Czech-Chinese “Friendship” Extends to Social Credit

Czech-Chinese “Friendship” Extends to Social Credit
The following post has been reposted from Project Sinopsis, with permission:

Bilateral dialogue with the PRC at both ends: Czech-Chinese “friendship” extends to social credit

A secretive meeting between Czech and Chinese officials illustrates the links between the CCP’s Soviet-inspired system of “friendship” associations and the Czech business and political élite. A topic of the talks: “building the social credit system.”

According to a news item published on 10 June on the website of the International Cooperation Center (国际合作中心) of the National Development and Reform Commission (NDRC, 国家发展和改革委员会), a Chinese delegation visited the Czech Republic in late June. Talks with Vladimír Bärtl, Deputy Minister of Industry and Trade focused on “the digital economy, financial services and the construction of the social credit system.” A customary reference to “deepening pragmatic cooperation” may be translated from Chinese diplomatese as “cooperation free from any consideration of one’s own values, endorsing the Chinese model.” Both sides expressed their satisfaction with the work of the “Chinese-Czech Centre for Belt and Road Cooperation” (“一带一路”中捷合作中心), where the meeting took place. The news item specifically mentions the presence of the PRC ambassador in Prague, as well as that of Jaroslav Tvrdík, in his capacity as “chair of the Czech-Chinese Friendship Association.”

The ministry’s “Chinese-Czech Centre” and the Friendship Association

The Chinese-Czech Centre at the Ministry of Industry and Trade was established in 2017 as an organ coordinating bilateral cooperation under China’s “New Silk Road” project. According to the ministry’s website, on the Chinese side the organ falls under the NDRC, while

as no institution with an analogous remit exists on the Czech side […], the Czech side authorised the Mixed Czech-China Cooperation Chamber to run the Centre’s daily operations in cooperation with the Embassy of the Czech Republic in the PRC, and the CzechTrade and CzechInvest agencies.

Through this curious arrangement, the Czech end of the bilateral cooperation was basically handed over to a private entity, and a very peculiar one, too.

The existence of the Centre was not disclosed at the time of its establishment. It only became publicly known after a Sinopsis piece led to media coverage.

The Czech-Chinese Chamber, whose Czech name translates as “Mixed Czech-Chinese Chamber for Mutual Cooperation” (Smišená česko-čínská komora vzájemné spolupráce), is known as “Czech-Chinese Association for Friendly Cooperation” (捷中友好合作协会) in Chinese, often shortened in media reports to “Czech-Chinese Friendship Association” (捷中友好协会).

Such naming suggests an organization similar to the worldwide network of “friendship associations” led by the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC, 中国人民对外友好协会). This system is analogous to the friendship associations (общества дружбы) with the Soviet Union, only more extensively developed. PRC friendship associations are one of the pillars of the global influence apparatus that employs United Front (统一战线) tactics to systematically advance the Party-state’s interests abroad, invoking appealing vocabulary on “peace,” “friendship,” “cooperation,” and “cultural exchange.” Tvrdík’s association is indeed linked to this system: it has long cooperated with the CPAFFC, whose officials Tvrdík was meeting as early as 2013. The CPAFFC is also in charge of sister-city relationships. The politicized character the PRC gives to these relationships has been made abundantly clear in the case of Prague, where the Party-state reacted furiously to the city government’s decision to remove a “One-China” clause from its sister-city agreement with Beijing.

In the case of Tvrdík’s friendship association, its attempt to present itself to Czech audiences as a standard “chamber of commerce” is made more ironic by the fact that it personally overlapped with CEFC Europe, the Prague-based offshoot of a Chinese firm of dubious repute once led by President Zeman’s now disappeared “advisor” Ye Jianming (叶简明). Jaroslav Tvrdík himself sat in the management of CEFC Europe when it was active in the Czech Republic and subsequently overtly entered the service of the Chinese state when the subsidiary was taken over by the state-owned CITIC, together with all of CEFC’s assets and liabilities. It is not only an obvious conflict of interest to coordinate “bilateral cooperation” on the Czech side through an entity that works for the Chinese state; it is also demeaning for the Czech Republic, as a sovereign subject in international relations.

From Home Credit to social credit

The story of Czech-China collaboration managed by actors working for the Chinese state has yet another dimension, as the article we refer to also reveals. The Chinese official delegation is further reported to have met with representatives of the PPF financial group, whose subsidiary Home Credit is referred to as Jiexin (捷信) in Chinese. Together they “conducted in-depth examination of pragmatic and effective ways of Czech-Chinese collaboration in finances, credit information, smart cities and digital economy” (深入探讨了中捷在金融合作、信用信息、智慧城市、数字经济等领域务实合作的有效模式与路径).

PPF is a private international company of Czech origin founded in the chaotic beginnings of the Czechoslovak economic transformation in 1991. It has operated in China since at least 2007 and today its subsidiary Home Credit is one of the biggest foreign providers of consumer credit in the country. Home Credit’s first breakthrough into the Chinese market came in 2010, when it secured a pilot licence for the city of Tianjin. During a state visit in 2014, Czech President Zeman made a point of expressing his thanks for help with securing this and a subsequent national license for Home Credit to then Tianjin Party secretary Sun Chunlan (孙春兰). Sun went on to become head of the CCP Central United Front Work Department in 2014 and vice premier in 2018. She did not forget her old Czech friends: she visited Prague in 2018 for the opening of the capital’s first Confucius Institute.

By their own account, PPF has become a strong force behind the turn in Czech foreign policy towards the PRC that also featured President Zeman’s overt support for CEFC’s activities in the country. Tianjin politics has continued to play a prominent role in interactions with the Czech élite; in a recent example, the Tianjin Party secretary visited Prague less than a month ago for high-level activities that Czech officials had not disclosed until covered by Sinopsis and local media TV Seznam.

As the report indirectly proves, Chinese expansion under the Belt and Road initiative with the help of United Front organizations involves also collaboration with influential private companies with access to high-ranking politicians in foreign countries. A brief look at the Mixed Chamber website reveals that side by side with Jaroslav Tvrdík, there is also Lumír Meloun, who is otherwise in charge of Home Credit’s operations in China. At least another member of the board of the Mixed Chamber Board, Tomáš Kočka, is also a senior Home Credit executive.

Social credit and “information sharing”

Apart from the underlying systemic conflict of interest in the Czech-China relations, an alarming aspect of this particular visit is the mention in the report of further cooperation aimed at “building an information-sharing mechanism and creating a new platform for cooperation between companies and regions.”

As is well known, the Chinese Party-state jealously guards information, even that which would be publicly available in an open society. At the same time, it collects information in ways that go against our personal data protection norms and processes it in arbitrary ways. Under the “New Era” declared by Xi Jinping, China is implementing an assertive foreign policy and its treatment of information is also a means to obtain political influence. China’s industrial espionage is also notorious.

Information sharing from the Czech Republic to the PRC is thus an exceptionally sensitive matter involving national security. If talks on such a matter take place at all, they should include the security services, rather than the chair of the “friendship association,” employed by a Chinese state agency, and at the same time apparently serving the interests of a private company that uses its contacts with politicians to do big business in China.

The Chinese delegation included, besides NDRC officials, representatives of the National Public Credit Information Center (国家公共信用信息中心), and discussion comprised an exchange of views on “building a social credit system.” The PRC’s social credit system is known as a tool aiding state surveillance on citizens to a potentially dystopian extent. Given the stress on the protection of personal data at the European level, it is hard to understand how social credit could become the topic of talks between Czech and Chinese officials in a context other than expressing worries about its human rights implications.

As has become customary for Czech-Chinese contacts under “strategic cooperation,” Czech sources were silent on the visit. The first official reaction had to wait until media enquiries prompted by Sinopsis’ disclosure of the meetings: the ministry denied it had discussed social credit, thus contradicting the official Chinese account of the visit.

A version of this article, by Olga Lomová, appeared in Czech in Deník Referendum on 22 July.

To read more about social credit in China, see CDT’s coverage; a Wired article, “How the West Got China’s Social Credit System Wrong;” and a Little Red Podcast episode, “Cashing in on Social Credit.”


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