Energy 11 April, 2018 10:00 am   
Editorial staff

Question marks around Chinese expansion in Central Europe

The problems of the Chinese company CEFC in the Czech Republic pose a question not only about economic security related to Chinese investments, but also about the political security of Central Europe – writes Łukasz Kołtuniak for

At the end of February, the Czech media reported that CEFC investments in the Czech Republic, such as Eden; Prague’s Slavia stadium was pledged by an IT corporation. Every now and again information about CEFC debts appears. Many loans taken by this corporation are reportedly of short-term nature. What’s more, the Czech press speculates about the arrest of the head of the Ye Jianming corporation. In the media appeared information that a businessman was arrested in connection with corruption when investing in Africa. What’s more, CEFC was to be taken over by the state agency from Shanghai, Kuo Sheng. In China, there are voices about attempts to save indebted corporations by the Chinese state.

Officially, the company denied this information. CEFC provides excellent financial results and new investment strategies. Meanwhile, I Rozhlas CZ describes how the president of CEFC Czech Social Democrat Jaroslav Tvrdik published a video on which we see the head of CEFC China and the president of the Slavia, Chen Chen Chauto. Chauto was also to be arrested as part of the anti-corruption campaign of the Chinese authorities. To dispel doubts, Tvrdik asks for greetings from Slavia Praga fans. – I am happy to greet our faithful fans – says Chen. – As you can see, I am sitting in my office and I am safe.

The importance of the whole case is raised by the well-known fact that Ye Jianming received the status of advisor to President Milosz Zeman. The value of CEFC investments in the Czech Republic is valued at 40 billion CZK (about 7 billion Euros). The company considered significant investments in the Czech energy sector. What’s more, the corporation has entered the media market by buying, for example, shares in Barrandow TV and Tygodnik Tyden.

Meanwhile, the security of Chinese investments in Central Europe is no longer a question under “good, bad business”. This is a question about the strategic security of Central Europe. Media around the world are speculating about links with CEFC with Hong Kong’s former interior minister Hong Kong Patrik Ho being arrested for corruption. Ye Jianming’s case also delays the execution of transactions between CEFC and Rosneft.

In this situation, one should once again stress the need to preserve an extremely far-reaching caution regarding Chinese investments in Central Europe. The more that we can not count on any reliable information about the actual situation of the Chinese giants. The CEFC debt, 400 million CZK (about 55 billion euros), is referred to as “the result of a risky investment strategy. The bolder expansion of Chinese giants in the energy market and the media market makes this caution even more.