Xi begins first Czech visit

Ties to serve as model under Belt and Road cooperation

Chinese President Xi Jinping begins his three-day State visit to the Czech Republic on Monday, which is expected to be an opportunity to deepen Sino-European ties by strengthening links with the continent’s central and eastern parts.

China-Czech cooperation in areas such as manufacturing and technology will serve as a model for bilateral cooperation under China’s Belt and Road Initiative and offer China a chance to enter Western Europe in the future, analysts said.

Marking Xi’s first trip to a central and eastern European country (CEEC) as China’s head of state, the three-day visit is also the president’s first trip to Europe this year.

On Saturday, Xi published an article, “Time to Renew and Energize China-Czech Ties,” in Czech newspaper Pravo, calling on the two countries to “usher in a bright new era of China-CEEC cooperation and China-EU relations.”

Saying that it is “an opportune time” to develop China-Czech relations, Xi noted that development strategies should be better aligned and regional cooperation enhanced by “bringing into play the role of multilateral platforms” such as the “16+1” mechanism.

The “16+1” mechanism refers to the annual meeting between Chinese and Central and Eastern European leaders.

Xi wrote that “China hopes to cooperate with the Czech side to carry out industrial capacity cooperation in the manufacturing sector, and on that basis, expand practical cooperation in such areas as finance, telecommunications, smart industry, nano-technology and environmental protection.”

Gateway nation

With a GDP per capita of nearly $20,000, the Czech Republic can be a highlight of the “16+1” mechanism, especially after a new pragmatic administration took office in 2013, Zhao Junjie, a research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Sunday.

“The country has been recovering from the debt crisis since 2013, and now needs further investments to consolidate its economic development,” Cui Hongjian, director of the department of EU Studies at the China Institute of International Studies, told the Global Times.

With bilateral trade of $11 billion in 2015, China is the Czech Republic’s largest trading partner outside the EU and is China’s second-largest trading partner in Central and Eastern Europe.

Central and Eastern Europe have more need for infrastructure compared with Western Europe, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, told the Global Times on Sunday, citing the Hungary-Serbia railway as a good example.

At a summit between China and CEECs in November 2015 in Suzhou, East China’s Jiangsu Province, China closed a deal with Hungary and Serbia to construct a high-speed railway linking the two countries, whose construction in Serbia began in December 2015.

Bai said that “synergy would be easily achieved between China’s Belt and Road Initiative and the EU’s Investment Plan for Europe,” which was proposed by European Commission President Jean-Claude Juncker to attract investments and revive the economy.

In December 2015, China became a shareholder in the European Bank for Reconstruction and Development, a move that will help them better promote synergy between the two development strategies, said Bai.

Market economy status

Although 80 economies, including Russia, Singapore and Australia, have recognized China’s market economy status (MES), the EU has not joined the group so far, making MES an obstacle in China-EU relations, Xinhua reported.

The absence of the EU’s recognition of China’s MES has led to complications with regard to anti-dumping cases, Bai said.

Since it joined the World Trade Organization (WTO) in 2001, China will automatically be granted MES by December 2016, according to the WTO’s accession protocol.

Central and Eastern Europe are becoming “a bridgehead and an important hub” for China’s Belt and Road Initiative connecting Asia and Europe, Zhao said.

“If China cannot enter Central and Eastern Europe, it would be quite difficult to go deep into the Western European market,” Zhao noted.

China, which suffered from a stock market plunge last year and currency devaluation, hopes to strengthen cooperation with an anxious Europe dealing with a refugee crisis, terrorism, an aging population, economic recovery and geopolitical risks, analysts said.

“Both sides need to boost confidence in each other,” Cui said.

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