China threatened to harm Czech companies over Taiwan visit: letter - Reuters

(Reuters) - Beijing threatened to retaliate against Czech companies with operations in China if a senior Czech lawmaker went ahead with a planned visit to Taiwan, according to a diplomatic letter seen by Reuters.

FILE PHOTO: Chinese President Xi Jinping leaves after a news conference at Prague Castle in Prague, Czech Republic, March 29, 2016. REUTERS/David W Cerny/File Photo

The Jan. 10 letter, which was sent by China’s embassy in Prague to the Czech president’s office, suggested that Czech companies operating in mainland China, such as Volkswagen (VOWG_p.DE ) subsidiary Skoda Auto or lender Home Credit Group, would suffer if Senate speaker Jaroslav Kubera visited the self-ruled island.

Kubera died unexpectedly on Jan. 20, before his trip had been due to take place, but the letter, written in Czech, reveals how explicit Beijing was about the possible consequences if the visit had gone ahead.

“Czech companies whose representatives visit Taiwan with Chairman Kubera will not be welcome in China or with the Chinese people,” the letter said.

“Czech companies who have economic interests in China will have to pay for the visit to Taiwan by Chairman Kubera,” the letter added, noting, “China is the largest foreign market for many Czech companies like Skoda Auto, Home Credit Group, Klaviry Petrof and others”.

The Czech president’s spokesman confirmed the letter had been received but did not comment on its content.

Asked about the letter, China’s foreign ministry said it did not know where the information had come from.

“I want to emphasize that China resolutely opposes a country that has established diplomatic relations with China having official exchanges with Taiwan authorities in any form. This stance has been consistent and clear,” a spokesperson for the Ministry of Foreign Affairs said in a fax.

The Foreign Ministry in Taiwan, which Beijing considers a breakaway province, criticized China’s warning to Prague.

“China’s business pressure on the Czech Republic proves that ‘one belt one road’ is a predatory policy tool, bringing only counter-effects to the global business order,” Foreign Ministry spokeswoman Joanne Ou said.

‘SERIOUS BREACH’

As speaker of the Czech Republic’s Senate, Kubera was the country’s second-most senior official after President Milos Zeman.

Zeman and Prime Minister Andrej Babis had expressed concern that Kubera’s plans to visit Taiwan would lead China to retaliate against the Central European country’s business community.

The Senate’s office said Kubera had been aware of the letter and its content after receiving a copy at a regular meeting of top Czech foreign policy officials.

The Chinese letter warns that Kubera’s trip would be seen as a “serious breach” of the so-called one China policy on Taiwan, under which Beijing insists it is the sole representative of China.

Babis’s government, which has the main say on foreign policy, has repeatedly said it adheres to the one China policy.

However, diplomatic ties cooled last year when city authorities in Prague showed support for Tibet and demanded changes to an intercity partnership agreement with Beijing over a reference to China’s policy on Taiwan.

The agreement was eventually canceled, and Prague instead signed a cooperation deal with Taiwan’s Taipei, further infuriating Beijing.

Another dent in bilateral relations came in December 2018 when the Czech cyber-security watchdog warned about the risks of using network technology provided by Chinese telecoms equipment makers Huawei and ZTE .

A Home Credit spokesman said he had not been aware of the letter, while Skoda could not be reached immediately for comment.

Czech senators elected a replacement for Kubera as speaker on Wednesday.

Additional reporting by Robert Muller, Jan Lopatka and Tom Daly; Editing by Raju Gopalakrishnan and Helen Popper