Commentary on Political Economy

Tuesday 20 August 2019

I LOVE PRAGUE (An Excellent Reason To Return This Winter.)

China is investing in Europe — but there are strings attached

People wave Chinese flags during Chinese President Xi Jinping’s visit to Prague in 2016. (Michal Cizek/AFP/Getty Images)
By Michael Birnbaum
August 19 at 6:00 AM
PRAGUE — The mayor of this capital city was shaking hands down a line of diplomats when the Chinese ambassador to the Czech Republic did something decidedly undiplomatic.

He strode to the front of the line, pushing past puzzled envoys holding champagne flutes, and demanded that a top Taiwanese diplomat be asked to leave the mayor’s reception — in deference to the one-China policy — or he would walk out himself.

“There is only one China. I am the ambassador,” Ambassador Zhang Jianmin later recounted to The Washington Post. “I tried to point out the mistake that he made, and I advised him to correct the mistake.”

But Mayor Zdenek Hrib knew what he was doing. He had worked at a teaching hospital in Taiwan while training to be a doctor and was well aware of China’s claim on the island. He refused to accommodate Zhang’s request. “I explained to him we don’t kick out guests that we’ve invited,” Hrib told The Post.

The Chinese ambassador left.

Months later, even as Beijing is embroiled in a trade war with the United States and facing protests in Hong Kong, Chinese officials and the Czech mayor are still sparring. The feud offers an especially raw example of how Beijing is trying to flex its muscles in Europe — with little tolerance for objections.

China has been investing in Europe in conjunction with its broadly defined Belt and Road Initiative. And it has focused special attention on Central European countries.

“They’re looking for a way to project their political influence,” said Czech Foreign Minister Tomas Petricek.

For many European Union decisions, each country has an equal vote, meaning China needs to win over only a few leaders to nudge E.U. policy in a favorable direction.

The Czech Republic previously held China at arm’s length. The late president Vaclav Havel, a hero for leading Czechoslovakia out of communism, was deeply cautious about Beijing when he was in office, said Pavel Fischer, a member of the Czech Senate and a former Havel adviser.

As Havel sometimes said about China, “Even an elephant will recognize the courage of a small bird and change his posture,” Fischer recalled.

But China has been able to make inroads since Havel’s death in 2011.

Chinese President Xi Jinping and Czech President Milos Zeman review an honor guard at Prague Castle in March 2016. (Michal Cizek/AFP/Getty Images)
Czech President Milos Zeman has met with Chinese President Xi Jinping eight times — an unusual amount of face time for the leader of 10 million people.

Zeman has welcomed Chinese investment and tried to position his country as China’s portal to Europe. He even appointed a Chinese business tycoon, Ye Jianming, as an economic adviser. Ye, the chairman of energy company CEFC China, proceeded to buy stakes in a Prague soccer team, a brewery, an airline, a media company and an investment bank.

Meanwhile, China hired former Czech ministers and other retired politicians to press its case in Prague.

“They’re trying to rearrange the political arrangements to be more conducive to Chinese interests,” said Martin Hala, director of Sinopsis, a group that studies Chinese influence in Central Europe. “Some systems are more resilient than others.”

The relationship has hit some serious bumps.

Ye, the adviser to the Czech president, has not been seen since March 2018, when he was arrested in China for unclear reasons. A top executive at Ye’s nongovernmental organization, the China Energy Fund Committee, has been convicted in a New York court for bribing officials in Chad and Uganda. And Ye’s energy company has been absorbed into a Chinese state-owned company.

With Ye gone, the Czech president has indicated some disappointment with Chinese promises that have failed to materialize.

“I consider the absence of large Chinese investors a stain for Czech-Chinese cooperation,” Zeman told China’s CCTV broadcaster this year.

Other Czech policymakers have taken a tougher approach toward Beijing. Ultimately, it is Prime Minister Andrej Babis, not Zeman, who is responsible for setting Czech foreign policy. And Babis leans more in the direction of President Trump than toward China.

An exhibition on the grounds of the Czech Senate commemorates the Tiananmen Square protests and massacre. (Michael Birnbaum/The Washington Post)
China’s Huawei and ZTE are being phased out from Czech government agencies and the country’s mobile networks after the Czech Republic’s cybersecurity agency issued a warning.

The risk from China is “unambiguous,” said Michal Thim, the senior China analyst at the Czech National Cyber and Information Security Agency. “Such an important system as the mobile network could be taken down in the most extreme threat.”

Zhang, the Chinese ambassador, appealed to Babis. The Chinese Embassy later posted on Facebook that Babis had promised to set things straight. The prime minister denied saying any such thing, and the breach of diplomatic etiquette infuriated the Czechs.

“There might have been some misunderstanding,” Zhang said. But the agency’s warning “ruins the atmosphere of cooperation,” he said.

And then there’s the Prague mayor, who has stood in opposition to Zeman’s Beijing overtures.

Hrib, 38, a member of the insurgent Pirate Party, said in an interview in Prague’s art nouveau city hall that he just wants to promote the best policies for his city. All the same, he has embraced his fight with Beijing.

In March, he reinstituted the practice of flying the Tibetan flag from city hall in honor of the 1959 uprising. He allowed an exhibition on city property commemorating the 1989 Tiananmen Square protests. He hosted the leader of Tibet’s exiled government and made an official visit to the Taiwanese capital, Taipei. And he has called for Prague to renegotiate its 2016 sister-city agreement with Beijing, removing the acknowledgment of the one-China principle, which states that China, Taiwan and Tibet are a single country that should be ruled from Beijing.

Hrib said it’s not a city’s place to recognize countries.

He acknowledged that he developed sympathy for Taiwan while studying and traveling there. He keeps a Taiwanese tea set on his desk, underneath a gigantic map of Prague.

Prague Mayor Zdenek Hrib keeps a Taiwanese tea set on the desk in his office. (Michael Birnbaum/The Washington Post)
The Prague-Beijing fight has had collateral damage.

China canceled a 14-concert tour by the Prague Philharmonic that had been scheduled for the fall. Orchestra leaders say Chinese officials asked them to issue a statement condemning the mayor and embracing the one-China policy. When they refused, the tour was called off, leaving a 10 percent hole into the orchestra’s budget.

“It’s because we have ‘Prague’ in our name,” said Iva Nevoralova, an orchestra spokeswoman. “We really don’t want to have anything to do with politics.”

Petricek, the Czech foreign minister, said that the fight “certainly does raise some questions about the prospect of further Czech-Chinese relations, where our cooperation goes.”

Beijing has issued its own warning.

“What they did has severely hurt the sentiments of the Chinese people and undermined the good atmosphere for bilateral relations,” Foreign Ministry spokesman Geng Shuang said last month. He demanded that they “correct their wrongdoing as soon as possible and not recklessly damage overall China-Czech relations. Otherwise, their own interests will be harmed at the end of the day.”

Hrib offered no apology.

The “one-China policy does not mean that you will do exactly everything that China says,” he said.

He noted that when Prague city leaders originally signed the sister-city agreement with Beijing, it was with the hope that the Prague Zoo would get a panda.

There’s still no panda.

But he said Taipei has offered pangolins.

Ladka Mortkowitz Bauerova contributed to this report.

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