Hungary and Serbia's autocratic leaders to roll out red carpet for China's Xi during Europe tour (2024)

BUDAPEST – Chinese leader Xi Jinping will spend the bulk of his five-day tour in Europe this week in two small countries at the continent’s eastern half, a region that Beijing has used as a foothold for its expanding economic ambitions in Europe.

Following a stop in Paris on Monday to kick off his first European trip in five years, Xi will then travel to Hungary and Serbia, two nations with autocratic leaders that are seen as China-friendly and close to Russian President Vladimir Putin.

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As mainstream European leaders have pursued more protectionist policies to limit Beijing and Moscow’s reach on the continent, the governments of nationalist conservative leaders Viktor Orbán of Hungary and Aleksandar Vučić of Serbia have vigorously courted economic ties with China, inviting major investments in infrastructure, manufacturing, energy and technology.

As the first European Union country to participate in Xi’s signature Belt and Road Initiative, Hungary has straddled a middle ground between its membership in the EU and NATO, and an unusual openness to diplomatic and trade relationships with eastern autocracies.

Tamás Matura, a China expert and associate professor at Corvinus University in Budapest, said that Hungary’s hosting of major Chinese investments and production sites — and its agnosticism on doing business with countries with spotty democratic and human rights records — has opened a crucial door to China within the EU trading bloc.

“The Hungarian government is the last true friend of China in the whole EU,” Matura said. “It is very important now to the Chinese to settle down in a country that is within the boundaries of the EU ... and is friendly to the Chinese political system.”

One of the major benefits to China of establishing bases within the EU: avoiding costly tariffs. The European Commission, the bloc's executive arm, is mulling raising duties on the import of Chinese electric vehicles (EVs) from its current 10% to protect the European auto manufacturing market — a mainstay for Germany, the 27-member EU's largest economy.

Yet in December, Hungary announced that one of the world’s largest EV manufacturers, China’s BYD, will open its first European EV production factory in the south of the country — an inroad into the EU that could upend the competitiveness of the continent’s auto industry.

That shift is already visible in Budapest, where one car dealership has begun scaling down its supply of European vehicles and instead introducing models produced by BYD.

Márk Schiller, the strategy and marketing director for the family-owned Schiller Auto Group, said he believes that European carmakers are “already behind” China in transitioning to EV production. His company recently stopped selling cars made by German carmaker Opel, and switched to BYD.

“This was a huge shift,” Schiller said.

Unconfirmed reports suggest that during Xi’s visit to Hungary from Wednesday to Friday, he and Orbán will announce another EV manufacturing investment involving China’s Great Wall Motor. Orbán's office didn't respond to multiple requests for information on the schedule of the visit.

In Serbia, to Hungary's south, China runs mines and factories across the Balkan country, while billions more in infrastructure loans have funded roads, bridges and new facilities.

Hungary and Serbia have an agreement with Beijing to modernize the railway between the countries’ capitals of Budapest and Belgrade, part of a Belt and Road plan to connect with the Chinese-controlled port of Piraeus in Greece as an entry point for Chinese goods to Central and Eastern Europe.

The bulk of the project, which after numerous delays is expected to be completed in 2026, is financed through loans from Chinese banks — the kind of capital that Hungary and Serbia have been eager to utilize.

According to the AidData research lab at William & Mary, a public university in Virginia, Chinese lenders have issued loans worth more than $22 billion to nine countries in Central and Eastern Europe between 2000 and 2021.

Of that sum, $9.4 billion has gone to Hungary and $5.7 billion to Serbia, dwarfing the totals of other regional countries.

Vučić has said he is “honored” that Xi — whom he often describes as a “friend” — is visiting on Tuesday. He said before the visit that Serbia would seek further Chinese investment, particularly when it comes to advanced technologies.

But economic analyst Mijat Lakićević said he didn't expect any major new investment deals, because “everything that Serbia does with China has already been agreed.”

Hungary, too, has created a favorable investment environment for China, providing generous tax breaks, subsidies and infrastructural assistance to Chinese companies, as well as helping them navigate Hungarian bureaucracy.

“They get the red carpets rolled out and they get everything tailor-made by the government. And that is a huge advantage,” said Matura, the China analyst.

Near Debrecen, Hungary’s second-largest city, construction is underway of a nearly 550-acre (222-hectare), 7.3 billion euro ($7.9 billion) EV battery plant, Hungary’s largest-ever foreign direct investment.

Orbán’s government hopes the factory, run by Chinese battery giant CATL, will make the country a global hub of lithium-ion battery manufacturing in an era where governments are increasingly seeking to limit greenhouse gas emissions by switching to electric cars.

Such investments are coming at a time when Hungary's sluggish economy has been further hindered by record-setting inflation and the freezing of billions in EU funding that has been withheld over Orbán's track record on democracy standards and the rule of law.

With EU money at a standstill, Matura said, China has been willing to fill in the gaps in Hungary's budget.

"EU funds have almost came to full stop flowing into the Hungarian economy, so now there is a desperate need in Hungary to turn towards other alternatives, other sources of financial capital,” he said.

Orbán has been open about why he has prioritized Chinese investment: his belief that Western economies are declining, and that China is on the rise.

During a recent speech at the CPAC Hungary conservative conference, Orbán outlined a vision of a "global economy that will be organized according to the principle of mutual benefit, free of ideology.”

___

Jovana Gec reported from Belgrade, Serbia.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Hungary and Serbia's autocratic leaders to roll out red carpet for China's Xi during Europe tour (2024)

FAQs

What happened to Xi Jinping? ›

In October 2022, Xi secured a third term as CCP General Secretary, and was reelected state president for a third term in March 2023.

Who is the leader of China? ›

President of the People's Republic of China
Incumbent Xi Jinping since 14 March 2013
Office of the President of the People's Republic of China
StyleMr President (主席) (informal) His Excellency (阁下) (diplomatic)
TypeCeremonial presidency
17 more rows

Who is China's prime minister now? ›

The incumbent premier is Li Qiang, who took office on 11 March 2023, succeeding Li Keqiang.

What countries has Xi Jinping been to? ›

Chinese President Xi Jinping has concluded a five-day tour of Europe, after visiting France, Serbia and Hungary, where he touted Beijing's vision of a multipolar world and held talks on trade, investments and Russia's war in Ukraine.

Is China a dictatorship or democracy? ›

China is not a liberal or representative democracy. The Chinese Communist Party (CCP) and the Chinese government state that China is a socialist democracy and a people's democratic dictatorship. Under Xi Jinping, China is also termed a whole-process people's democracy.

What language can Xi Jinping speak? ›

Is China a communist? ›

The Chinese Communist Party (CCP), officially the Communist Party of China (CPC), is the founding and sole ruling party of the People's Republic of China (PRC).

Why is the Chinese flag red? ›

The red color of the flag symbolizes revolution; the stars take on the yellow color in order to bring out their brightness on the red ground. The larger star represents the CPC, while the four smaller ones, the Chinese people.

Why is China so economically powerful? ›

China has the first or second-largest economy in the world depending on whether you're looking at PPP or GDP, respectively. Industrial production and manufacturing exports are major forces driving the economy. However, perhaps significantly, the country is not nearly as developed as other countries in the top 10.

Who is in power in China right now? ›

The current president is Xi Jinping, who took office in March 2013. The office was first established in the Constitution of the People's Republic of China in 1954 and successively held by Mao Zedong and Liu Shaoqi. Liu fell into political disgrace during the Cultural Revolution, after which the office became vacant.

Is China a democratic country? ›

The Chinese constitution describes China's system of government as a people's democratic dictatorship. The CCP has also used other terms to officially describe China's system of government including "socialist consultative democracy", and whole-process people's democracy.

What are the levels of government in China? ›

Each of the levels (except "special administrative regions") corresponds to a level in the Civil Service of the People's Republic of China.
  • Summary.
  • Table.
  • Provincial level (1st)
  • Prefectural level (2nd)
  • County level (3rd)
  • Township level (4th)
  • Basic level autonomy (5th)
  • Special cases.

What is the relationship between the US and China? ›

They have significant economic ties and are significantly intertwined, yet they also have a global hegemonic great power rivalry. As of 2023, China and the United States are the world's second-largest and largest economies by nominal GDP, as well as the largest and second-largest economies by GDP (PPP) respectively.

What is China's foreign policy under Xi Jinping? ›

In setting foreign policy, Xi favors an approach of baseline thinking, in which China explicitly states red line that other countries must not cross. In the Chinese perspective, taking tough positions on these matters reduces strategic uncertainty.

What was the third plenum in China? ›

The 3rd Plenary Session of the 11th Central Committee of the Chinese Communist Party was a pivotal meeting of the Central Committee of the Chinese Communist Party held in Beijing, China, from December 18 to December 22, 1978.

How long is the Great Wall of China? ›

The total length of all sections of the Great Wall of China ever built adds up to about 21,196 kilometers (13,171 miles), including overlapping sections that were rebuilt. The wall constructed during the Ming dynasty, the most well-preserved section, is about 8,850 kilometers (5,499 miles) long.

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