Investments between China and the Czech Republic

Introduction
In 1949, China and the then Czechoslovak state developed diplomatic ties. Now, trade and diplomatic links between the two nations have flourished. In 2016, Chinese President Xi Jinping became the first Chinese head of government to visit the Czech Republic since diplomatic ties were established. This trip symbolizes how vitally important China regards its relationship with the Czech Republic and the rest of Eastern Europe. Trade between China and Europe has grown as a result of that trip. The Czech Republic is located within the Silk Road Economic Belt; therefore, ties between the two countries will only get stronger. Both countries have encouraged and welcomed trade between China and the Czech Republic in recent years.

Bilateral commerce is becoming an increasingly important economic factor for both countries, and its share of total trade has increased.
Trade and Investments between China and the Czech Republic
The Czech Republic’s central location in Europe, its low labor costs and high levels of education, and its reasonably stable economy (despite periodic political unrest) all work to the country’s advantage. The Czech Republic has a long history of manufacturing, particularly in the machinery and automobile industries. Around 35% of the workforce is directly or indirectly employed in manufacturing, which accounts for 25% of the country’s GDP (World Bank 2016a). Banks in the country were reasonably solid and stable despite an economic slowdown that began after 2009 and was indirectly driven by a decline in global consumption during the recession.

The country’s economy began to recover in 2014. In 2015, the growth rate hit 4% thanks to growing exports caused by rising domestic demand and progress in trading partners’ economies (OECD, 2022). The Czech Republic is one of the fastest-growing economies in the European Union, having the lowest unemployment rate and the most stable administration.

Both China and the Czech Republic are focused on international trade. The benefits and drawbacks of increased trade cooperation are explored in depth by Castro et al. (2017), who examine the trade interactions between two economies. The complementary interaction between the two nations is the subject of research by other academics. Conventional data on trade, such as the quantity of trade deficit and the value-added, may need to be more accurate when attempting to analyze the trade complementary connecting China and the Czech Republic (bti-project.org, 2022).

Value-added statistics associated with global value chains are preferred for assessing China-Czech Republic trade. Value-added analysis techniques are also used to examine the nature of China and the Czech Republic’s commercial exchanges. Trade between the two countries is seen as essential by academics. Opening up new international markets and improving trade efficiency are aided by increased commerce between China and the Czech Republic. The Czech Republic has developed a significant comparative advantage in the industrial sectors, according to OECD research (2022).

European Union member Czech Republic facilitates China’s entry into the EU market. China’s trade competitiveness is tremendous, and the country’s products have rapidly gained market share, causing a shift in the Czech market. According to De Castro, Vlková, & Hnát (2017), exporting goods from the Czech Republic to other European countries is simple due to the extensive presence of Czech exporters in the European market. As a result, it can help China improve its competitiveness, grow its market share in Europe, and increase its trade terms. Additionally, some academics have proposed avenues for economic cooperation between the two countries.