Hungary and Serbia welcome Xi 鈥 and Chinese investment 鈥 to Europe鈥檚 struggling economy
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| Budapest, Hungary
When Chinese President Xi Jinping visited Hungary last week, he arrived to one of the few places in the European Union where his country is considered an indispensable ally rather than a rival. By the time he left on May 10, he鈥檇聽secured deals聽that provide fertile ground for China鈥檚 plans of economic expansion in Europe.
After meeting with nationalist Prime Minister Viktor Orb谩n on May 9, the leaders addressed a small group of select media in Hungary鈥檚 capital, Budapest, announcing the formation of an 鈥渁ll-weather partnership鈥 that would usher in a new era of economic cooperation.
As most EU countries make efforts to聽鈥渄e-risk鈥 their economies聽from perceived threats posed by China, Hungary has gone in the other direction, courting major Chinese investments in the belief that the world鈥檚 second-largest economy is essential for Europe鈥檚 future.
While Mr. Xi and Mr. Orb谩n didn鈥檛 unveil concrete agreements following their meeting, Foreign Minister P茅ter Szijj谩rt贸 later said in a video that a deal had been reached on a joint Hungarian-Chinese railway bypass around Budapest, as well as a high-speed train link between the capital and its international airport.
The two countries also agreed to expand their cooperation to the 鈥渨hole spectrum鈥 of the nuclear industry, Mr. Orb谩n said, and deals were reached on China helping Hungary build out its network of electric vehicle charging stations and on construction of an oil pipeline between Hungary and Serbia.
Zsuzsanna Vegh, a program assistant at the German Marshall Fund and visiting fellow at the European Council on Foreign Relations, said those deals were 鈥渁 clear signal that China sees Hungary as a key and reliable ally鈥 in the EU as it seeks to reverse Europe鈥檚 toughening de-risking policy.
Mr. Xi鈥檚 visit, Ms. Vegh wrote in a statement, shows that Hungary鈥檚 government 鈥渞emains indifferent to its allies鈥 concerns and will continue to strengthen its bilateral ties with China in order to position itself favorably in what it perceives as a developing multipolar world.鈥
Pursuing a similar strategy is Serbia, Hungary鈥檚 neighbor to the south, which has also聽provided wide opportunities聽for Chinese companies to exploit its natural resources and carry out large infrastructure projects.
Like Mr. Orb谩n, Serbian President Aleksandar Vu膷i膰 has built a form of autocratic governance that eschews the pluralism valued in more traditional Western democracies 鈥撀爉aking both countries attractive to China as opaque direct deals help to eliminate red tape.
During Mr. Xi鈥檚 visit to Serbia last week, he and Mr. Vu膷i膰聽signed an agreement聽to build a 鈥渟hared future,鈥 making the Balkan country the first in Europe to agree on such a document with Beijing.
Vuk Vuksanovi膰, a senior researcher at the Belgrade Center for Security Policy, said that Mr. Xi鈥檚 interest in Serbia reflects his strategy of appealing to countries that are less committed to a U.S.-led economic and political community.
Mr. Xi鈥檚 鈥渟hared future鈥 agreement with Belgrade, Mr. Vuksanovi膰 said, promotes 鈥淐hina鈥檚 vision of the international order, the one where China is much more powerful, the one where the Western powers, primarily the U.S., no longer have the ability to dictate the agenda to others.鈥
China has poured billions of dollars into Serbia in investment and loans, particularly in mining and infrastructure. The two countries signed an agreement on a strategic partnership in 2016 and a free trade agreement last year.
While Serbia formally wants to join the 27-nation EU, it has been steadily drifting away from that path, and some of its agreements with China aren鈥檛 in line with rules for membership.
Mr. Vu膷i膰 is聽friendly with Russian President Vladimir Putin, and has condemned聽Russia鈥檚 full-scale invasion of Ukraine聽but refused to join international sanctions against Moscow.
The聽red-carpet treatment聽by Serbia and Hungary has worried some of their Western partners, which see China鈥檚 incursion into the region as both an economic and security risk. According to Gabriel Escobar, U.S. envoy for the Western Balkans, Mr. Xi chose to visit the neighboring countries because they 鈥渁re open to challenging the unity of the Euro-Atlantic community.鈥
鈥淲e caution all of our partners and all of our interlocutors to be very aware of China鈥檚 agenda in Europe,鈥 Mr. Escobar said last week.
In February, Hungary聽followed Serbia鈥檚 lead聽by concluding a security agreement with Beijing whereby Chinese law enforcement officers would be permitted to assist their Hungarian counterparts in police actions within Hungary.
The government has said the officers will ensure public safety among Chinese tourists and members of Hungary鈥檚 large Chinese diaspora. But critics say the officers could be used as an extension of Mr. Xi鈥檚 single-party state to exert control over the Chinese community.
As Mr. Orb谩n has deepened relations with Beijing, he has also been engaged in a聽protracted conflict with the EU聽that has seen billions in structural funds frozen to Budapest over concerns that he has captured democratic institutions and abused the bloc鈥檚 funds.
That money shows no sign of arriving any time soon, and Hungary鈥檚 pursuit of additional Chinese developments shows its government 鈥渄oes not envision the possibility of financing such strategic infrastructure projects from EU funds,鈥 Ms. Vegh wrote.
While the inflow of Chinese capital is a boon to Hungary鈥檚聽sputtering economy, having production sites on EU territory also helps Beijing to circumvent costly tariffs and Europe鈥檚 increasingly protectionist policies.
In December, Hungary announced that one of the world鈥檚 largest EV manufacturers, China鈥檚 BYD, will open its聽first European EV production factory聽in the south of the country, and has invited large direct investments in the production of EV batteries.
Such investments, Mr. Orb谩n said May 9, are what will keep Hungary competitive in the future, from wherever they come.
鈥淭he concept driving the Hungarians is that we want to win the 21st century, and not lose it,鈥 he said.
This story was reported by The Associated Press.