Welcome to the 78th issue of the CEEasia Briefing.
In this issue, we dissect the following topics:
- Indian Prime Minister visits Slovakia
- Lithuania looks to normalize ties with China
- Poland pursues closer cooperation with Taiwan
- The European Council debates China: CEE Perspectives
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1. Indian Prime Minister visits Slovakia
What’s going on? Indian Prime Minister Narendra Modi paid the first-ever visit by an Indian prime minister to Slovakia, where he met Slovak Prime Minister Robert Fico and President Peter Pellegrini. The two sides elevated bilateral relations to a Comprehensive Partnership.
Going deeper… During the visit, the two sides signed 11 agreements and memoranda, covering labor migration, defense cooperation and digital technologies, among others. They also signed a Memorandum of Understanding on labor mobility and announced plans to sign a social security agreement. Modi also met with Slovak business representatives, highlighting opportunities in the automotive, railway, and high-tech sectors. The visit builds on last year’s high-level visits by Indian President Droupadi Murmu to Slovakia and by Slovak President Pellegrini to India during the AI Summit in New Delhi, demonstrating growing political momentum in bilateral ties.
This means… The recent visit indicates growing ties, including in strategic sectors such as defense, supply chains, and critical technologies. As India continues to pursue more active partnerships with the EU and its member states amid geopolitical fragmentation, smaller Central European states, such as Slovakia, are increasingly becoming part of New Delhi’s long-term outreach. For Slovakia, closer engagement with India offers opportunities to attract investment, strengthen industrial cooperation, improve its trade balance, and attract migrant labor needed for the manufacturing sector.
At the same time… Modi’s visit also aligns with Slovakia’s recently adopted Indo-Pacific Strategy, which identifies India as one of the EU’s key partners in the region. It enables Slovakia to narrow the gap with its regional neighbors, many of which have developed more advanced partnerships with New Delhi. Poland elevated its relationship with India to a Strategic Partnership following Prime Minister Modi’s 2024 visit, while Czechia concluded a Strategic Innovation Partnership the same year.
2. Lithuania looks to normalize ties with China
What’s going on? Lithuania is in talks with China concerning “normalization” of their diplomatic relations. The first step would be to issue the long-delayed accreditations to Chinese diplomats who would work at the chargé d’affaires office in Vilnius. Lithuania agreed to open the new office in June. This symbolizes a downgrade from the previous level of Chinese diplomatic representation in the country; China’s embassy in Lithuania suspended its operations in 2021 after Lithuania allowed the opening of the Taiwanese Representative Office.
Going deeper… Lithuania’s improving relations with China are driven by the country’s new coalition government. The Social Democrats (LSDP)-led coalition government has made normalization of ties with Beijing one of its central foreign policy initiatives. The Baltic state has also temporarily suspended negotiations on an economic cooperation plan with Taiwan, although the coalition government collapsed in June, leaving uncertainty about whether the next government will pursue this policy. It is also unclear whether the current foreign minister, Kestutis Budrys (independent), will keep his post, especially as he has been criticized by several figures from both the government and the opposition for his inaction regarding the previous government’s China agenda.
This means… The LSDP-led government marks a shift from the previous conservative administration, led by the Christian Democratic Party (TS-LKD), which presided over a diplomatic spat with China. This was prompted first by Lithuania’s withdrawal from the 17+1 framework of cooperation between China and Central and Eastern Europe, and then by the opening of the Taiwanese Representative Office. The values-based foreign policy of the TS-LKD has long been criticized by the broader business community. Now the LSDP-led government seems set on correcting the course. Part of the grievances concerns Taiwanese investment, which has materialized to a lesser extent and on a smaller scale than initially anticipated.
At the same time… it remains to be seen how quickly and to what extent Sino-Lithuanian relations will be normalized. Learning from examples elsewhere in the world—be it Norway, Japan, or Australia—this process is never quick. It can take several years for political relations with China to improve once they have been strained, and much depends on the political and economic significance of the country in question to China’s own interests. When it comes to Taiwan, Lithuania will probably continue to pursue stronger economic relations with Taipei, given the government’s pragmatism, with the major difference being rhetorical rather than substantive.
3. Poland pursues closer cooperation with Taiwan
What’s going on? Foxconn and the Taiwanese business organization TEEMA will establish a technology park in southwestern Poland. This will occur at a site previously planned to host the semiconductor facility of Intel, which pulled out of the investment in July 2025. While the exact value of the investment is unknown, the complex under consideration may bring up to US$20 billion (€17.5 billion) from Foxconn.
Going deeper… The planned investment will involve a complex of factories operated by Taiwanese companies, forming a broader “tech city.” Central to this will be a large semiconductor plant. The complex is also expected to include zones for battery manufacturing, public infrastructure, smart devices and services, as well as residential and lifestyle facilities. If implemented, it would strengthen Poland’s position in Foxconn’s European assembly network. Poland and Foxconn are also working on an EV manufacturing and R&D hub, which is expected to be financed (€1.05 billion) from debt instruments of the EU’s post-pandemic recovery plan. The EV factory will produce a new joint Polish-Taiwanese SUV and manufacture a total of 400 000 units per year, based on press reports.
This means… Taiwanese investors are increasingly filling the gap left by the withdrawal of Chinese and US companies from Poland. Both of these flagship projects are likely to bring in tens of thousands of jobs. However, these are still based on speculative reports. Nonetheless, this showcases Warsaw’s wish to work with Taipei as a strategic industrial partner in its efforts to attract investment and drive technological re-industrialization.
4. The European Council debates China: CEE Perspectives
What’s going on? At the June 2026 European Council summit, EU leaders agreed that trade imbalances with China are a growing problem, but disagreements over the appropriate response remain. France, Italy, the Netherlands, and Lithuania pushed for new and stronger measures, while Germany and Spain argued for faster and more consistent use of existing EU trade defense tools.
Going deeper… The debate comes amid growing concern over Chinese subsidies, overcapacity, and pressure on European industry. Critics warn that subsidized Chinese industrial exports are costing jobs in the EU. No EU member state has a trade surplus with China. Some leaders are also anxious that the renminbi is substantially undervalued, making Chinese exports even more competitive. Still, only a few leaders criticized Beijing openly or backed tougher countermeasures, likely fearing Chinese retaliation.
This means… The EU is hardening its trade posture toward China, but internal divisions still limit its response. The European Commission has already increased its use of trade defense tools: of the 21 new anti-dumping and anti-subsidy investigations, 18 involve Chinese manufacturers. According to Handelsblatt, the Commission is also considering new countervailing tariffs on hybrid vehicles made in China. Yet major member states such as Germany want to avoid escalating trade tensions, preferring dialogue and using the EU market as leverage in talks with Beijing. For CEE countries such as Lithuania, this means that a tougher China policy still depends on whether larger member states are willing to confront Beijing.
Moreover… Ahead of the summit, EU leaders also discussed whether the bloc should adopt a tougher trade policy tool modeled on the US Section 301 procedure, which allows Washington to investigate unfair trade practices and impose countermeasures. A similar EU tool would allow Brussels to identify unfair trade practices and respond with measures including punitive tariffs.
Quick takes on CEEasia developments
CHINA | Chinese Guizhou Aviation Technical Development (GATD), a manufacturer of forged metal components for the aerospace and energy sectors, is planning to invest €105 million to build a new factory in the Valaliky industrial park in eastern Slovakia, starting in December 2026. The plant will produce seamless forged rings from heat-resistant alloys, and its operation will generate approximately 335 jobs once production begins in 2028.
CHINA | Representatives from the Chinese autonomous driving company WeRide met with Slovak Prime Minister Robert Fico and Transport Minister Jozef Ráž at the invitation of Slovak AI firm DiusAI. The discussion centered on opportunities to commercialize WeRide’s Level 4 autonomous vehicle portfolio in Slovakia, with potential applications in public transportation, smart mobility, municipal sanitation, and logistics.
VIETNAM | The Czech Ministry of Finance, the Czech-Vietnamese Educational Institute and the Association of Young Vietnamese Entrepreneurs in Czechia signed an MoU to improve access to financial, tax and business regulations for the Vietnamese community. The aim is to strengthen compliance, facilitate business operations and deepen economic integration of Vietnamese entrepreneurs in Czechia.
CHINA | A Czech investigation revealed that experts from a Chinese military university received repeated training at Czechia’s Institute for Nuclear, Chemical and Biological Protection since 2024, raising concerns over potential transfers of sensitive know-how with military applications.
CHINA | A cross-disciplinary Hungarian studies research center has been established by Sanming University and Shanghai International University in Sanming, China. The center will facilitate academic exchange and cooperation in practical research, while also strengthening the cultural ties and economic relations between the two countries.
