As Hungary prepares to take over the EU presidency in July, China is deepening its ties, aiming to leverage Hungary as a gateway into the European market. Foreign Minister Wang Yi, who met his Hungarian counterpart in Beijing last month, expressed hope that Hungary would be successful in encouraging the European Union to adopt a more active and pragmatic policy toward China and build a positive outlook for mutually beneficial cooperation.
Describing Hungary as an independent European country with unique influence that has long taken a friendly policy toward China, Wang said his country was hopeful of Budapest pushing the EU to view China’s development in a rational and friendly way and help strengthen strategic communication between China and the EU.
Wang’s remarks have given enough reasons for the global community and experts to suspect China’s real intention in taking an interest in Hungary taking over the EU presidency. Experts fear that China would try to influence Hungary to shift the EU’s mindset about it.
Levente Horvath, director of the Eurasia Center at John von Neumann University, believed that Hungary could help shift the EU’s mindset about “de-risking” from China. He argued that cooperation, rather than decoupling, was the best approach for the future.
However, this Sino-Budapest partnership was not without controversy and skepticism from EU leaders and critics alike. One prominent Chinese project in Hungary was the Budapest-Belgrade railway, financed through a Chinese loan and arguably the BRI’s most important project in Europe. The rail project linking the capitals of Hungary and Serbia has widely been criticized for its lack of transparency, the risk of corruption, and the potential for a debt trap, although the latter has been debunked as being unsubstantiated due to limited evidence. Once completed, the railway would only serve for cargo transportation and help bring Chinese goods from the Port of Piraeus in Greece to Central Europe. Thus, it would be of limited value to the EU and Hungary itself.
Lack of Transparency and Allegations of Corruption
The Budapest-Belgrade railway project was aimed to reduce the journey time by nearly half the time of eight hours between the capitals of Hungary and Serbia. Unfortunately, the refurbishment of this outdated railway line was financed by a 20-year, 1.855-billion-USD loan from the Export-Import Bank of China, making it the single most expensive rail investment in Hungary’s history. However, the feasibility study and the contract for the project have been classified for 10 years by the Hungarian Government. This lack of transparency meant that the public has no access to information regarding the potential benefits and disadvantages of the project, such as its impacts on employment, the local community, and the environment. Furthermore, the Hungarian partner in the joint venture contracted to build the railway was essentially controlled by Prime Minister Viktor Orbán’s childhood friend, leading to accusations of cronyism.
China’s influence in Hungary was not just limited to the railway project. In 2020, a plan to build a maiden campus of the prestigious Shanghai Fudan University in Budapest was leaked. The plan had sparked outrage among residents of Budapest due to the costs associated with the project and the planned location for the campus, as affordable student housing could have been built there instead. Some, most notably Budapest’s mayor GergelyKarácsony, also emphasized fears over potential attempts of influence-seeking activities in Europe.
In one of the letters to Magyar Hang, opposition leader and a conservative who was once a well-connected figure in the Fidesz party of Prime Minister Viktor Orban, by the US embassy showed that Beijing used academic institutions to undermine intellectual freedom and further its influence. For Beijing, Budapest was a politically safe environment where it would face little scrutiny, given Budapest’s China-friendly stance in the EU.
With the entry of Magyar, who officially launched his political career at the end of February, literally challenging Prime Minister Orban, he fielded his candidates for the European elections on June 9. According to a report in the New York Times, Orban has won four general elections in a row for 14 years, refashioning Hungary into an “illiberal democracy” often more in tune with China and Russia than with its nominal allies in NATO and the European Union. Now, for the first time in years, the country has been swept by a sense that change, though not imminent, is possible.
Geopolitical Implications
China’s deepening ties with Hungary can have broader geopolitical implications. As China sought to establish itself as a dominant power in the emerging multipolar world order, its relationship with Hungary could serve as a model for its interactions with other European countries. Hungary’s position in the “peace camp,” along with Russia and Iran, underscored its strategic alignment with China’s vision of international relations based on mutual respect and peaceful cooperation.
However, this alignment has raised concerns among EU officials, who were wary of China’s growing influence in Europe. The European Commission has launched investigations into Chinese state subsidies for manufacturing electric vehicles and solar panels, accusing China of distorting market competition. These investigations reflected a broader apprehension within the EU about China’s economic aspirations.