, had spent more than $1 billion on deals in the . He hired former Czech officials, including a onetime defense minister. Mr. Ye was even named a special economic adviser to Mr. Zeman.

Mr. Zeman, in turn, became a big backer of Beijing, tamping down domestic opposition to Chinese influence and taking up Chinese causes. He publicly supported China’s claims over Taiwan, the democratic island that Beijing claims as its territory. When Mr. Xi visited, police tried to keep protesters out of sight; some later accused the police of using violence to suppress them. The family of a prominent Holocaust survivor said Mr. Zeman withdrew a proposed medal for the man after his nephew met with the Dalai Lama, an exiled spiritual leader whom China considers a rebel.

For China, the Czech courtship was an unqualified victory: It had won a sure friend in Europe, an American military ally and a country once seen as a bulwark for liberal democracy in a strategically important region. As Mr. Zeman declared, the Czech Republic hoped to become “an unsinkable aircraft carrier of Chinese investment expansion” in Europe.

Then, Mr. Ye was detained in China this year, exposing the Czech Republic to the perils of this new relationship and forcing the president to defend his quick embrace of the Chinese deal maker. While the reason for Mr. Ye’s detention was never made public, critics of the Czech president saw Mr. Ye’s disappearance as proof that the country shouldn’t have tied its future and its fortune to the Chinese. [Source]

In an earlier post for CDT, Project Sinopsis’ Martin Hála also provided background on the relationship between CEFC and Zeman, and on growing concerns in the Czech Republic over China’s rising influence over the politics of the country.

China’s growing influence over Europe has also been examined in CDT interviews with Hála and his colleague Anna Zádrapová, and with MERICS researchers Kristin Shi-Kupfer and Mareike Ohlberg (See Part 1 and Part 2).

Read more about CEFC’s role in alleged corruption at the U.N. via a report from Project Sinopsis by Jichang Lulu.