Czech trade with China remains in deficit

The Czech-Chinese trade is developing to the detriment of the Czech Republic this year, as domestic firms' exports to China fell by 1.7 percent in January-September while imports from China rose by 13 percent.

China accounts for 1 percent of total exports from the Czech Republic. This share has been almost unchanged since 2011.

The strengthening of bilateral economic relations was the main topic of Czech President Milos Zeman's recent trip to China.

According to the Chamber of Commerce, Czech firms are unable to make sufficient use of the potential that the huge Chinese economy offers and, unlike other European countries, they are not sufficiently active.

Czech exports are getting into the stage of stagnation, which will most likely be replaced by a period of recession in several months, Exporters Association deputy chairman Otto Danek said.

"China has never been a bastion of Czech exports, not only because of its geographic distance, the language barriers and cultural differences, but mainly because it is able to produce most of the goods that we can offer itself, more cheeply and without any time delay connected with transport," Danek said.

Czech exports to China include mainly pumps, microscopes and components to cars and for the energy industry. Imports from China are composed mainly of electronics, printers, copying machines and toys.

The Czech Republic's trade deficit with China reached Kc419bn last year, and this negative trend continues this year.

"From a long-term point of view, Czech exports to China are not falling. Though thea are stagnating this year, it is not a good piece of news. The overall balance stays negative, because imports from China to the Czech Republic rose by more than 13 percent in January-September," Lukas Martin of the Confederation of Industry said.

There is still strong protection over the domestic market and relatively weak protection of intellectual property rights in some areas of the Chinese economy, according to Martin.

He nevertheless added that he hoped the situation would improve. "Czech firms in China are faring well. They are able to supply goods of high quality at reasonable prices and to succeed on the demanding market even despite strong global competition. Our economic relations with China are good, partly thanks to Zeman. We therefore expect our exports to China to grow," Martin said.

Zeman attended the start of the International Import Expo and a Czech-Chinese business forum in Shanghai this week. Both countries signed memorandums in the area of aircraft industry, telecommunications and tourism.

Efforts to attract Chinese investors to the Czech Republic have not been very successful so far. The value of Chinese investments accounts for less than 1 percent of total direct investments.

Source: CTK