Identifier
Created
Classification
Origin
05PRAGUE1023
2005-07-08 18:06:00
CONFIDENTIAL
Embassy Prague
Cable title:  

CZECH PM IN CHINA FOCUSES ON BUSINESS, DODGES THE

Tags:  PREL EINV ETRD CH EZ EUN JP 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 001023 

SIPDIS

E.O. 12958: DECL: 07/07/2015
TAGS: PREL EINV ETRD CH EZ EUN JP
SUBJECT: CZECH PM IN CHINA FOCUSES ON BUSINESS, DODGES THE
DIFFICULT ISSUES

REF: PRAGUE 1007

Classified By: Political Officer Kimberly C. Krhounek for reasons 1.4(b
) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 001023

SIPDIS

E.O. 12958: DECL: 07/07/2015
TAGS: PREL EINV ETRD CH EZ EUN JP
SUBJECT: CZECH PM IN CHINA FOCUSES ON BUSINESS, DODGES THE
DIFFICULT ISSUES

REF: PRAGUE 1007

Classified By: Political Officer Kimberly C. Krhounek for reasons 1.4(b
) and (d).


1. (C) Summary. On July 7, ADCM met with Ivan Busniak,
foreign policy advisor to the Prime Minister, to discuss
Czech PM Jiri Paroubek's recent visit to Japan and China. In
Japan, discussions focused on increasing Japanese investment
and UN Security Council Reform. In China, the dialogue was
nearly entirely on trade and investment, with China showing
"surprisingly immense interest" in the CR. Paroubek avoided
sensitive topics like human rights, East Asian security, and
UN Security Council Reform. On his return to Prague Paroubek
declared that Czech-Chinese relations had been elevated to a
new level and that half his cabinet would visit the country
in the coming year. End summary.


2. (C) Busniak explained that having the Czech PM visit
China had long been a priority, although it was not initially
meant to be included in this trip. Another stop was planned
as part of a long-scheduled visit to the international EXPO
in Japan, but this was dropped unexpectedly and China added
to the itinerary with only four weeks to plan. The Czech PM
was happy to have meetings with the "big three" in China --
the PM, President, and Speaker of the Chinese Parliament.
Throughout the visit, the Czechs were impressed with how
well-prepared and well-informed the Chinese were about the
Czech Republic, including their efforts to include references
to famous Czechs, such as composers Antonin Dvorak and
Bedrich Smetana, into the conversations. Busniak felt that
in spite of such knowledge, the Chinese did have lingering
impressions that the Czech Republic had a less-developed
economy than its western European neighbors and said that
Paroubek was at great pains to emphasize the Czech Republic's
qualities as a highly industrialized country.

--------------
JAPAN: INVESTMENT AND UNSC
--------------


3. (C) The PM's visit began in Japan with attendance at the
international EXPO. Although Japan was the longer visit and

included a meeting with PM Koizumi, Busniak had little of
substance to share with us. The main agenda item for the
Koizumi meeting was increasing Japanese investment in the
Czech Republic. Specifically, the Czechs hope that the
recently opened Toyota factory in Kolin will be a catalyst
for new Czech investment. Busniak did not indicate if the
Japanese made any promises. Paroubek and Koizumi also
discussed UN Security Council reform. The Czechs have long
been open supporters of Japan getting a permanent seat on the
Council, and in return, the Japanese told them during the
visit that they could count on Japanese support for the Czech
bid to hold a non-permanent UNSC seat during the 2008-2009
session.

--------------
CHINA: TRADE AND INVESTMENT
--------------


4. (C) Busniak was clearly pleased with the "surprisingly
immense interest" that the Chinese demonstrated towards the
Czech delegation and said that the three meetings there
focused almost exclusively on investment and trade relations.
The visit with the Chinese PM was the most concrete, as
there was both an hour-long meeting and a dinner together.
According to Busniak, discussion focused primarily on 4 to 5
current business projects which are either close to being
launched or are already. These projects include:
Volkswagon's plan to build an assembly plant of Skoda Octavia
cars in China (note: Volkswagon owns Czech automaker Skoda);
Czech financial group PPF's (unspecified) plans for a project
in Szechuan; and the interest of several smaller Czech
companies in the construction of a power plant. On their
side, the Chinese apparently expressed interest in using the
Czech shipyard in Decin to produce ship propellers and other
parts as a joint venture project and the possible
introduction of Chinese color tv screens in the Czech
Republic. Busniak said no concrete deals were sealed during
the visit.


5. (C) Busniak said that the Chinese, perhaps recognizing
the Czech Republic's increased attractiveness as an EU
member, expressed some interest in concluding bilateral
agreements on double taxation and investment protection --
long-standing Czech goals, which the Chinese had previously
not made a priority. In his discussions both with the
Chinese and with the media, PM Paroubek repeatedly emphasized
the attractiveness of the Czech Republic as an "business
entry point into the EU." Paroubek also stressed Czech
investments in the northern and northwestern parts of China,
said to be among the less-developed parts of the country, and
the interest of Czech contractors in projects relating to the
2008 Olympics in Beijing.

--------------
STICKY SUBJECTS: HUMAN RIGHTS AND UNSC
--------------


6. (C) According to Busniak, the Chinese and Czech PMs
discussed human rights only tangentially, when the Chinese
requested that the EU lift its arms embargo, saying that it
was "no longer in line with the EU - China strategic
partnership." In response, Paroubek said that to do so, the
EU would look at a variety of factors, including respect for
human rights and that he hoped that an outcome to the
satisfaction of both parties could be reached. (Note: Some
Czech press commentaries criticized Paroubek's apparent
decision to downplay human rights in Beijing. When queried,
MFA staff report that Paroubek stuck precisely to his talking
points. Both the MFA and Busniak report the Czechs decided
that their leverage on human rights would be greatest in the
context of the EU arms embargo, and that Paroubek did not
have any sort of mandate to pursue the arms embargo with the
Chinese, thus explaining the limited focus on human rights.)


7. (C) Paroubek was apparently equally hesitant to stand
firm in front of the Chinese on the issue of Security Council
reform. Although he had reaffirmed to the Japanese the
long-standing Czech support for a Japanese Security Council
seat just a few days prior, he was reportedly less
forthcoming with his Chinese counterpart who opposes it.
During his meetings with the Chinese PM, Paroubek said only
that the G-4 proposal was "under discussion," although the
MFA had told us before the trip that they supported the G-4
proposal and the GOCR ultimately made a decision to
co-sponsor it (reftel).

-------------- --
COMMENT: TOO MANY HEADS, LITTLE COORDINATION
-------------- --


8. (C) Comment. It was clear from our discussion that the
Czechs were delighted with their reception and "fruitful"
meetings with the Chinese leaders. On his return, PM
Paroubek announced that "half of his Cabinet" would visit
China this year and declared Czech-Chinese relations had been
elevated to a new level. It was equally clear that PM
Paroubek, known as a practical negotiator but not necessarily
a man of principle, is not inclined to deliver strong
messages on sensitive issues, particularly when business is
at stake. While FM Svoboda can, and still does, fill this
role (as we have seen in EU Cuba discussions),his lack of
support within the Czech government was made clear by the
fact that he was not included in the PM's Asia trip at all.
Following the China trip the MFA insisted that the GOCR's
view on the China arms embargo remains firm: no lifting
without progress on human rights and the establishment of a
functioning strategic dialogue between the EU, US, Japan and
others on China. However, with different parts of the
government acting and speaking somewhat independently, policy
messages from the Czech Republic in advance of next year's
elections are likely to remain somewhat disjointed, and
depend largely on the speaker. As the new Czech Ambassador
to NATO Stefan Fule put it in a recent meeting with the
Ambassador, "I am happy to give you my country's policy. Do
you want the one from the President, the Prime Minister, the
Foreign Minister or someone else?" End comment.
CABANISS