Welcome to the 73rd issue of the CEEasia Briefing.
In this issue, we dissect the following topics:
- New China Policy in Prague?
- China pressures EU states on Taiwan
- India-EU FTA
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1. New China Policy in Prague?
What’s going on? According to Hynek Kmoníček, the newly appointed national security adviser to Czech Prime Minister Andrej Babiš, Czechia is likely to shift its China policy from the values-based orientation of the previous government toward a more economically pragmatic approach. Kmoníček has previously served as a foreign policy adviser to former President Miloš Zeman, who oversaw the golden era of Czech-Chinese relations. These peaked around 2018, after which growing disillusionment with Chinese economic promises began to spread across the political spectrum.
Going deeper… The pronounced shift toward economic pragmatism aligns with the foreign policies of several European countries, including Slovakia and Hungary, indicating a growing rift between the foreign policy orientations of some EU member states and European institutions, especially the European Commission, which is currently seeking to implement its de-risking policy. At the same time, this approach largely aligns with the electoral programs of the three right-wing parties forming the current governing coalition—ANO, Freedom and Direct Democracy (SPD), and Motorists for Themselves—all of which have expressed a preference for a so-called “all-azimuth” foreign policy.
At the same time… It is important to note that in his interviews, Kmoníček has also acknowledged Taiwan’s semiconductor prowess and expressed an intention to maintain economic relations with the island nation. Indeed, as suggested by previous Babiš governments, there are likely to be several structural and institutional limits to any across-the-board shift in China policy, not least due to the second Trump administration’s hawkish stance and the significant role of the United States in Czech foreign policymaking. Recent allegations of Chinese espionage and rising concerns about elite capture—as illustrated by links between the accused spy Yang Yiming and several Czech and Slovak politicians, including a foreign policy adviser to the Motorists party, Jan Zahradil—further complicate the picture. This is particularly relevant given the relatively recent public attribution (May 2025) of Chinese cyberattacks on the Czech Ministry of Foreign Affairs, which received extensive coverage in both domestic and international media.
This means… While the rhetoric may become more supportive of China and vocal backing for Taiwan will be toned down, the government is likely to pursue a more pragmatic foreign policy aimed at balancing economic relations with China, the rest of East Asia, and the US. Any substantive realignment will remain constrained by both external and internal factors, most notably the broader geo-economic environment and the US’s economic and security leverage over smaller CEE states, which are likely to outweigh other considerations.
2. China pressures EU states on Taiwan
What’s going on? China is pushing European countries to deny entry to Taiwanese politicians by citing a restrictive interpretation of EU visa rules, framing such visits as crossing Beijing’s “red lines” and potentially harming EU–China relations. While much of Europe views the legal argument as unfounded, Beijing employs this strategy to diplomatically isolate Taipei and intimidate EU states, particularly smaller ones.
Going deeper… Chinese officials issued diplomatic demarches to several European countries in November and December 2025, in various forms. Beijing’s claims are based on an interpretation of existing EU regulations, including the Schengen Borders Code, which emphasizes the provision on denying entry to visitors who may pose a risk to member states’ international relations. This indicates that China views Taiwanese officials entering any EU country as a threat to relations with China. Such perceptions differ from the European side’s understanding. The warning tone, however, has placed smaller European countries in a difficult position, as some seek to attract China’s investment.
This means… Despite Beijing’s claims of respecting European sovereignty over visa policy, its messaging has been seen as an effort to influence internal EU decision-making. Although the EU does not formally recognize Taiwan, it maintains informal diplomatic and economic ties with Taipei, creating space for closer interaction. China’s unusual move fits into the broader pattern of its ongoing efforts to isolate Taiwan internationally and deter further cooperation.
Moreover… Chinese actions follow recent visits by Taiwan’s vice president, foreign minister, and former president to several EU countries. Based on the recent CEIAS paper tracking Europe-Taiwan relations, the volume of mutual visits increased more than sixfold from 2019 to 2024, reflecting a shift from unofficial to more formal meetings.
3. India-EU FTA
What’s going on? After nearly two decades of negotiations, the EU and India have finally reached an agreement on a historic trade deal. External pressures, especially Donald Trump’s protectionist tariffs and China’s overwhelming export strength, helped to push this landmark pact across the finish line.
Going deeper… Brussels and New Delhi resolved long-standing disagreements on tariffs and regulations across several areas by concluding a Free Trade Agreement (FTA). The pact will eliminate levies on over 90% of goods, though for some of them through phased reductions and selective quotas. According to the deal, India will cut its high import duties on automobiles, advanced machinery and premium alcohol, making the world’s most populous market more accessible to European producers – especially in the stagnating automotive industry. The EU is already India’s largest trading partner, and its exports are expected to double by 2032 as a result of the deal. The agreement is also expected to provide a significant boost to Indian manufacturing, farmers, small businesses, and labor mobility, and is regarded as a further step in supporting the “Make in India” policy through increased European technology and investment inflows.
That said… Persistent disagreements over agriculture—namely dairy and sugar, which India strongly opposed opening—were excluded from import liberalisation. As a major steel exporter, India raised concerns about the implications of the EU’s Carbon Border Adjustment Mechanism (CBAM). In response, Brussels promised financial and technical support to Indian steel and aluminum exporters. The agreement also includes strong protection for EU trademarks, designs, and copyrights, and for intellectual property, and, on sustainability, provides €500 million in climate funding for India’s emissions-reduction efforts and green transition.
Moreover… This deal goes well beyond trade and includes a strong geopolitical and strategic dimension. While most of the attention focused on the FTA, India and the EU also advanced talks on a Security and Defence Strategic Partnership and on Climate Action covering areas of shared interests – from maritime security and counter-terrorism to supply chain resilience and sustainability.
This means… In economic terms, the deal represents the most extensive market opening India has ever granted to a trade partner, not to forget that India recently concluded several other FTAs, including with the EFTA countries, the UK, Australia, New Zealand, and parts of the Arab world. For Delhi, the deal proves its growing centrality in the global economy, and for the EU, it represents the first FTA with a major emerging economy and further economic diversification, following the conclusion of the FTA with Mercosur. At the time of increasing global uncertainty posed by economic pressure from the US as well as efforts to de-risk from China, the agreement holds an eminent significance in trade liberalization and diversification for both sides. Although politically agreed, the detailed text as well as formal signing of the “mother of deals,” as it is referred to in Brussels and New Delhi, will take place later this year, following approval by the European Parliament and the European Council.
Quick takes on CEEasia developments
CHINA | On 17th January, the Czech National Counterterrorism Center, in cooperation with the local counterintelligence agency, arrested a person suspected of spying for China, who faces prosecution for unauthorized activity on behalf of a foreign power. He posed as a journalist for the Guangming Daily—a national Chinese-language daily established in 1949 and run by the CCP since 1982—and, according to suspicions from local security forces, was trying to collect information from politicians with whom he maintained contacts.
JAPAN | Japan has appointed a new Ambassador to Hungary, His Excellency Ambassador Kimura Tetsuya, who presented his credentials to the Hungarian President on January 13, 2026. Ambassador. Ambassador Kimura has moved from his previous post in East Timor to Budapest, and he has prior experience from postings in Central Europe. Between 1989 and 1991, he was posted to Austria, and between 2017 and 2020, he served as Japan’s Consul General in Munich.
CHINA | The Polish military has banned Chinese cars from entering certain bases in the country due to the numerous data-gathering sensors in most modern cars, which could threaten their security, recent reports show. A Tesla vehicle, some of which are produced in China, has also been denied entry to one of the bases. The Polish Ministry of Defense has subsequently confirmed to the local news agency that it will seek to implement a comprehensive policy “to restrict the entry of Chinese-made vehicles into the protected military units and facilities.”
PHILIPPINES | The Philippines has lifted a temporary ban on pork and pork products from Poland, after being imposed in 2014 to protect the Philippine market from African swine fever (ASF). The decision comes after months of negotiations led by the Polish Meat Association, with support from the Chief Veterinary Inspectorate and the Ministry of Agriculture and Rural Development and allows exports from Polish regions free of ASF.
CHINA | In late January, the first Sino-Hungarian Industrial Park was inaugurated in Wuxi, marking an unprecedented, first-of-its-kind industrial cooperation project between China and a foreign country. Covering 18,000 square meters of office and production space, the park offers Hungarian companies utility subsidies and tax exemptions during their first three years of operation. Three Hungarian firms are currently planning to establish their presence in the park.
