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China Seeks Influence in Europe, One Business Deal at a Time

China Seeks Influence in Europe, One Business Deal at a Time

PRAGUE — When Xi Jinping became the first top Chinese leader to visit the Czech Republic, he was accompanied by a mysterious Chinese tycoon with big political ambitions, money to burn and strong ties to the Czech president.Ye Jianming was the sole businessman among the group of Chinese and Czech government officials who gathered two…


PRAGUE — When Xi Jinping became the first top Chinese leader to visit the Czech Republic, he was accompanied by a mysterious Chinese tycoon with big political ambitions, money to burn and strong ties to the Czech president.

Ye Jianming was the sole businessman among the group of Chinese and Czech government officials who gathered two years ago outside the presidential summer residence where Mr. Xi and Milos Zeman, his Czech counterpart, planted ginkgo trees. For Mr. Ye, it was recognition of his role as a major power broker in Prague, having bought landmark properties, a local brewery and a much beloved soccer team.

The meeting — and the presence of Mr. Ye — cemented China’s newfound influence on politics and business in Mr. Zeman’s Czech Republic and signaled its broader ambitions in Europe.

In just two years Mr. Ye’s company, CEFC China Energy, had spent more than $1 billion on deals in the Czech Republic. He hired former Czech officials, including a onetime defense minister. Mr. Ye was even named a special economic adviser to Mr. Zeman.

an American military ally and a country once seen as a bulwark for liberal democracy in a strategically important region. As Mr. Zeman declared, the Czech Republic hoped to become “an unsinkable aircraft carrier of Chinese investment expansion” in Europe.

Then, Mr. Ye was detained in China this year, exposing the Czech Republic to the perils of this new relationship and forcing the president to defend his quick embrace of the Chinese deal maker. While the reason for Mr. Ye’s detention was never made public, critics of the Czech president saw Mr. Ye’s disappearance as proof that the country shouldn’t have tied its future and its fortune to the Chinese.

An emboldened, globally ambitious China is using money, business deals and other incentives to extend its power abroad. The pitch can hold great appeal in a world shaken by Washington’s growing disengagement and Europe’s struggles.

allegations in the United States that a senior business associate of CEFC had tried to bribe his way into new business opportunities in Africa.

Mr. Zeman dispatched a team of officials to determine what the tycoon’s problems meant for the Czech Republic. He soon found out.

Prague was about to become even more enmeshed with the Chinese government. A state-owned company stepped in to take control of Mr. Ye’s empire, fueling suspicions that the company was politically important to the Chinese leadership.

he told a local newspaper in 1996, are “ready to go under plastic surgery to slant their eyes.”

But the realities in Europe were changing by the time he won the Czech presidency in 2013.

The global financial crisis had tested Europe’s unity. Refugees from Syria had begun to arrive, fueling nativist sentiment and pitting local politicians against the bloc’s leaders. Western Europe no longer seemed to be the only option.

almost all of the South China Sea. Eastern and Central Europe didn’t have the same qualms.

Looking for further inroads, China started what came to be called the 16+1 initiative, an effort to expand cooperation with more than a dozen Eastern and Central European nations. It became a forum for China to show off what it could offer the region, like access to technology for a high-speed rail system. Mr. Xi later included Eastern and Central Europe in his Belt and Road Initiative, an ambitious plan to develop economic and diplomatic ties through infrastructure projects around the world.

China’s influence in Europe is already apparent. Greece last year blocked a European Union statement in the United Nations criticizing China’s human rights record. Greece and Hungary worked to water down a 2016 European Union statement regarding the South China Sea.

For Mr. Zeman, the courtship basically had to start from scratch.

The former Czechoslovakia recognized the Communist-led China in 1949, but a rift between Moscow and Beijing kept them apart. The post-Soviet Czech Republic, remembering the brutal 1968 Soviet crackdown on reform efforts in Prague and subsequent Communist domination, found common cause with Beijing’s critics.

Vaclav Havel, the anti-Communist activist and the country’s first leader after the fall of the Berlin Wall, invited the Dalai Lama to a state visit in 1990, angering Beijing. He had stern words for China. “Intimidation, propaganda campaigns, and repression,” he wrote, “are no substitute for reasoned dialogue.”

he showed up at his inauguration drunk, broke with that history. He rejected Havel-era support for the Dalai Lama and its close ties to the government of Taiwan.nearly a decade. A year later, he was the only European Union leader to attend a military parade celebrating the 70th anniversary of the end of the Second World War. That helped him secure Mr. Xi’s 2016 visit to Prague.

“This is a restart,” Mr. Zeman told Chinese official media before Mr. Xi’s visit, adding that the previous government had been “very submissive” to the United States and the European Union.

“Now, we are again an independent country,” he said, “and we formulate our foreign policy, which is based on our own national interests, and we do not interfere with the internal affairs of any other country.”

Mr. Ye was part of a group tied to the Chinese military, according to documents and experts. On its website, CEFC cited the military and Communist Party experience of its top executives.

The Czech Republic made a tempting target for CEFC’s international push. The country was a member of the North Atlantic Treaty Organization, was disillusioned with the West and ready to do business.

CEFC bought a stake in Florentinum, one of Prague’s biggest office complexes. It invested in the Czech national airline, two hotels and a pair of Renaissance-era buildings. It bought a brewery that traces its roots back more than 700 years.

Mr. Zeman’s staff trumpeted the deals as proof that courting China made economic sense.

“People believed the rhetoric,” said Olga Lomova, the head of the Chiang Ching-kuo Foundation International Sinological Center of Charles University in Prague. “We have the Chinese. We will be happy again.”

Uighur minority of western China, where the authorities there have cracked down on the local population. He said he was harassed by a group of Chinese men bused into the event.

“When I took the flag out, everyone attacked me,” he said, adding that he escaped serious injury. “They pulled me into the middle of this group and started kicking me and hitting me with the flag poles they were carrying. One even broke a pole on my back.”

new Chinese limits on money flowing abroad.

The revocation of an award to a famous Czech Holocaust survivor also set off outrage. George Brady, an 88-year-old Holocaust survivor, was set to be honored at a Czech state dinner in 2016 and receive a medal for his work. His sister, Hana Brady, died in the gas chambers in Auschwitz, and he had turned her story into a popular children’s book called “Hana’s Suitcase.”

But his nephew was the Czech Republic’s culture minister — and he was set to meet with the Dalai Lama. Before the ceremony, the nephew, Daniel Herman, received a call from Mr. Zeman’s office.

buy just under half of CEFC’s Europe venture. While Mr. Ye’s ties to China’s leadership had been just rumored, Citic is a company firmly under Beijing’s control. Citic didn’t respond to requests for comment.

If a direct role for Beijing in Czech businesses bothered Mr. Zeman, he has shown little public sign. He is set to make another visit to the Chinese capital this autumn.

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