Central Europe split over risks and rewards of Chinese influence

Although some countries in central Europe throw open their economies to Chinese investment, others are raising red flags over potential security threats posed by closer ties to an increasingly assertive Beijing.

Both approaches have been seen in the Czech Republic, where president Milos Zeman has lobbied for stronger political and business links to China, even as the intelligence services have issued warnings and the mayor of Prague has clashed with officials in Beijing and Shanghai.

It has now been revealed that Beijing warned last month that Czech firms operating in China would suffer if Jaroslav Kubera, then speaker of the Czech senate, went ahead with plans to visit Taiwan, which China claims as its own. Mr Kubera died of a heart attack before his intended trip to the self-ruled island.

“Czech companies whose representatives visit Taiwan with chairman Kubera will not be welcome in China or with the Chinese people,” Reuters quoted the Chinese embassy in Prague saying in a letter to Mr Zeman’s office.

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"Czech companies who have economic interests in China will have to pay for the visit to Taiwan by Chairman Kubera," the embassy added, noting the importance of the Chinese market to Czech firms including carmaker Skoda, lender Home Credit Group and piano maker Klaviry Petrof.

A spokesperson for the foreign ministry in Beijing did not comment on the letter but said: “China resolutely opposes a country that has established diplomatic relations with China having official exchanges with Taiwan authorities in any form.”

Cutting ties

Shanghai cut official ties with Prague in January after it signed a "sister city" agreement with Taiwan's capital, Taipei, and last year Beijing scrapped a partnership deal with the Czech capital when its mayor Zdenek Hrib showed strong public support for Taiwan and Tibet.

Beijing also scolded Estonia and Lithuania this month after their security services included warnings about China in their annual reports, reflecting concerns held by the US and many other Nato members over how China could use its rapidly growing presence in global transport and cyber infrastructure.

“The potential use of China’s foreign investment for political purposes and the possible development of technological dependency are increasingly threats to Estonia’s security,” Tallinn’s foreign intelligence service warned.

For the Chinese Communist Party, the report added, “decision-makers in other countries are only useful pawns to help implement [the party’s] strategies ... The underlying goal is to impose its own world view and standards, building a Beijing-led international environment that appeals to China.”

Lithuania’s state security service said in its national threat assessment that “through technological development and economic leverage, China increases its geopolitical influence and creates preconditions for vulnerability of the states involved in its economic projects.”

‘Cold war mindset’

Beijing’s embassy in Tallinn said the Estonian report was “characterised by ignorance, prejudice as well as the cold war mindset” and used “stories out of nothing, distorted facts or malicious attacks” to portray China as a threat.

Chinese diplomats in Vilnius used similar language in expressing “strong dissatisfaction with and resolute opposition to” Lithuania’s security assessment.

Beijing enjoys easier relations elsewhere in the region, and is pressing ahead with plans to acquire large assets such as ports and build major infrastructure including roads, railways and power stations. At the same time Huawei is eager to roll out Chinese 5G technology that some states fear and others welcome.

Despite US warnings that it may limit security co-operation with countries that use Huawei systems, Hungary says it has no concerns about the company and would welcome its involvement in the country's 5G network.

China is also upgrading the rail line between Hungary and Serbia, where Huawei surveillance cameras with facial recognition technology are being installed in Belgrade, and Chinese police have conducted exercises and joint patrols with their Serbian counterparts.