AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
AUTOMOTIVE
SYSTEMS Co.,
s.r.o.
transport
equipment
Lemtech Precision
Material (Czech)
s.r.o.
metalworking
industry
Production
2017
Yanfeng Czech
Republic
Automotive Interior
Systems s.r.o.
manufacture of
transport
equipment
Production
2017
Espressif Systems
(Czech) s.r.o.
IT and software
development
strategic
service centre
- software
development
centre
2018
XZB (Europe) s.r.o.
manufacture of
transport
equipment
Production
2019
Source: CzechInvest (2019)
Changhong was established in Mianyang, Sichuan province of
China in 1958. The Czech subsidiary started its operation in city
of Nymburk in 2006 and it is one of the 43 foreign subsidiaries
of the company. The Czech production plant focuses on
televisions with LCD monitors. Changhong Europe Electric is
currently Changhong's largest overseas manufacturing and
operation base. The company has created 300 jobs as promised
in their application for the investment incentives from the Czech
government and 91 % of its employees are locals. Guided by the
"Belt and Road" strategy, based on the manufacturing base in
Czech, Changhong Europe Electric has established sales
branches in Czech, Germany, France and Italy, and the European
marketing center in Germany.
Shanghai Maling were granted with investment incentives for
two sequent years in 2007 and 2008. The company operates
canned meat production in Teplice which is the region with high
unemployment rate and belongs to the most structurally
disadvantaged regions of Czech Republic. Starting its history in
China at 1930, Shanghai Maling company belongs to Bright
Food Group Co. Ltd - state owned shareholding company
associating 29 shareholding companies with wide range of
activities. It is the biggest food industry company in China at the
moment. Only 5 % of the total production capacity of pork
luncheon meat and ham was placed on the local Czech market,
the rest was exported to other markets in Europe, East Asia and
USA. In 2017 the Czech subsidiary went bankrupt after almost
two years of continuous problems and it was bought at auction
by another Chinese investor. According to press, the company´s
problems with debts have roots in the dispute over trademark
with China National Cereals, Oils and Foodstuffs Corporation.
Solar Express company specializes in the design and installation
of renewable energy systems however there are no public
information available about the company.
Yapp Czech Automotive Systems is a part of the YAPP
Automotive Systems company with the headquarter in
Yangzhou in China since 1990. The Czech plant focusing on
fluel tanks for automotive industry is active in Mlada Boleslav
since 2010. The location is beneficial due to the local presence
of Skoda company, the largest automotive company in Czech
Republic. Yapp Czech Automotive Systems supplied
Volkswagen with car parts in China since 1988 and this long
term cooperation led to establishing the business relationships
also in Europe. Thanks to the good partnership with Skoda,
Yapp Czech Automotive Systems has been able to expand to
Kvasiny, another Czech city where Skoda has its manufacturing
plant.
Lemtech Precision Material started its production in industrial
zone of Jihlava in 2017. Lemtech comes from Chinese Kunshan
and the Jihlava´s plant is the first and only subsidiary in Europe.
Lemtech produces metal parts used for electrotechnic and
automotive industries, medical devices. Lemtech created about
30 new jobs.
Yanfeng Czech Republic Automotive Interior Systems has two
production plants in Czech Republic. Besides its localization in
Czech Republic, its European presence is on the markets of
Slovakia and Hungary, as other productions plants or technology
center and business center. Yanfeng Automotive Interior is a
joint venture of Yanfeng Automotive Trim Systems Co and
Johnson Controls established in 2015 with a majority share of
the Chinese partner and it already has four production plants in
Czech Republic. The Czech plant produces instrument panels
and cockpit systems, door panels, floor consoles and overhead
consoles for automotive industry, namely for example BMW,
Daimler, Škoda a Volvo. Thanks to its expansion, the company
able to employ much more employees that expected, it plans to
create about 1500 new jobs in total which is a great support for
the local regional unemployment.
Espressif Systems is one of the newest Chinese investor with
state aid on the Czech market headquartered in Shanghai since
2008. This technological company is located in Brno, the second
largest city of Czech Republic and boosting as a start-up locality.
In order to upgrade its customer services for the European
market, it is the first foreign branch of the Espressif company
developing advanced power controls, chips, modules,
development boards and others that are widely deployed in such
products as tablets, OTT-boxes, cameras and IoT gadgets.
Althought the number of newly created jobs is not high (nearly
30 jobs promised in the application), there are aimed for skilled
labour contrary those in production plants as in other cases.
XZB (Europe) located its investment in the industrial zone
Ostrava-Mošnov. The Chinese company was founded in 2002 as
Hangzhou XZB Co., LTD and it is a specialist on research and
development, manufacture and sales of automotive parts. Except
of the headquarter in Hangzhou, Zhejiang province and its
European subsidiary in Mošnov, there is also a branch in
Mexico. XZB (Europe) plans to create 60 job positions.
In terms of regional localization of the investment, the Chinese
investment were located in regions of Central Bohemia (two
investment), Usti nad Labem (three investment), Olomouc,
Vysocina, South Bohemia, South Moravia and Moravia-Silesia.
3 Subventions of Chinese capital inflows
All the mentioned Chinese FDI are the successful beneficiaries
of the Czech system of investment incentives. According to the
Czech law and currently regulation by Act No. 72/2000,
investment incentives in the Czech Republic are following:
income tax discount for 10 years,
transfer of land including related infrastructure at a
discounted price,
300 000 CZK financial support for the creation of new job
position,
50 % financial support for retraining or training of
employees,
10 % financial support for the acquisition of intangible and
tangible fixed assets (for strategic investment),
exemption from real estate tax in preferential industrial
zones (i.e. government-approved industrial zones designed
to promote balanced and dynamic economic development
in the Czech Republic and decreasing the regional
disparities).
The most important of the supported projects is the investment
project Yanfeng Czech Republic Automotive Interior Systems
for both the number of newly created jobs (588) and the size of
the investment (1.85 bil. CZK).
Shanghai Maling's reinvestment in 2012 also received
investment incentives. However, this support did not prevent
bankruptcy in 2017. The contradictions in the effectiveness of
granting investment incentives can be perfectly illustrated at this
company. Shanghai Maling has invested twice in the Czech
Republic, in 2007 and a year later. In both cases, it received
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