Market Briefing : The Czech Republic

ECONOMIC SITUATION

The Czech Republic is a landlocked country located in the heart of Europe. It was formerly known as Czechoslovakia and the country peacefully split into the Czech and Slovak Republics in 1993. The country borders Poland to the north, Germany to the northwest and west, Austria to the south, and Slovakia to the east. Today, the country is composed of the historic regions of Bohemia and Moravia as they were during the period of the Austro-Hungarian Empire, as well as parts of Silesia, with Prague as the capital and largest city.

A shopping centre in Prague	An assembly line at the plant of Czech car producer Skoda	Glass production in the town of Svetla and Sazavou

BUSINESS OPPORTUNITIES

Dairy Food Industry
The market price for milk has been at an eight year high, due to the high international demand for formula milk powder, the price in Europe has risen 40% this year. Dairy food manufacturers found that the manufacture and export of formula milk powder products are more profitable that marketing fresh milk for the domestic market. Experts believe that the increase in market demand for dairy products originates from the vast demand from China, which has increased 15% this year. In the past, this demand was mainly met by Australia and New Zealand, however, due to continuing droughts in these countries, there is a shortage in dairy product exports.

Service Industry
According to the EM20 Index released by PricewaterhouseCoopers (PwC) in the ranking of the manufacturing and services businesses in 20 key emerging markets, the service industry in the Czech Republic ranks 4th. with an index score of 56 in terms of its attractiveness for overseas investors, while the manufacturing industry ranks 17th with an index value of 64. The fact that the service industry ranks higher than the manufacturing industry may encourage the Government to provide a more favourable business environment. The increased salaries that can now be paid will also create more job opportunities. The PricewaterhouseCoopers EM20 Index incorporates factors including GDP per capita, projected economic growth rates, profit taxes, transport costs to major export markets and risk aspects.

Construction Industry
The construction industry in the Czech Republic has been growing steadily in recent years with a growth of 6.6% in 2006. The favourable growth was because of the following factors: the increase in mortgages, building savings banks and the financial subsidies offered to young couples which encouraged the growth in high rise residential buildings and houses, land developments of foreign developers which mainly focus on the construction of commercial properties, and the construction of new road systems and motorways and the renovation and modernisation of main roads and railroads promote the sustainable development in civil engineering.

MAJOR WEBSITE RECOMMENDATION:

• THE MINISTRY OF INDUSTRY AND TRADE OF THE CZECH REPUBLIC WEBSITE
  http://www.mpo.cz
  The website of the Ministry of Industry and Trade of the Czech Republic will provide the latest information on commercial policies, especially those relating to taxation, enterprises, trade and foreign investment.

• THE CZECH REPUBLIC OFFICIAL WEBSITE
  http://www.czech.cz/
  The Czech Republic Official Website is a formal website that publishes reliable information about the country policies, laws, and government decisions and the social economic development in The Czech Republic.

• NATIONAL TRADE PROMOTION AGENCY OF THE MINISTRY OF INDUSTRY AND TRADE OF THE CZECH REPUBLIC
  http://www.czechtradeoffices.com
  As the primary trade promotion agency of the government, the National Trade Promotion Agency of the Ministry of Industry and Trade of the Czech Republic produces and provides an up-to-date investment environment in the Czech Republic and statistical data and services.

Source: CIA- The World Fact Book- Poland, https://www.cia.gov/library/publications/the-world-factbook/geos/ez.html

Source: World Economic Factbook 2006/2007, CIA- The World Fact Book- The Czech Republic
Main Exports – commodities: Machinery and equipment, Semi-manufactured items, Chemical, Raw materials and fuels
Main Imports – commodities: Machinery and equipment, Semi-manufactured items, Raw materials and fuels, Chemical

Note 1 : Exports = Domestic Exports + Re-exports
Note 2 : From May 2000, data on Transit is only available up to the 4th digit of NCEM/HS

SOURCE:

• The Ministry of Foreign Affairs of the People’s Republic of China
  http://www.fmprc.gov.cn/chn/
• The Ministry of Commerce of the People’s Republic of China
  http://www.mofcom.gov.cn/
• The Embassy of the People’s Republic of China in the Czech Republic
  http://www.fmprc.gov.cn/ce/cecz/chn
• The Economic and Commercial Counsellor’s office of the Embassy of the People’s Republic of China in the Czech Republic
  http://cz.mofcom.gov.cn/index.shtml
• Macao Statistics and Census Service
  http://www.dsec.gov.mo/c_index.html
• Macao Economic Services
  http://www.economia.gov.mo/
• The Economist Intelligence Unit
  http://www.ipim.gov.mo/en/
• The Ministry of Industry and Trade of the Czech Republic Website
  http://www.mpo.cz
• The Czech Republic Official Website
  http://www.czech.cz/
• The National Trade Promotion Agency of the Ministry of Industry and Trade of the Czech Republic Website
  http://www.czechtradeoffices.com
• The World Factbook
  http://www.cia.gov
• World Economic Factbook 2006/2007
• European Commission
  http://ec.europa.eu

SOURCE:

• European Commission
  http://ec.europa.eu/enlargement/archives/enlargement_process/past_enlargements/eu10/pictures/ezech_republic_en.htm