A perfect storm brewing in Prague: President Xi in the land of Havel

Czech President Zeman’s “restart” of Czecho-Chinese relations is unleashing a political storm that threatens the very fundamentals of the post–1989 democratic order.

Photo: Thieryy Ehrmann

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It might have been proof that there really is Chinese soft power – a much discussed topic among China scholars as of late. 1 President Xi Jinping’s visit to Prague on Easter Monday was meant to be a pinnacle moment in a rather spectacular process of Czecho-Chinese rapprochement over the last three years. From the land of Havel supporting “lost causes” like freedom for Tibet or human rights in China, the Czech Republic has graduated, in the words of President Zeman, to China’s “safe haven” in Europe and the West. 2

Soft power with a big stick

In the end, it didn’t quite work out that way, at least not on a PR front. The Chinese embassy in Prague organized welcoming crowds of their own citizens, and both the Chinese visitor and his Czech host overplayed their hand, and made a mockery of this new “heart-felt friendship”. Keenly aware that their newfound harmony is not widely shared by the Czech populace, both sides went too far in ensuring that potential trouble-makers were kept safely out of sight.

The city, already ridiculously decorated with Soviet-style welcoming pomp several days before the visit, 3 became outright grotesque when much of Central Prague was cordoned off in what amounted to the largest-scale police operation since 1989. 4

The police seemed to have received peculiar orders: they ignored the excesses of the Chinese “welcome party,” 5 instead only restraining Czech protesters. 6 Simply sporting a Tibetan or Taiwanese flag became an invitation for police harassment and detention. 7 At the same time, organized Chinese “well-wishers” were caught on camera assaulting Czech protesters, with the police looking on – and in some cases arresting the Czechs. Zeman’s spokesperson added insult to injury tweeting that a Czech “mob” was attacking the Chinese. 8

The show of force didn’t go down well with locals, especially those old enough to remember the indignities of the Soviet occupation before ’89. This heavy-handed exercise of “soft-power” eventually provoked a nascent public debate on the wisdom of the whole “restart” (using Zeman’s word) in Czecho-Chinese relations. The alleged abuse of police power during the visit is still being debated in Czech Parliament, where the topic was immediately politicized along the divide between the governing coalition (supported by the Communists) and the opposition. 9 Given the partisan arithmetic in parliament, the debate predictably went nowhere. Rather provocatively, the police commander responsible for the controversial operation was even marked for a promotion. 10

Diplomatic storm

In retrospect, Zeman’s “restart” over the last three years is just the latest acceleration in a halting process initiated a decade ago during the short-lived tenure of Prime Minister Paroubek. Paroubek visited Beijing shortly after assuming power in 2005 and announced the coming of a “diplomatic storm”. 11 The storm never materialized because Paroubek didn’t survive the 2006 elections. However the idea lived on in certain portions of the Czech Social Democratic Party (ČSSD), nurtured by Paroubek’s former Secretary Jan Birke and later by the manager of his failed election campaign and a one-time defense minister, Jaroslav Tvrdík, plus a few other ČSSD cadres, mostly pre–89 Communist Party members. 12

At the other end of the political spectrum, the rapprochement was driven by financial corporations that emerged from the chaotic “Czech way of privatization” in the early 90s, foremost among them the First Privatization Fund, or PPF, owned by one of the richest Czech businessmen, Petr Kellner. 13 These financial corporations, though often officially domiciled in western European capitals, are more adept in the ways of the post-communist East, given their own trajectories: in particular, they thrive in the muddy waters of highly regulated sectors in transitional countries, with very thin lines between business and politics. Almost by default, these corporations’ first business destinations were Russia and the post-Soviet space; however after suffering losses in sanctions-hit Russia in the aftermath of the Ukrainian crisis, 14 these corporations have been fatally drawn to China as a politically and regulatory similar, but still (at that time) economically booming business environment. 15

The mole’s come-back

At some point around 2011, these political and business interests coalesced with a spark that reignited the dormant “diplomatic storm”. After a series of failures on other projects, Tvrdík, Paroubek’s one-time ally, quickly metamorphosed 16 into a specialist on China relations and became PPF’s chief lobbyist in China, supported financially by the corporation’s wealth, and politically by his ČSSD connections. Despite his lacking language proficiency in both Chinese and English, he embarked on a heroic mission to engage Chinese leadership in what eventually became known as Zeman’s “restart”.

At first, he seemed to be largely ignored, although the Chinese must have found it interesting to be approached by a former defense minister from a NATO member country. Out of apparent desperation, he tried his hand at cultural diplomacy, and organized the somewhat bizarre return of a much-loved (in China as in the Czech Republic) cartoon character, the Little Mole (Krtek), 17 to Chinese TV. 18 At a colorful Little Mole come-back party in Beijing in July 2012, a motley crowd of Czech politicians rejoiced with Chinese school children, but few Chinese officials appeared.

Tvrdík’s luck finally turned with another storm, this time political, that hit the Czech Republic in 2012 – 2013. In the first direct presidential elections, the populist candidate Miloš Zeman ended up on top. Shortly afterwards he took advantage of a political crisis, and named his own government while disregarding parliament, explaining that constitutional conventions “are for idiots.” 19 Zeman’s personal government was eventually replaced with an elected one, but by that time, the damage had been done – the constitutional rules were impaired and power politics triumphant. The “restart,” among other things, was in full swing, and the newly-elected government had been reduced to playing second fiddle.

CEFC comes to town

In light of these events, Beijing finally awoke to the fact that Tvrdík could do more than revive cartoon characters. They realized that with his excellent connections to the new power brokers in Prague, he might just be able to open up broad new horizons for his Chinese friends. 20

Tvrdík’s friends materialized – or rather corporatized in a Chinese company, CEFC China Energy (or Hua Xin in Chinese). 21 This is a company of some renown, in some quarters, 22 receiving a mention in the US-based think-tank, Project 2049’s 23 report on China’s political warfare, 24 as a possible “platform” for Chinese military intelligence. This assessment is seconded by the prolific researcher Andrew Chubbs’ investigative articles on his blog, 25 southseaconversations, which also runs several pieces on the mysteries surrounding CEFC’s “chairman” Ye Jianming. 26

In September 2015 (several months after the fact), it was revealed that the very same Mr. Ye had been Czech President Zeman’s “special advisor” since April. 27 That curious appointment was followed by a series of personnel shuffles between CEFC and the Czech Government; CEFC representatives now serve as advisors and confidants to three top Czech politicians, including the president, the PM and the home minister. In return, the newly created Czech CEFC headquarters is staffed with former high officials from the government and the presidential office. 28 CEFC appears to be literally fusing with the Czech state. 29

The highly unusual involvement of a foreign company, private or not, in the highest institutions of the Czech state perhaps explains why the Czech police behaved the way they did during Xi’s visit. It might also explain why the Czech authorities seem to ignore the inherent security risk suggested by reports of CEFC’s possible connection to Chinese military intelligence. 30

Despite frequent warnings in the Czech media, and in the characteristically cryptic language of the redacted annual public reports of the Czech counter-intelligence agency, BIS, 31 the relevant authorities chose not to heed them, or even explain why they did not consider the alleged connection a threat. A recent parliamentary interpellation 32 posed directly to the PM, only produced a general, evasive response. 33 The control mechanisms against suspected foreign infiltration appear to be failing. In this context, the presence of CEFC advisors in the highest constitutional offices might even suggest a full state capture. 34

“Investment” storm

CEFC infusion into the Czech state was accompanied by what was dubbed an “investment” storm; in reality though, it was more like a shopping spree. 35 The Chinese “energy” company bagged a football club, a media conglomerate, some prime real estate, plus a large chunk in one of the post-privatization financial corporations, J&T. 36 All in all, so far these acquisitions amount to less than half a percent of the total FDI in the Czech Republic, 37 far below major investors like the US or Germany, or even Taiwan. There were no new production facilities or jobs created, and all the money went to a small, tightly-knit group of politically connected entrepreneurs around Mr. Tvrdík. 38

In contrast to the somewhat underwhelming “investment storm,” political hype went into overdrive. Supported by statements from politicians around Mr. Zeman, some media hyped up the Chinese “billions”  39 that would save the Czech economy, allegedly in “shambles”. China is the land of endless opportunities, while the West is in irreversible decline. An easy choice for those not blinded by the “Havloid” human rights mongering. 40 (The Czech economy has, in fact, been performing relatively well over the last few years.)

The rhetoric became more intense and then outright political in the run-up to Mr. Xi’s visit: the whole Western model is failing; the EU is letting in – even inviting – hordes of Muslim cut-throats; and the US is guilty of all sins imaginable; our only hope is the East.

Just before the visit, Mr. Zeman, who has been steadily moving from populism to extremism, summed it up neatly in an interview with China Central TV: 41 the previous Czech governments were too “submissive” towards the EU and the US; only now is the country truly independent enough to nourish its friendship with China.

His foreign policy director later explained 42 that the liberation from the EU occurred when Zeman decided to brave the EU pressure and attend last year’s military parade in Beijing. Moved by his courage, his Chinese hosts rewarded him with Xi’s visit.

A perfect storm

Mr. Zeman won himself a new comrade. He doesn’t boast many friends in the democratic world and seems genuinely flattered by the attention he’s now getting from China. The same cannot be said of many of his fellow citizens, who have fought hard to join the Euro-Atlantic community, which they associate with shared values, security guarantees and prosperity.

Zeman and a few oligarchs have arbitrarily chosen to alter the Czech Republic’s post–89 orientation. The checks and balances are failing, and there are no institutions capable of resisting this unilateral move. The state appears captured and society deeply divided by unrelated and intentionally whipped-up issues, like migration.

In such an important foreign policy issue, where a long-term consensus with the opposition and civic society is needed, policy-making is hijacked by a narrow group of “political entrepreneurs” connected to a less than transparent foreign company. Rather than a diplomatic or investment storm, Zeman’s “restart” is unleashing a perfect political storm that threatens the very fundamentals of the post–89 democratic order.

Notes:

  1. James F. Paradise, “Soft Power on the Defensive: The Contradictions of Chinese Foreign Policy,” China Policy Institute Blog, March 23, 2016, accessed on April 29, 2016, http://bit.ly/20aoP9v.
  2. Guo Yan, “Czech Republic A Safe Haven for Chinese Investment: President,” Crienglish.com, March 27, 2016, accessed on April 29, 2016, http://bit.ly/1sBt9Vb.
  3. Hana Mazancová, “Prahu zaplavily čínské vlajky i billboardy. Lezeme jim do zadnice, zlobí se starosta Prahy 6” / “Prague has been flooded with Chinese flags and billboards. ‘We lick their boots,’ said the angry mayor of Prague 6,” Lidovky.cz, March 23, 2016, accessed on April 29, 2016, http://bit.ly/1Th6pFq.
  4. Sabina Slonková and Simona Holecová, “Dokument, kterým Krnáčová dovolila policii tři dny blokovat Prahu” / “The document Mrs. Krnáčová issued to permit the police to block Prague for three days,” Neovlivni.cz, March 30, 2016, accessed on April 29, 2016, http://bit.ly/1ZKuELg.
  5. Adéla Skoupá, Eliška Dokulilová and Čeští Číňané, “vítají svého prezidenta mávátky nebo vuvuzelami. Za odměnu dostanou od ambasády jídlo a malá trička” / “Czech Chinese welcome their president with ensigns or vuvuzelas. They have been rewarded with food and small T-shirts by the embassy,” Ihned.cz March, 28, 2016, accessed on April 29, 2016, http://bit.ly/25caFvD.
  6. Jan Charvát, “Odpůrci čínského prezidenta se snažili dostat na Hradčanské náměstí, policie je zastavila” / “The opponents of the Chinese president tried to get to Hradčany´s square, they were stopped by the police,” Český rozhlas March 29, 2016, accessed on April 29, 2016, http://bit.ly/27Du1sg.
  7. Pavel Fukar, “Staré metody se vracejí? Policisté zfackovali studenta kvůli Číňanům” / “Old methods are back? A student was slapped by policemen due to the Chinese,” Echo24.cz April 12, 2016, accessed on April 29, 2016, http://bit.ly/23A5K3r.
  8. Martin Zvěřina, “Fašizující lůza aneb Velká kulturní revoluce v režii hradního mluvčího” / “A fascist mob or Great Cultural revolution directed by the President´s spokesman,” Lidovky.cz March 28, 2016, accessed on April 29, 2016, http://bit.ly/1NA87j4.
  9. “Poslanci debatovali o policii při návštěvě čínského prezidenta bez výsledku” / “Members of Parliament debated in vain about police´s actions during the Chinese president´s visit,” ČTK – České noviny April 21, 2016, accessed on April 29, 2016, http://bit.ly/1YFgzht.
  10. Martin Fendrych, “Tuhý bude povýšen. Vláda podlézá Zemanovi. Kývá na buzeraci Čechů při čínské návštěvě” / “Mr. Tuhý will be promoted. The government is licking Zeman´s boots. It nods to bossing the Czechs during the visit of the Chinese,” Aktuálně.cz April 19, 2016, accessed on April 29, 2016, http://bit.ly/1rWmfcr.
  11. Martin Hála, “Paroubkova čínská kachna” / “Mr. Paroubek´s Chinese duck,” Ihned,cz, June 30, 2005, accessed on April 29, 2016, http://bit.ly/1sBtnvm.
  12. Jan Kubita, “Paroubek rozjíždí vlastní diplomacii. V Číně” / “Mr. Paroubek launches its own diplomacy. In China,” Hospodářské noviny August 31, 2007, accessed on April 29, 2016, http://bit.ly/1Trh4eW; for more on Jaroslav Tvrdík see: Olga Lomová, “Czech-Chinese honeymoon I: Will it bring economic advantage or end in security risk?” V4Revue, February 9, 2016, accessed on April 29, 2016, http://bit.ly/1RaRaGn.
  13. Pavel Šafr, “Českou republiku prodal Číně Petr Kellner” / “The Czech Republic was sold to the Chinese by Petr Kellner,” Svobodné forum March 3, 2016, accessed on April 29, 2016, http://bit.ly/1rWmrbD. For more general information on PPF and Petr Kellner see Petr Kellner, The World’s Billionaires: 2016 ranking, The Little Black Book of Billionaire Secrets, Forbes, accessed on May 19, 2016, http://onforb.es/1qwh6Xl; Robert Anderson, From mistrusted outsider to the financial elite, Financial Times, November 1, 2004, accessed on May 19, 2016, http://on.ft.com/1OBuEa7.
  14. “Krachující Rusko uvrhlo Kellnerův Home Credit do ztráty 2,44 miliardy” / “Busting Russia caused Kellner´s Home Credit a loss of 2,44 billions,” Idnes.cz August 28, 2015, accessed on April 29, 2016, http://bit.ly/1VaZVY2.
  15. Nikita Poljakov, “Pro Home Credit je Čína zlatý důl. Brzy překoná dosud největší ruský trh” / “For Home Credit, China is a golden mine. It will soon surpass the already biggest Russian market,” ihned.cz, December 15, 2015, accessed on April 29, 2016, http://bit.ly/1OP08id.
  16. Jiří Štický, “Tvrdík je zpět. Je na to Čína dost bohatá?” / “Mr. Tvrdík is back. Is China rich enough for it?” Idnes.cz September 9, 2015, accessed on April 29, 2016, http://bit.ly/1RaQmBn.
  17. “The Little Mole (in the Czech original called Krtek) is an animated character in a series of cartoons, created by Czech animator Zdeněk Miler in 1956. The cartoon won itself an enormous popularity in many Central European countries, as well as India, China, Kazakhstan, Russia, Iraq and Japan, due its distinct lack of dialogue.” accessed on April 29, 2016, http://bit.ly/1TJ3vn2.
  18. “Krteček se vrátil na obrazovky největší čínské televize CCTV” / “The Little Mole has come back on the screens of the biggest Chinese TV CCTV,” July 13, 2012, accessed on April 29, 2016, http://bit.ly/1rWmUuB.
  19. Lukáš Werner and Jan Wirnitzer, “Pojem ústavní zvyklosti je idiotský, řekl Zeman. Němcové nechal naději” / “The term ‘constitutional traditions’ is idiotic, said Zeman. He left Mrs. Němcová to hope,” Idnes.cz July 11, 2013, accessed on April 29, 2016, http://bit.ly/1TlSNDq.
  20. “TOP 10 zákulisních hráčů: kdo má v ČR vliv, Číslo 5” / “TOP 10 of backstage players: who is influential in the Czech Republic,” June 3, 2015, accessed on April 29, 2016, http://bit.ly/1FuboX8.
  21. About CEFC China: Corporate Profile, accessed on April 29, 2016, http://bit.ly/1NA8I4l.
  22. Olga Lomová, “Who is ‘Chairman Ye’ and what is the business of CEFC about?” V4Revue, February 10, 2016, accessed on April 29, 2016, http://bit.ly/1YFhEWC.
  23. Project 2049 Institute, “About Us,” http://bit.ly/1XC2jYA.
  24. Mark Stokes, Russell Hsiao, “The People’s Liberation Army General Political Department: Political Warfare with Chinese Characteristics,” Project 2049 Institute October 14, 2013, accessed on April 29, 2016, http://bit.ly/27DvAX5.
  25. Andrew Chubb, “China announces the US’s Spratly patrols to the masses,” Southseaconversations October 27, 2015, accessed on April 29, 2016, http://bit.ly/1YFi8fa.
  26. Andrew Chubb, “The enigma of CEFC’s Chairman Ye,” Southseaconversations June 7, 2013, accessed on April 29, 2016, http://bit.ly/1OBv2W9.
  27. “Čínská spojka u Zemana. Předseda představenstva CEFC mu dělá poradce” / “The Chinese messenger at Mr. Zeman. The CEFC´s Chairman of the Board is an advisor to him,” zpravy.E15.cz September 5, 2015, accessed on April 29, 2016, http://bit.ly/1WFaEv4.
  28. Martin Shabu, “Ostré drápky čínské pandy. V okolí Zemana a Sobotky jsou lidé s vazbou na Čínu” / “Sharp claws of the Chinese panda. There are people around Mr. Zeman and Sobotka, linked to China,” Lidovky.cz March 19, 2016, accessed on April 29, 2016, http://bit.ly/1YFi7bp.
  29. HN: Czech Presidential Office, Chinese CEFC personally merge, November 20, 2015, accessed on April 29, 2016, http://bit.ly/1W4eYUq.
  30. See Chubb, “China announces the US’s Spratly patrols to the masses.”; Chubb, “The enigma of CEFC’s Chairman Ye.”; Project 2049 Institute, “About Us.”
  31. Robert Břešťan, “BIS varuje před čínským vlivem. Číňané zatím ve velkém nakupují a radí na Hradě” / “Security Information Service warns about the Chinese influence. The Chinese make only big purchases for now and provide advice to President,” Hlidacipes.org September 7, 2015, accessed on April 29, 2016, http://bit.ly/1YFi6UE.
  32. Parliament of the Czech Republic, “Písemná interpelace D. Korteho na B. Sobotku ve věci působení China CEFC Huaxin Energy Company v ČR, Poslanecká sněmovna Parlamentu České republiky, Sněmovní tisk 778/0, část č. 1/3” / “Mr. Korte´s written interpellation to B. Sobotka concerning the CEFC China Huaxin Energy Company´s activities in the Czech Republic, Chamber of Deputies of the Parliament of the Czech Republic, Parliamentary print 778/0, part no. 1/3,” accessed on April 29, 2016, http://bit.ly/1Th7JIh.
  33. “Poslanci debatovali o působení čínské společnosti CEFC v Česku” / “The Members of Parliament discussed the acts of the Chinese corporation CEFC in Czechia,” České noviny April 21, 2016, accessed on April 29, 2016, http://bit.ly/20aslRj.
  34. State capture, accessed on April 29, 2016, http://bit.ly/1WFaSCd.
  35. Jason Hovet, “UPDATE 1-China’s CEFC adds to Czech buying spree with airline, brewery deals,” Reuters, September 5, 2015, accessed on May 17, 2016, http://reut.rs/1TpC2JZ.
  36. For more on the acquisitions see: Olga Lomová, “Czech-Chinese honeymoon I: Will it bring economic advantage or end in security risk?”, V4Revue, February 9, 2016, accessed on April 29, 2016, http://bit.ly/1RaRaGn.
  37. “Obří příliv? Čínské peníze netvoří v Česku ani půl procenta zahraničních investic” / “A massive inflow? Chinese money does constitute not even a half of one percent of the FDI,” Lidovky.cz March 29, 2016, accessed on April 29, 2016, http://bit.ly/1suOMWH.
  38. Jiří Hlavenka, “Slavné čínské investice nestojí ani za vlašák s rohlíkem” / “Famous Chinese investments are not worth a penny,” denikreferendum.cz March 30, 2016, accessed on April 29, 2016, http://bit.ly/1SvxHaL.
  39. Štěpán Kotrba, “Zemanův kanál a Hedvábná stezka” / “The Zeman´s channel and the Silk Road,” Názory arguments on ČR Plus April 6, 2016, accessed on April 29, 2016, http://bit.ly/1sBvzDp.
  40. The term, “Havloid” or “havloid” is a pejorative negative branding of Václav Havel´s adherents. Sometimes it is also used with another scornful reference to Havels´ adherents being “truthlovers,” which draws from Havel’s parole “Truth and love must prevail over lies and hatred.” Čeština 2.0 / Czech 2.0, accessed on May 17, 2016, http://bit.ly/1TJ4aFi; Milan Šmíd, “Havlismus a havloidi v českých médiích – díl 2 / Havlism and havloids in Czech media – N. 2,” Louč, December 19, 2014, accessed on May 17, 2016, http://bit.ly/1U1ot3d.
  41. Miloš Zeman: “There was very bad relationship between China and former government of the Czech Republic. Former government, I stress. Because this government has been very submissive as for the pressure from the United States and from the European Union. Now we are again independent country and we formulate our foreign policy which is based on our own interests. National interest. And we do not interfere the internal affairs of any other country. And this is my explanation of restart.” Interview with Czech President Milos Zeman on Sino-Czech ties, CCTV News, March 26, 2016, accessed on April 29, 2016, http://bit.ly/1U1oAvN.
  42. “Kmoníček: Státy EU nám chtěly zabránit získat čínské investice, Čína předefinovala slovo komunista” / “Mr. Kmoníček: The EU states wanted to prevent us from gaining the Chinese investments. China has redefined the term ‘communist,’” Aktuálně.tv April 1, 2016, accessed on April 29, 2016, http://bit.ly/1TlUeSD.
Martin Hála

Martin Hála

is a sinologist currently based in Prague. Educated in Prague, Shanghai, Berkley, and Harvard, he has taught at universities in Prague and Bratislava, and conducted research in China, Taiwan and the US. He has worked for several media-assistance organizations in Europe and Asia, and from 2013 to 2015, served as the Asia Pacific regional manager at the Open Society Foundations.