Trade and Investment Relations between the Czech Republic and China: The Czech Republic as a Gateway to the EU?

Tereza De Castro (), Jana Vlčková () and Pavel Hnát ()
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Tereza De Castro: Department of World Economy, University of Economics, Prague, Czech Republic
Jana Vlčková: Department of World Economy, University of Economics, Prague, Czech Republic
Pavel Hnát: Department of World Economy, University of Economics, Prague, Czech Republic

Society and Economy, 2017, vol. 39, issue 4, 481-499

Abstract: The Czech Republic benefits from its geographical location, relatively cheap and educated labour force, industrial tradition, high economic growth, and political stability. During the last two decades, Czech-Chinese relations have intensified mainly in terms of trade but also in investment and, in more recent years, also at the political level. In this paper, we assess existing trade and investment relations between the two countries, the Czech Republic’s potential for Chinese trade and investment presence in the EU in comparison to other V4 countries, and also explore the future opportunities and threats for more intensified relations. The trade analysis reveals that the fragmentation of world production has enabled more Chinese value added exports to reach the EU western markets through processing in the Czech Republic. Mutual cooperation can be beneficial for both sides as long as both countries avoid corruption, bridge cultural differences, deal with profit repatriation and prevent misconduct in property rights.

Keywords: Czech Republic; China; trade; investment; global value chains (search for similar items in EconPapers)
JEL-codes: F10 F21 F63 (search for similar items in EconPapers)
Date: 2017
Note: This article was written within the IGA project No. F2/47/2016, entitled “The Influence of Rising World Middle Class on Selected Developing and Developed Regions”, at the University of Economics, Prague.
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