At the invitation of State President Nguyen Minh Triet, President of the Czech Republic Vaclav Klaus began his four-day official visit to Vietnam on September 29. This is the first visit to Vietnam by the Czech State leader since 1993, marking a new step of development in the relationship between the two countries.

The Czech Republic is located in the centre of Europe and borders on Slovakia, Austria, Poland and Germany.

Before the 1990s, the Czech Republic was a poor country in terms of natural resources with low economic growth. However, after that time, the Czech economy has quickly recovered with a rather high growth rate thanks to sound polices on reform, privatisation and economic restructuring in the 1993-1996 period. In 1996 alone, the Czech Republic’s GDP increased by 4.8 percent and in early 1995, it was admitted to the Organisation of Economic Co-operation and Development (OECD) as an official member.

For many decades, the Czech Republic has been one of the most developed countries in Europe in the early stage of mechanization and electrification with a focus on key production sectors such as heavy mechanical engineering, automobile manufacturing, energy and chemistry. After emerging from the 1997-1999 economic recession, the Czech economy has not only bounced back but is quickly keeping pace with the world economy.

The adjustment of policies such as further strengthening the State’s role in macro management, focusing on long-term development plans, restructuring organisation and modernization, attracting foreign investment and continuing the privatization process has helped the national economy maintain its stable growth, attracting approximately US$5 billion in foreign direct investment (FDI) per year.

Since 2004, the Czech Republic has met four out of the five criteria for admission to the Euro zone and its per capita GDP reached 73 percent of the European Union’s average level, higher than Portugal, taking top spot among nations in Eastern Europe. The country’s GDP growth rate has surpassed the EU’s average rate of 2 percent.

Notably, the country’s GDP hit a record high of 7.4 percent in the first quarter of this year. With such significant progress, the Czech Republic officially joined the European Union in May, 2004.

Vietnam has established fine traditional relations with the former Federation of Czechoslovakia and now the Czech Republic. The Czechoslovak people, including Czech people, always gave strong support and assistance to Vietnamese people in their past struggle to gain independence as well as in their cause of national defence and construction.

The Czechoslovak people helped Vietnam build many important projects such as Vietnam-Czech Hospital, Labour Cultural Palace in Hai Phong port city and Hanoi Children Palace. After Czechoslovakia was split into two independent states-Czech and Slovakia-the Czech Republic still attaches importance its relations with Vietnam. The two countries have exchanged a number of high-level visits.

In the field of economics, Vietnam-Czech relations have seen new positive developments in the past 10 years with the signing of many trade and economic agreements including those relating to double tax avoidance, investment promotion and protection, visa exemption for diplomatic passport holders, aviation services and bilateral economic cooperation. The Inter-Governmental Committee for Economic and Commercial Cooperation was set up in 1998. Ever since, two-way trade revenue has constantly increased from US$41.6 million in 1997 to US$111 million in 2005 with imports from Vietnam hitting US$92 million. On September 13, 2005, the two countries signed a bilateral agreement on economic and trade cooperation to prepare for a common strategy for development cooperation with Vietnam in the 2006-2010 period.

The first visit by President of the Czech Republic Vaclav Klaus marks a new step of development in the relationship between Vietnam and the Czech Republic and provides a good opportunity for the two countries to further promote bilateral cooperative relations for the sake of peace, stability and development.