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Current Situation
Hungary has been working hard to strengthen its relations with China, positioning itself as the Asia-friendly capital of Central Europe. This relationship is based on high-level mutual visits and economic transactions.
Economic Cooperation
China has been a frequent economic partner of Hungary. The most important of these is the Belt and Road Initiative (BRI), specifically, Hungary was the first European country to sign a memorandum of understanding with China on the BRI in 2015. In 2023, Hungary’s trade with China was $11.4 billion, well above the previous annual average. Europe’s flagship Belt and Road project aims to improve connectivity between Central Europe and the Balkans with significant Chinese investment, while another large project that also sees Hungary’s strong participation is the construction of the Budapest-Belgrade railway.
Political and Diplomatic Relations
Hungary’s political ties with China have greatly strengthened and are closer than in the past. Chinese President Xi Jinping regularly meets with Hungarian Prime Minister Viktor Orban. Hungary also tends to be pro-China in its foreign policy – it not only sides with China in many international forums, but also opposes measures against Beijing when the EU is criticized.
Education and cultural exchange
Education and cultural exchange are very important in Sino-Hungarian relations. The Sino-Hungarian bilingual school established in Budapest in 2019 is another example of the deepening educational partnership. During cultural events held in both countries – including the celebration of the Chinese New Year and the Hungarian Cultural Festival held in China – people have a better understanding and goodwill towards each other.
Science and technology cooperation
Science and technology cooperation is another important avenue. Huawei said that in support of this ambition, it has further strengthened its foothold in Europe by expanding the European Supply Center (ESC) facilities in Hungary. Hungarian universities have also launched joint research with Chinese technology companies in renewable energy and artificial intelligence.
Challenges and controversies
Although the relationship is generally on an upward trend, it also faces some major obstacles. Critics in Hungary and the European Union say that Hungary’s logical proximity to China also undermines its adherence to European values and attitudes. Human rights and transparency of Chinese investments remain major points of contention.
Strategic Cooperation Analysis
Hungary’s growing tilt towards China illustrates a different story, which is Budapest’s interest in increasing its economic and political influence in the Central European region. Over time, the economic and diplomatic cooperation between Hungary and China has developed into a multidimensional partnership based on significant investments and mutual support in international forums.
Economic Investments and Trade
This is one of the reasons why China has become such an important investor in Hungary. The Belt and Road Initiative (BRI) underpins this economic partnership. The Budapest-Belgrade railway is a flagship project to open up intra-European trade routes, and like other large infrastructure projects, it is funded by Chinese loans. The report states that bilateral trade soared to $11.4 billion in 2023, compared to other years, and was more prominent in previous years. The economic and strategic significance of the Hungarian skyline complements China’s growing influence on the country, as exemplified by Chinese companies such as Huawei setting up large operations in Hungary – especially Huawei expanding its European supply center in 2022 – which fully illustrates Hungary’s importance in China’s European strategy.
Political alliance and embassy assistance
Hungarian Prime Minister Viktor Orbán’s frequent visits to Beijing highlight the close political ties between the two countries – which often helps to ensure Hungary’s interest in Chinese investment. Hungary has shown its willingness to support China in international organizations such as the United Nations. Hungary blocked a 2021 EU statement criticizing Beijing’s policies on Hong Kong – underscoring its diplomatic support for China. This is in line with Hungary’s larger goal of using its friendship with China as part of a strategy to counter EU pressure.
Academic Cooperation and Cultural Exchange
Educational exchanges are increasing, with the opening of a Sino-Hungarian bilingual school in Budapest in 2019. The school not only promotes the development of Chinese language and culture, but also deepens friendships between young people. Students and scholars are awarded scholarships, and many Hungarian students study at Chinese universities. Initiatives such as the Chinese New Year and Hungarian Cultural Festival hosted by China promote exchanges between the two peoples.
Technological Partnerships
Huawei’s investment in Hungary provides a ready-made case. It is one of the manifestations of technological synergy between Hungary and China, as can be seen in the contract to establish Huawei’s European Supply Center in Hungary starting in 2022. Hungarian universities and Chinese technology companies are also involved in joint research projects, such as renewable energy and artificial intelligence.
Geopolitical impact and challenges
The Hungarian-Chinese strategic partnership has developed to this point with some controversy. Critics in Hungary and in the EU community say Budapest’s pro-China stance risks undermining EU cohesion and values. These issues mainly concern human rights and Chinese investment.
International Impact
China’s strategic partnership with Hungary continues to reshape global geopolitics and influence international relations on multiple fronts. In Hungary, where the country’s alignment with China is changing the dynamics of the region and opening new paths, it could have economic and diplomatic opportunities
Implications for EU Policy
Hungary’s track record with China is significant for EU policymaking. Hungary’s willingness to support Beijing, even at the expense of EU solidarity – its 2021 veto of an EU statement condemning China’s actions in Hong Kong (contrary to all other member states) is a prime example. The move sparked a debate in the EU about how Chinese investments can affect member states’ foreign policies. The European Commission noted that Hungary’s pro-China policies could weaken the negotiating power of EU member states.
Trade Dependence and Geopolitical Investments
China’s investments in Hungary are part of a strategy to strengthen economic control and expand political influence in Europe. The Budapest-Belgrade railway, a key component of the Belt and Road Initiative, is a good example. The railway project, funded by Chinese loans, is part of a Silk Road-inspired development project to improve trade corridors between Central and Southeast Europe, thereby strengthening Hungary’s economic ties with China. Hungary has become increasingly dependent on Chinese investment, much of it funded through China’s “New Silk Road” projects in the region, and a 2023 study showed that about half of Hungary’s infrastructure projects are currently funded by Chinese capital.
Bilateral and multilateral
Hungary has also provided more extensive diplomatic support to China than the EU. Hungary has long supported China’s positions at the United Nations, including on human rights and territorial integrity. Hungary has reciprocated this support – including by positioning Hungary as an advocate for key Western audiences in various international forums where China can exert greater influence. The China-Central and Eastern Europe Summit held in Hungary highlighted China as an important bridge between China and the region, and this will also be the case in 2022
Security and defense impact
China-Hungary relations, regional security level Concerns within NATO about the security risks that Hungary’s use of Chinese technology, including Huawei’s 5G infrastructure, could pose. The United States had expressed concerns about Hungary’s use of Chinese technology in 2021, citing the risk of espionage it could pose.
Impact on regional countries
China, Hungary’s neighbors are watching the region closely, exposing divisions between their own countries, with Poland and the Czech Republic reluctant to let Hungary’s pro-China policies weaken regional unity. In 2023, Poland announced that it would conduct stricter scrutiny of Chinese investments in response to Hungary’s increasingly close economic relations with China.
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