By hosting Xi Jinping on the last leg of the Chinese leader’s European tour, Hungarian Prime Minister Viktor Orban will get a chance to tighten bonds between Beijing and its closest ally in the EU.
Xi began his trip earlier this week in France, a visit that was cordial but also highlighted tensions between Beijing and the EU over the war in Ukraine and global trade.
After visiting Serbia, a non-EU partner, Xi will arrive in Budapest on Wednesday evening to cap his first European trip since 2019.
Xi can expect a warm welcome when he holds talks with Orban, who has bucked the European Union’s official position to “derisk” relations with China.
“It is clearly a visit of historic significance,” said Hungarian Foreign Minister Peter Szijjarto, noting that it was the first visit by a Chinese president in 20 years.
Orban has been championing an “Eastern opening” foreign policy since his return to power in 2010, seeking closer economic ties to China, Russia and other Asian countries.
The nationalist premier remained committed to his strategy even as tensions between Western nations and Beijing increased over human rights violations, the Covid pandemic, trade and Russia’s invasion of Ukraine.
In recent years, the Central European country of 9.6 million people has attracted a flood of major Chinese projects, mostly related to battery and electric vehicle (EV) manufacturing.
Hungary has become “more valuable for Beijing both economically and politically”, said Tamas Matura, an associate professor at Corvinus University.
It is the EU’s “last explicitly and openly pro-China government”, Matura added.
Looking to the East
Last October, Orban was the sole EU leader to attend a summit for Xi’s flagship Belt and Road Initiative (BRI) in Beijing.
During the conference, Orban said Hungary was one of the “proponents of connectivity, (who) reject the policy which promotes blocs” amid “talk of decoupling and derisking”.
“The relationship with Hungary is stable and reliable,” Yan Xuetong, director of the Institute of International Studies at Tsinghua University, told AFP during a visit to Budapest.
“Chinese companies feel safe investing in the country, expecting their business won’t be disturbed by unpleasant political developments,” he added.
Since Hungary began to promote itself as a global hub for EV manufacturing in 2022, several new Chinese businesses have sprung up all over the country.
Battery manufacturer CATL is building its second European factory near the eastern city of Debrecen, while Chinese carmaker BYD is due to manufacture passenger cars in southern Szeged as early as next year.
According to the Hungarian government, around 15 billion euros’ worth of ongoing projects originate from the Asian country.
In return, Chinese companies benefit from tax breaks, a favourable regulatory environment and generous infrastructure subsidies.
Raising concerns
In 2015, Hungary became the first European country to join the BRI, a controversial project to revive the Silk Road through global transport networks and infrastructure funded via Chinese loans.
A high-speed railway project to connect Budapest and Belgrade is behind schedule.
Bilateral cooperation has flourished in other areas, with Budapest purchasing Chinese vaccines during the pandemic and promising to host the first Chinese university campus in the EU.
It recently also signed a security pact authorising Chinese police officers to patrol in Hungary alongside local authorities.
While the government says Hungary is benefiting from its partnership with China, opposition parties have raised concerns over a lack of transparency, the environmental impact of battery factories and corruption.
“We are giving huge discounts for these projects, which place a huge financial burden on taxpayers… but only Orban’s inner circle is getting richer,” said Sandor Ronai of the left-wing Democratic Coalition.
Moreover, China has repeatedly relied on Budapest “to block or significantly water down some EU decisions, which were concerning to them”, said expert Matej Simalcik.
“The same logic could also apply to decision-making within NATO,” he told AFP.
A NATO member since 1999, Hungary has set itself apart from other allies by calling for an immediate ceasefire in the Ukraine war and denouncing what it called “war fever”.
Szijjarto, Hungary’s foreign minister, said both countries are in “absolute agreement” over their approach to bring “peace” to the conflict.
