czech republic

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In-depth Business Intelligence 

Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 85,438 69,590 56,800 39
GNI per capita
 US $ 6,740 5,560 5,250 66
Ranking is given out of 208 nations - (data from the World Bank)

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Vaclav Klaus

Private sector 
% of GDP 

Update No: 103 - (28/11/05)

Next elections looming 
The next election to the Chamber of Representatives is tentatively scheduled for June 2006. In the June 2002 ballot, the ruling Czech Social Democratic Party (CSSD) elected 70 lawmakers to the 200-member Chamber of Representatives.
In July 2004, prime minister Vladimir Spidla resigned from his post following a poor showing from the CSSD in the elections to the European Parliament. Social Democratic interim leader Stanislav Gross took over, but resigned earlier this year following allegations regarding the origin of funds borrowed to buy an apartment in Prague six years ago. CSSD vice-chairman Jiri Paroubek-who served as regional development minister-formed a new coalition administration in April.
On Nov. 4, Mirek Topolanek was re-elected as chairman of the main opposition party, the Civic Democratic Party (ODS), for the fourth consecutive time. Topolanek declared, "I highly esteem your trust and I, together with your support, will do everything for our victory in the general election not only in the capital."
The next election to the Czech Republic's Chamber of Representatives could be very close, according to a poll by Factum Invenio. 28 per cent of respondents would vote for ODS, while 27 per cent would support the governing CSSD.
The Communist Party of Bohemia and Moravia (KSCM) is third with 20.6 per cent, followed by the Christian and Democratic Union - Czech People's Party (KDU-CSL) with 11.7 per cent. Support is lower for the Green Party (SZ), the Association of Independents (SNK), the Political Movement Independents (NEZ), Democratic Europe (ED), the Freedom Union - Democratic Union (US-DEU), and the Independent Democrats (NEZ/DEM).

Likely rapprochement with the communists looming
Eight months before national elections, a survey by the STEM polling agency has suggested that if elections were held today Prime Minister Jiri Paroubek's Social Democrats and the Communists would gain a majority of votes in the lower house. If voter preferences don't change dramatically in the coming months, a minority Social Democrat government with the tacit support of the Communists looks like a realistic scenario. 
The prime minister continues to top the polls in public support. Since he became prime minister earlier this year, his Social Democrats have been gaining on the opposition right-of-centre Civic Democrats. According to the STEM polling agency, the Civic Democrats would get just over 30 per cent if elections were held today - only 5 per cent more than the Social Democrats. The Communist Party would get over 13 per cent, somewhat lower than the Factum Invenio poll suggests. 
The Communist Party is already the third strongest party in the Czech Republic, a cause for alarm for some. For his part, Paroubek has said the Communists are not a threat at all.
On the occasion of the 16th anniversary of the fall of communism, Paroubek took back a statement made years ago that the Communist Party should be banned, calling it his stupidest ever statement. He also posed the rhetorical question of whether the Communist Party represented a threat to democracy. Paroubek's answer is that it does not. In his view it is in the best interest of the Czech Republic to integrate the Communists and give their voters a chance to participate in the prosperity of the country. That said, Paroubek has repeatedly ruled out the possibility of a Social Democrat and Communist coalition government, so integration mush have some other meaning for him!.
For many opponents of the former regime it is unacceptable that the Communists are still around but with a stable voter support they remain a force to be reckoned with.

Chinese premier to visit Czech Republic in December
Chinese premier Wen Jiabao, who was to visit the Czech Republic in mid-October but postponed the trip reportedly over internal affairs, is to arrive in Prague on December 8-9 to discuss mainly economic issues with Prime Minister Paroubek and President Vaclav Klaus. 
Wen Jiabao's Czech visit in December will be the first visit by a Chinese premier to the Czech Republic since the collapse of communism. 
Wen Jiabao and Paroubek met each other during Paroubek's visit to Beijing this June, they discussed economic cooperation as well. 
While talking to the Chinese premier in summer, however, Paroubek also touched upon human rights in China, for the non-observance of which Beijing faces criticism from Czech non-governmental organizations and on the world scene. 
During the whole history of the former Czechoslovakia (1918- 1992), only one Chinese premier visited the country, Zhao Zhyiang in 1987. 
Many Czech politicians have visited China recently, but only a few Chinese officials have come to the Czech Republic. Some observers call the current state of bilateral visits rather imbalanced. 
Three Czech prime ministers and President Klaus visited China in the past ten years, while the last significant Chinese visitors to Prague were Foreign Trade Minister Shi Guangsheng (1999) and Foreign Minister Qian Qichen (1996). 
According to information from the Czech government, Wen Jiabao is to sign agreements on cooperation in agriculture and the food industry in Prague, and to negotiate about other economic issues. 
Paroubek proposed in Beijing that the Czech Republic become a partner with Chinese firms within the EU framework. 
Wen Jiabao was originally to tour the Skoda car maker in Mlada Boleslav, central Bohemia, which is to launch production of Octavia cars in Shanghai in 2007. 
However, rumours say that Wen Jiabao is no longer planning to visit Skoda. 
Wen Jiabao and Paroubek are reportedly to confirm the validity of a previous agreement signed by the two countries PMs' in 1999 and to "reflect the changes the two countries' have experienced in the past period," the Czech government said.

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Hyundai will build plant in Czech Republic says Governor 

North Moravian governor Evzen Tosenovsky said recently that he is convinced South Korean car-maker Hyundai will build its newest plant in the Czech Republic. Tosenovsky and Ostrava mayor Ales Zednik returned from a visit to South Korea recently, Prague Monitor reported.
Zednik added Hyundai would decide on the location of its production plant on the basis of road connections and incentives from the Czech government. Hyundai is contemplating building a plant in North Moravia. Zednik said the distance from Zilina, Central Slovakia, where Hyundai's sister KIA is building another car plant, would be a major factor. "The incentives the Koreans expect from the Czech government...will be equally important," he said, adding that Hyundai expected the incentives to at least equal the level offered by the Slovak government to Kia. Hyundai has recently announced a plan to build a 30 billion Czech crowns plant in Europe that should produce about 300,000 cars a year. Experts have said the plant would boost economic growth in the unemployment-stricken region of North Moravia.

Skoda Auto raises market share to 44.2% in Sept

Czech car-maker Skoda Auto raised its share on the Czech market for new passenger and light-utility cars by a half percent on the year to 44.2% in September, spokesman Evzen Krauskopf said, Prague Monitor reported recently.
In the category of light-utility cars, Skoda ranked first with a market share of 29.4% in September. In the segment of passenger cars, the company had a 49.1% share in the domestic market. Skoda Auto will soon release more detailed data on Czech sales for the whole quarter.
New passenger car sales in the Czech market grew by 1.9% to 96,361 units in the first 9 months of the year, the Car Importers Association said. Skoda was the best-selling make with 42,767 cars sold, down 4.7% from a year ago. Unit sales of passenger and light-utility cars rose by 7% to 122,660 and the category of utility vehicles added 31% to 26,299 units.

Tatra to source truck components from Indian JV 

Indian JV will export auto components to Czech truck maker Terex Tatra, aimed at helping the parent company by reducing manufacturing cost, a company official said recently, New Europe reported.
The company's Hosur plant has a capacity to manufacture 1,000 trucks for one shift per year. Tatra Trucks India Ltd, which rolled out its first commercial off-road truck in June 1998, sold 175 units in the country last year and is looking to touch the 200 mark this year. Terex Tatra sales director to India Miloslav Zvarik said, "We are very close to starting (sourcing components). In October, a team visited Tatra Trucks India Ltd plant at Hosur in Tamil Nadu to identify parts that could be sourced."

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Czechs expect foreign investment record this year 

Expanding Japanese and German companies should help push foreign direct investment (FDI) to a new record this year in the Czech Republic, a Prague government agency said. 
According to preliminary estimates FDI is on track to reach 220 billion Czech crowns (US$9.1 billion), nearly double last year's investment inflow and topping the record US$8.4 billion set in 2002, the CzechInvest recruitment agency said. The Czech National Bank, which tabulates foreign investment, recently estimated FDI at US$6.7 billion for the first half of 2005.

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Czech On Line offers ADSL with speed of up to 24 mb

Czech On Line, which acts under the brand name Volny, has started the operation of ADSL, networks allowing a speed of up to 24 megabytes in three Czech towns, the company announced, Praguemonitor reported.
The fastest ADSL access offered by Cesky Telecom now moves around 2 megabytes and cable operators provide a maximum speed of 6 megabytes. The company will provide the access through lines leased from Cesky Telecom. The new networks will enable, for example, watching TV on the Internet and other services. The ADSL2+ technology will be first available in Mlada Boleslav, Kladno and Priram. Czech On Line has been active on the Czech market for ten years. It is fully owned by Telekom Austria. Last year the company raised sales by 10 per cent to 650 million crowns.

First paperless Internet daily launched, the first Czech online daily without a paper edition, was launched overnight on October 31, its publishers announced on November 1, New Europe reported.
Ondrej Tomek Director of mainstream portal said the publication compiled by reputed journalists aimed to become the leader in the sector. "The internet needs more than the offspring of written newspapers," he said. The founders believe the initial investment of 35-million crowns (US$1.41-million) will be recouped within a year, with 90 per cent of the magazine's revenues coming from advertising. According to the English-language Czech Business Weekly one-third of the Czech population, were regular Internet users. had potential considering about 3.6 million Czechs. Internet advertising in the country was expected to grow by 30 per cent to 500 million crowns next year, analysts said.

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Eurotel wins Czech army's tender for mobile operator 

The Defence Ministry of the Czech Republic has approved the tender of the Eurotel Company worth about 380 million Czech crowns for a new mobile operator of the Czech military, the ministry's spokesman, Andrej Cirtek said, New Europe reported.
An inter-ministerial commission recommended Eurotel. The military has been using Eurotel's services for seven years already. The new contract will be effective until 2008 with a possible prolongation until 2011. The military requires coverage of 99 per cent of Czech territory, but experts say this is unrealistic and the ministry is not aware of this condition.

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