Xi Jinping meets with Czech President Zeman during his trip to the Czech Republic on March 28, 2016.
The Czech Speaker’s visit to Taiwan had made considerable waves in the stormy international arena in 2020, with Czech President Zeman’s closeness to the Chinese Communist Party particularly intriguing. The internal documents obtained by the Epoch Times reveal the mysterious bond between President Zeman and the Chinese Communist Party.
The story President Zeman had to tell with the Chinese Communist Party
On December 20, 2020, Czech President Milos Zeman expressed strong support for Russian and Chinese participation in Czech nuclear power construction and criticized the Czech counterintelligence agency for failing to consider the country’s economic interests; previously, the agency recommended that the Chinese Communist Party and Russia be kept out of the country to maintain national security.
Over the past year, a heated debate has erupted in the Czech Republic over whether to involve the Chinese Communist Party and Russia in the construction of new nuclear power plants. According to Voice of America, Czech society is reluctant to budge on principles such as universal values, although President Zeman’s attitude is different.
What is more important, universal values or national security, than economic interests? Zeman’s statement has sparked controversy in the Czech Republic. In fact, Zeman’s attitude toward the Communist Party had undergone a dramatic shift.
Zeman was elected in the first direct presidential election in the Czech Republic in January 2013 and was re-elected in the 2018 Czech presidential election. Although the president has no real political power in the Czech Republic, Zeman’s influence in the political arena extends far beyond the symbolic position of president because of his close ties to the leftist Communist Party and the fact that the current Czech government is a minority government supported by the Communist Party.
Early in his political career, Zeman was wary of the Chinese Communist regime. According to the New York Times on August 14, 2018, Zeman warned against currying favor with the Chinese Communist Party and Russia back in 1996.
But after he came to power, Zeman’s attitude toward the CCP took a 180-degree turn.
In September 2015, Czech President Zeman attended the Communist Party’s Beijing military parade, and he was the only EU head of state to do so. Then, in November 2015, the Czech Republic signed a memorandum of understanding with the CCP to promote the “One Belt, One Road”.
Moreover, President Zeman participated in two consecutive “Belt and Road” international cooperation summits hosted by the Communist Party in 2017 and 2019. Zeman expressed his country’s willingness to participate in the Communist Party’s “Belt and Road” foreign expansion strategy and his hope that Czech companies will participate more in the “Belt and Road” construction.
The government’s decision to choose between national security and economic interests is very clear.
The company’s main goal is to make sure that the company is able to make the best use of its resources. The two Chinese companies that Zeman supports are from an unusual background.
huawei, nominally a private company, has been sanctioned by the U.S. government for allegedly engaging in infiltration and espionage on behalf of the Chinese Communist Party.
In December 2018 the Czech Network and Information Security Agency (Nukib) issued a directive warning that Huawei posed a potential national security threat; President Zeman angrily rebuked his own cybersecurity agency, Nukib, in response.However, weeks after Nukib issued its warning directive, a Huawei employee was arrested by the government of neighboring Poland on espionage charges.
CITIC, a state-owned enterprise directly controlled by the Chinese Communist Party. After Ye Jianming, a businessman with a Communist Party military background, was arrested by the CCP in early 2018, the CCP, through CITIC Group, took over the assets of Ye’s Huaxin Group in Europe and the Czech Republic. Huaxin’s investments in the Czech Republic cover important sectors such as aviation, nuclear power, food, media, internet services, and infrastructure. The CCP’s use of CITIC to directly take over huge assets that affect the Czech state’s livelihood has caused great alarm in Czech politics.
Today, Zeman has become a representative of the “pro-Chinese (Communist) faction” in European and Czech politics.
In early 2020, after the new coronavirus (COVID-19) spread worldwide due to the Chinese Communist Party’s concealment and connivance, Zeman spoke out against international accusations against the Chinese Communist Party in April and praised the Communist Party for its control of the outbreak.
In January 2020, former Czech Senate President Jaroslav Kubera shocked Czech politics when he died suddenly on the eve of a visit to Taiwan. According to Czech media, Kubera had been pressured by President Zeman and the Chinese embassy before his death.
Immediately after the visit of the current Czech Speaker of Parliament Miloš Vystrčil to Taiwan in late August 2020, President Zeman attacked Speaker Vystrčil and reiterated his support for the Communist Party’s Taiwan policy.
President Zeman and the Chinese Communist Party’s middleman: Pai Fu Group
How did President Zeman and the Chinese Communist Party form an alliance of interests? The Hong Kong media “Tuan Media” has revealed this.
According to a November 19, 2020 Tuan Media report, there are two links between the Czech Republic and the Chinese Communist Party: Petr Kellner, the founder of the Czech company PPF Group, and Ye Jianming, the chairman of China’s Huaxin Energy.
Before his mysterious disappearance, Ye was a close advisor to Czech President Zeman. With a background in Chinese military intelligence, Huaxin Chairman Ye Jianming was once the vanguard of the Chinese Communist Party’s efforts to penetrate the European and Czech markets. But after Ye was arrested by the Chinese Communist Party in early 2018, his European assets were taken over by the Chinese Communist Party through the CITIC Group, unexpectedly cutting off Ye’s “link” to China and the Czech Republic.
The Paful Group has been key to the Communist Party’s special relationship with President Zeman. For more than a decade, the Pai Fu Group has acted as an intermediary between the Czech president and the Chinese Communist Party.
Kellner, the richest man in the country, has close ties with Zeman, who returned to the Czech Republic on a private jet rented by Kellner after his 2014 visit to China, a move that has caused controversy for Zeman.
What’s more, Kellner is excited about exploring the Chinese market, having set China as a key target 17 years ago.
Home Credit BV, a Dutch-registered subsidiary of the Piper Group, planned to enter China in 2004 and began developing its business there in 2007, establishing Gitzo Consumer Finance in 2010. Home Credit is not only one of the first four consumer finance companies approved by the Chinese Communist Party, but also the only wholly foreign-owned institution among the 27 licensed consumer finance companies to date.
According to Gitzo Group’s prospectus data, Gitzo Group made a net profit of RMB 3.9 billion in 2018, of which Gitzo Consumer Finance made a net profit of RMB 1.396 billion alone, making it the highest revenue and most profitable consumer finance company in China. Gitzo Group operates in China, Russia and India, but 60% of its business is in China, where the market is its most significant source of revenue.
With the collusion of Kellner and his Pai Fu and Gitzo Group, Zeman has interacted frequently with the Chinese Communist Party.
First, President Zeman made back-to-back visits to China in 2014 and 2015, then Xi Jinping made his first state visit to the Czech Republic in 2016. Zeman then visited China every year from 2017-2019 to call on Xi Jinping. During this period, Zeman promoted the signing of several agreements between the Czech Republic and the Communist Party of China (CPC), and vigorously promoted the CPC’s “One Belt, One Road” into the Czech Republic and Europe.
The secret of Gitzo’s standing in China
It is worth mentioning that in China, Gitzo is not only making a lot of money, but also has a rather special status.
In February 2019, a verdict made public on the website of the Chinese Magistrate’s Office confirmed that Gitzo Consumer Finance had engaged in “loan sharking”. (Screenshot from the website of China Judicial Documents)
While a number of Chinese consumer finance companies have been investigated by the Chinese government in recent years for alleged loan sharking, Gitzo, a leading Chinese consumer finance company, has remained above the fray.
In fact, as early as 2013, Gitzo was exposed by the Communist Party’s CCTV for issuing loans to college students with annual fees of more than 50 percent and for violent collections.
In February 2019, a verdict made public on China’s Judicial Documents website confirmed that Gitzo Consumer Finance had engaged in “loan sharking”. According to a September 5, 2019 report by the Chinese media Southern Weekend, Gitzo has 23,000 telephone and field collection agents worldwide, the largest debt collection team in China and the world.
According to Deutsche Welle on September 5, 2020, Gitzo Financial has been repeatedly exposed in the media as the “king of loan sharks” because of its “ultra-high interest rates” and “violent debt collection” that exceed the limits set by Chinese regulators. It has also been called the “king of loan sharks” and the “only legal loan shark in China”. On third-party complaint platforms, Gitzo Finance is always in the top 10 in terms of complaints, and many cases of borrowers committing suicide and having their families broken are also listed.
However, the negative publicity has not stopped Gitzo from becoming a leading player in China’s consumer finance industry.
German media reported that Gitzo has grown rapidly under the patronage of China’s top brass, and in return, Czech pro-communist interests, centered on President Zeman, have spared no effort to help the Communist Party expand its influence. For example, Gitzo, a member of the Pafo Group, has personally set up, through a public relations firm, a think tank called Sinoskop, which specializes in propaganda for the CCP.
According to NPR, The Guardian and other foreign media, Martin Hala, head of the Czech Sinopsis think tank and a China policy expert, has put the Pifo Group in a very delicate political position in China. The Pifo Group’s company Gitzo has been active in matching the Chinese Communist Party with the Czech government in developing the Chinese market.
The Southern Weekend report also refers to Gitzo’s “special status”, stating that “as the largest Czech company, Gitzo is often seen as an ambassador of friendship between China and the Czech Republic. Every year, Gitzo deploys a large number of people to participate in the Sino-Czech Financial Forum”.
Between 2017 and 2019, Gitzo has participated in the annual forum to promote the Communist Party’s “One Belt, One Road”. (Screenshot from Gitzo China’s website)
According to Gitzo China’s official website, the company participated in various forums to promote the Communist Party’s “One Belt, One Road” from 2017-2019.
However, in 2018-2019, relations between the CCP and the Czech Republic have suffered a cold snap.
First, CITIC Group (CITIC) took over Huaxin’s assets in the Czech Republic after the loss of Ye Jianming in 2018, inspiring the Czech political scene to be wary of the CCP.
This was followed by the Czech government’s sudden change of heart toward Huawei in 2019, following warnings from the Cyber Security Agency (Nukib) about the Huawei threat, announcements by the Czech Ministry of health and Ministry of Justice that they would no longer honor existing contracts to purchase servers from Huawei, and even an exclusive communications contract provided by Huawei to the presidential administration was under review.
In early 2020, former Czech Senate President Jaroslav Kubera’s planned visit to Taiwan drew even more displeasure from the Chinese Communist Party; and Kubera’s sudden death from a heart attack before the trip and a series of speculations related to his death cooled Sino-Czech relations dramatically.
At almost the same time, Gitzo’s business in China also began to suffer a crisis.
Gitzo Financial was first ruled usurious by the Wuhan District Court in Hubei in February 2019, and then lost frequent lawsuits in loan disputes. According to Gitzo Financial’s financial report, Gitzo’s net profit dropped 18.34% year-on-year in 2019.
And Gitzo Group originally applied to the Hong Kong Stock Exchange for listing in July 2019 and passed the HKEx hearing on September 1. But at the threshold, Gitzo Group suddenly announced the cancellation of its Hong Kong listing plan in November 2019.
Entering 2020, Gitzo’s operations deteriorated further, with first quarter net profit plunging nearly 90% compared to the same period in 2019 and the number of employees reduced by nearly 14,000 compared to the end of 2019.
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