Sino-Hungarian relations: Xi’s ‘Trojan Horse’ in the EU
Sino-Hungarian relations: Xi’s ‘trojan horse’ in the Eu
WRITTEN BY PERLE PETIT
15 November 2023
Last month, Hungary’s Prime Minister Viktor Orbán travelled to Beijing to meet with Xi Jinping, indicating that the Hungarian government has little to no plans to follow the EU’s ‘de-risking’ strategy concerning China. The only EU member state to send a delegation to the Third Belt and Road Forum for International Cooperation (18 to 19 October), Orbán’s presence indicates — and indeed is emblematic of — the current dissension in the EU regarding a joint position on its future relations with China.
With China continuing to expand its trade and economic reach via global projects like the Belt and Road Initiative (BRI), Hungary has shown itself as a stalwart ally of Beijing within the EU. Throughout its five-day visit, the Hungarian delegation referred to Hungary as the “meeting point for eastern and western economies and technologies”, demonstrating Budapest’s desire to elevate its relationships with non-democratic and illiberal governments outside of Europe. In line with this message, Orbán and his ministers took the opportunity to conduct bilateral meetings with their high-level counterparts, such as Premier Li Qiang and Foreign Minister Wang Yi, and signed several economic cooperation agreements.
By asserting its autonomy and crafting an alternative narrative about possible relations with China, particularly against the EU’s attempts at creating a unified foreign policy stance, Hungary has positioned itself as a ‘Trojan horse’ for Beijing to embed itself in the EU.
Hungary’s ever-quickening rate of democratic decline has noticeably turned the country away from its regional partners and closer towards autocrats abroad. As a result, looking ahead, we can expect the Sino-Hungarian relationship to continue going from strength to strength — to the detriment of EU cohesion and effective foreign policy on China. However, questions remain as to whether the relationship is driven by coinciding individual autocratic concerns regarding building leverage against the EU, or whether there is a genuine convergence of interests and values between the two states.
EU-China relations: growing complexities due to EU disunity
The 2023 BRI Forum saw lower attendance than in previous years, with Hungary the only EU member state to send representatives. Other EU countries unofficially boycotted the forum — despite Italy, Czechia, and Greece having previously attended the 2017 and 2019 editions of the event.
In spite of important and growing trade interdependence, EU-China relations have steadily deteriorated over the last few years. In a March 2023 speech on EU-China relations, European Commission President Ursula von der Leyen outlined the bloc’s ‘de-risking not decoupling’ approach, setting out the notion of diplomatic and economic ‘de-risking’ as reassessing and readjusting the EU’s industrial, trade, and foreign policies in strategic sectors.
The following week, Von der Leyen travelled to Beijing alongside French President Emmanuel Macron to present the EU’s ‘unified approach’ to EU-China relations. While Macron arrived with a cohort of French CEOs intent on discussing economic and commercial ties, Von der Leyen focused on the ramifications of EU dependencies on China. The trip visibly displayed the fragility of the EU’s supposed alignment, with different messages, motivations, and approaches taken by the institutional and national representatives during interactions with the Chinese leadership.
In the current state of global polycrisis, it is not surprising that the EU is struggling to develop a unified strategy regarding sensitive geopolitical relations. National economic concerns are being weaponised by populist and illiberal governments in EU-level discussions, causing fundamental disagreements about how to proceed on pertinent and pressing global concerns. Not having alignment on joint positions that relate to a common understanding of European rights and values is weakening the EU’s decision-making processes and its outward legitimacy as a cohesive and strong external actor (as seen in the problematic Russian sanctions negotiations, for example).
Clear alignment and support for common policies on key issues, such as the EU’s ‘China policy’, is vital for the European Union’s attempts to remain competitive and exercise global influence. In the absence of a coherent unified position and in the face of the EU’s coordination challenge, Beijing is incentivised to deal more closely with ‘friendly’ member state governments in an individual capacity. This allows governments to prioritise their own foreign policy goals, which in illiberal states such as Hungary revolve around keeping an autocratic political elite in unchecked power, with decreasing rights for the country’s population.
In his formal address at the Third Belt and Road Forum, Orbán dismissed both the ‘de-risking’ and ‘decoupling’ approaches, and in the same breath, spoke of the dangers of ‘isolation’ and ‘blocs’. Following a bilateral meeting with Wang Yi, Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó adopted the same tone, claiming that “severing [high-level cooperation] … would have tragic consequences”. He went as far as to state that Hungary “will resist the pressure from Western Europe to cut back economic cooperation with China”. This demonstrates that the Hungarian leadership is actively attempting to establish polarising narratives to differentiate between what they see as two starkly different ‘camps’ in terms of EU-China relations, with the EU and the US on one side, and Hungary aligning itself with China on the other.
Recent developments in Sino-Hungarian relations
Since Orbán’s government first came to power in 2010, Hungary has increasingly courted Chinese diplomats and investment, engaging in both regional and state-to-state relationship building. Milestones include Hungary’s 2010 ‘Eastern Opening’ foreign policy strategy, which aims to attract more Asian foreign direct investment and loans, as well as to open up new markets in the country, and the launch of the China-Hungary comprehensive strategic partnership of 2017. Currently, China is Hungary’s ninth biggest trading partner, its largest foreign direct investor, and the top investment destination for Chinese companies in Europe east of Germany.
During the recent BRI Forum, Orbán and Xi stressed that the two countries were seeking to further improve their ‘synergies’ across areas such as the Budapest-Belgrade Railway, cross-border e-commerce, agricultural product imports, information technology and new energy industries, and intercultural exchange. However, many of the existing Sino-Hungarian projects have proved controversial, some demonstrating significant shortcuts in terms of public procurement criteria, investment screening, impact assessment, fair practices, and transparency.
Of particular note is Orbán’s plan to use Beijing’s help to turn the country into the leading European powerhouse for electric vehicle battery production, via ‘gigafactories’ built in the Hungarian countryside by Chinese manufacturers. These plans are being put into place regardless of concerns about conserving rather than revitalising (i.e., investing in education, R&D, and digital technology) the Hungarian rural economy, and possible ecological and health hazards stemming from factories.
Supporting kleptocratic practices in the EU
With rising nativistic policies, flagrant disregard for the rule of law, the destruction of competitive pluralism, and Orbán’s Fidesz party’s increasing stranglehold over all democratic institutions since it came to power in 2010, the EU institutions have attempted to push Hungary to return to more democratic ideals through the use of budgetary tools to freeze funding (currently, almost EUR 22 billion in EU funds remain frozen). As a result, the Hungarian government has become interested in allying itself with other non-democracies around the world, and ‘no-strings-attached’ Chinese investment has become an increasingly attractive alternative for Orbán.
Due to both Hungary and China employing little scrutiny when it comes to public procurement, the kleptocratic practices currently in place in Budapest can continue to be sustained. Although Orbán has successfully consolidated power in the country, increased low-scrutiny investment from Beijing will serve to bolster his hold on power, exacerbating further state capture by political elites. For the Chinese leadership, this situation presents an economic and strategic opportunity in the form of Hungary’s lax procurement standards meaning easy access to the EU market, bypassing stricter EU regulations in place in other member states.
Furthermore, the relationship provides an avenue for using political leverage, which can benefit both leaders. Orbán can leverage the country’s position during negotiations with the EU, as he has effectively done in the past, such as by hindering, delaying, or shutting down EU initiatives that require unanimity in the European Council (for example, the blocking of an EU statement criticising China’s new security law and ‘crackdown on democracy’ in Hong Kong in 2021). This intertwining of interests is already seen to benefit China and has disrupted the possibility for the EU to maintain a coherent foreign policy stance regarding statements, sanctions, and actions against the country.
Consolidating Beijing’s EU presence
While more concrete endeavours like Hungary’s ‘Eastern Opening’ strategy are bearing comparatively few fruit, it is the narrative-building behaviour of both states that really holds significance in the evolving and deepening Sino-Hungarian relationship. By asserting its autonomy and crafting an alternative narrative about possible relations with China, particularly against the EU’s attempts at creating a unified foreign policy stance, Hungary has positioned itself as a ‘Trojan horse’ for Beijing to embed itself in the EU. This strategic manoeuvring will allow China to consolidate its presence in Hungary and, by taking advantage of its divide-and-conquer approach in the EU, expand its influence within the region.
Looking ahead, we are likely to see even more highly publicised cooperation between the two countries — seemingly confirmed by Xi during the recent forum, when he stated that the upcoming 75th anniversary of diplomatic relations will be “an opportunity to elevate the China-Hungary comprehensive strategic partnership to a new level”.
However, as the relationship deepens, moving from more symbolic expressions of cooperation to the conclusion of tangible projects, it becomes increasingly apparent that this closeness will further strain Hungary’s relationship with the EU, marking its continued drift away from the Union’s core values and principles. Combined with the EU’s reluctance to effectively act on Hungary’s democratic decline, this will confer more importance and weight on the Sino-Hungarian relationship, undercutting that of the EU and China.
We can expect that Hungary will seek to continue exploiting its bargaining power within the EU regarding the bloc’s ‘China policy’, which in turn could encourage other illiberalising member states to follow suit and enable further influence building by Beijing. Such an increased foothold within Europe would diminish the EU’s global power projection and promotion of democratic norms, decrease its outward foreign policy effectiveness and legitimacy, and push Brussels further away from relevance on the international stage.
Aside from the impact that economic pressure from China could have on the EU (despite the EU’s imminent Anti-Coercion Instrument), the symbolism of increased partnerships and overt cooperation-seeking engagement between Xi’s regime and individual EU member state governments will impact broader geopolitical dynamics, pushing the global power balance increasingly in favour of China.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Perle Petit is a Brussels-based researcher, whose research interests cover elections and autocrats/autocratising states in the EU and the Indo-Pacific, as well as the connections between autocratic leaders across the world. She is an assistant editor at 9DASHLINE. Image credit: Flickr/Gatis Rozenfelds, Valsts kanceleja.