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Gateway to success, innovation and the future

China Daily | Updated: 2016-03-30 08:20

Editor's note: The following overview of the Czech Republic's economy is provided by CzechInvest, the government agency of the Ministry of Industry and Trade responsible for investment and business development. CzechInvest offers consulting on foreign direct investment and information on the overall business environment and investment opportunities in the Czech Republic. It has an office in Shanghai.

The Czech Republic is the most highly developed industrialized economy among the Central and Eastern European Countries. The economy's performance in 2015 was very strong and with GDP growth of 4.3 percent, the country ranks among the fastest-growing economies in the European Union.

According to a number of economic, social and political indicators, the Czech Republic also ranks among the world's most advanced countries. Industrial production accounts for 47.3 percent of the country's commercial economy, which is more than in any other EU member state.

Gateway to success, innovation and the future

The Czech Republic hosts over 100,000 foreign companies of all sizes, including well-known multinational companies such as ABB, Foxconn, Honeywell, Continental, Ford, Panasonic, IBM, Microsoft, DHL, Astra Zeneca, Rockwell, Procter & Gamble, Renault, Siemens, Robert Bosch, Tyco, TPCA, Hyundai and Volkswagen, which all have significant subsidiaries in the Czech Republic.

Advantages and benefits

The Czech Republic offers a strategic location right in the middle of Europe, which drastically reduces the logistics costs associated with serving the Eastern and Western European markets. The significance of the Czech Republic as a transit hub has grown since it became a member of the EU Single Market.

The main investment opportunities in the Czech Republic are in aerospace, the automotive industry, clean-tech and energy, electronics, business support services, engineering technology and machinery, software and ICT, and nanotechnology and nanomaterials.

The Czech Republic has one of the highest concentrations of automotive-related manufacturing and design activity in the world.

The combination of a strong engineering background, extensive testing experience, excellent product reputation and high product reliability in various climatic conditions reinforces the Czech Republic's competitiveness at the global level and enables further development of characteristically high-quality aerospace products. A recent major achievement has been the introduction of the new GE H80 turboprop engine designed, developed and produced in the Czech Republic.

With national and EU support, the Czech Republic creates a broad range of opportunities for investors to design, manufacture and deliver new technologies for environmental protection and energy savings for more than 700 million consumers in the European market.

As shown by the FDI Benchmark 2015, in terms of the individual quality criteria within the Presence of Industrial Clusters category, the industry specialization of Czech nanotechnology is ranked the third-highest in the world followed by the Republic of Korea (fourth), Germany (fifth) and Japan (sixth). The top two countries are Switzerland and the United States.

Czech companies have already made a significant mark on ground-breaking technologies in relation to hologram production, nanofibers, speech recognition software, hyaluronic acid, cybernetics, stem-cell research and astrophysics (the Czech Republic has the densest concentration of astronomical observatories in the world).

The Czech Republic has also emerged as Europe's top location for the offshoring and outsourcing of IT services.

Chinese investments

The Czech Republic is very open to Asian countries. Furthermore, its workforce adapts easily to Asian cultures, which makes it easier for companies to operate here, especially in the manufacturing industry. This is one of the key reasons why the Czech Republic has become a top location for over 350 Asian companies, of which about 50 percent operate production facilities here, including the Chinese firms Changhong Electric Co, Shanxi Yuncheng Plate-making Group, Yapp Automotive, Shanghai Maling (Bright Food Group Co), Huawei, ZTE, Noark Electric Europe HQ (CHINT Group) and CRRC Corporation, which operates a research and development center in cooperation with the Faculty of Electrical Engineering at the Czech Technical University in Prague.

The latest investments include those of the multinational white goods and electronics manufacturer Hisense, which established a manufacturing plant in the Plzen region that allows it easy access to the Western European market, and Beijing West Industries, which broke ground on a new automotive suspension manufacturing plant in the city of Cheb, near the border with Germany, where many of BWI's customers are located.

(China Daily 03/30/2016 page8)

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