China’s Ties With Key European Ally Nosedive Over Taiwan

Peter Laca

(Bloomberg) -- China’s relationship with a country that was supposed to be a key proponent of its interests in Europe is growing increasingly caustic.

The Czech Republic, an ex-communist member of the European Union, once hoped to become a gateway for investment to the continent. But spats over Chinese territorial claims, Huawei Technologies Co. and espionage have strained ties to the breaking point.

Czech President Milos Zeman, so far the staunchest backer of closer relations, has even canceled a planned visit.

The latest tension came as the local government in Prague signed a partnership treaty this week with the Taiwanese capital, Taipei. Prague had already ended a sister-city agreement with Beijing after rejecting demands to sever ties with Taiwan and Tibet.

The Taiwan pact angered China, with Shanghai announcing Tuesday it was suspending official contacts with Prague. It accused the Czech capital of interfering in Chinese internal affairs and acting inappropriately on issues “that bear on the core interests” of the Asian nation.

“We urge the administration of Prague to realize its mistakes as soon as possible, remove the negative impact through concrete actions, and adhere to the One China principle,” Shanghai’s municipal government said in a statement.

Although the Communist Party claims Taiwan as part of the People’s Republic of China, Beijing has never extended its control across the Taiwan Strait. China has stepped up efforts to diplomatically isolate Taiwanese President Tsai Ing-wen, who reaffirmed her stance that the island is already an independent country after winning re-election to a second term Saturday.

China requires countries to accept that both sides are part of “one China” as a pre-condition for diplomatic ties. Chinese regulators and nationalism-charged social media campaigns have forced global airlines, hotel chains, clothing manufacturers and others to alter products and services to ensure that places like Hong Kong, Taiwan or Tibet aren’t treated as countries.

Prague has long been a bastion of support for Tibet, with politicians repeatedly hosting the exiled Dalai Lama -- who Beijing considers a separatist leader. Upon taking office in 2018, the new liberal administration restored late President Vaclav Havel’s practice of flying the Tibetan flag from city hall.

The national government had taken a different tone. Police suppressed peaceful protests and forced people to remove Tibetan flags from their homes when Chinese President Xi Jinping visited in 2016.

But there have been signs of strain. The Czech Republic’s top intelligence agency last year in November that China had increased its efforts to recruit agents and destabilize state institutions as it and Russia continued to threaten the nation’s security.

On Sunday, Zeman canceled an April visit to the 17+1 summit between China and countries from central and eastern Europe, saying the Asian nation had failed to deliver on pledges of billions of dollars in investments. “I don’t think the Chinese side has fulfilled what it promised,” Zeman said in an interview streamed online.

(Updates with Taiwanese election in sixth paragraph.)

--With assistance from Peter Martin, Brendan Scott and Karen Leigh.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Andrew Langley

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