The Central European Institute for Asian Studies (CEIAS), a pan-European think tank, is reporting that Chinese corrosive capital is used to gain access to critical assets, facilitate elite capture, and distort local discourse on China in Slovakia and Czechia. The CEIAS report describes Corrosive capital as follows:
The notion of corrosive capital refers here to financing, whether state or private, that lacks transparency, accountability, and market orientation. It typically originates from authoritarian regimes (i.e., China, Russia), and exploits governance gaps to influence policymaking in recipient countries.
The CEIAS report argues that investments made by the Chinese conglomerate CEFC are a major avenue through which Chinese corrosive capital is being injected into Czechia and Slovakia:
- These investments largely targeted (either directly or via local intermediaries) various critical assets in the media, banking, and telecommunication sectors. In Slovakia, one of the most striking examples of Chinese corrosive capital is CEFC’s indirect stake in the SWAN company, which is charged with operating the Slovak government’s communication networks GovNet.
- Chinese financing can have a detrimental impact on the independence of media. An investment made by CEFC into Czech media resulted in them publishing only stories that portrayed China positively.
- In the Czech Republic, Chinese investments were utilized as the main vehicle for fostering relations with local political elites. Due to ineffective revolving door regulations, several former politicians and diplomats were hired by Chinese companies and their local proxies to lobby on their behalf. Since then, some of these politicians (including the current Minister of Foreign Affairs), have returned to government positions. Chinese corrosive capital is also used to influence expert discourse in both Slovakia and Czechia. This is done either by direct payments from the Chinese embassy to local academics or via Confucius Institutes. Chinese entities have also been attempting to influence expert discourse and gain access to local elites via providing finance for prestigious conferences.
Read the full report here.
In August, we published an investigation into how China has increased its resources devoted to creating lobby groups, friendship associations, academic initiatives, and business councils in France, Britain, and Germany in order to foster elites sympathetic to China. Other recent GIOR coverage on China’s elite capture in Europe has included:
- In August, we reported that China’s strategic influence objectives in Germany are aimed at delivering concrete benefits to China’s industry and infrastructure and sway political and economic decision-makers in its favor.
- In August, we recommended a report examining the Chinese Communist Party’s relations with political elites in Estonia.