China's ties with key european ally nosedive over Taiwan

[PRAGUE] China's relationship with a country that was supposed to be a key proponent of its interests in Europe is growing increasingly caustic.

The Czech Republic, an ex-communist member of the European Union, once hoped to become a gateway for investment to the continent. But spats over Chinese territorial claims, Huawei Technologies  and espionage have strained ties to the breaking point.

Czech President Milos Zeman, so far the staunchest backer of closer relations, has even cancelled a planned visit to China.

The latest tension came as the local government in Prague signed a partnership treaty this week with the Taiwanese capital, Taipei. Prague had already ended a sister-city agreement with Beijing after rejecting demands to sever ties with Taiwan and Tibet.

The Taiwan pact angered China, with Shanghai announcing Tuesday it was suspending official contacts with Prague. It accused the Czech capital of interfering in Chinese internal affairs and acting inappropriately on issues "that bear on the core interests" of the Asian nation.

"We urge the administration of Prague to realise its mistakes as soon as possible, remove the negative impact through concrete actions, and adhere to the One China principle," Shanghai's city government said in a statement.

Prague has long been a bastion of support for Tibet, with politicians repeatedly hosting the exiled Dalai Lama - to China's annoyance. On taking office in 2018, the new liberal administration restored late President Vaclav Havel's practice of flying the Tibetan flag from city hall.

The national government has taken a different tone. Police suppressed peaceful protests and forced people to remove Tibetan flags from their homes when Chinese President Xi Jinping visited in 2016.

But Mr Zeman has shown signs he's now souring on China.

On Sunday, he cancelled an April visit to the 17+1 summit between China and countries from central and eastern Europe, saying the Asian nation had failed to deliver on pledges of billions of dollars in investments.

"I don't think the Chinese side has fulfilled what it promised," Mr Zeman said in an interview streamed online.

BLOOMBERG