Hungarian Prime Minister Viktor Orban and Chinese President Xi Jinping hold a joint press conference at the Carmelite Monastery in Budapest, Hungary, May 9, 2024.
Credit: Reuters Photo
Xi Jinping, the Chinese president, has completed his first European tour in five years, visiting France, Serbia, and Hungary. During the visit, he signed many agreements with each country. He also held a trilateral meeting in Paris in which French President Macron and European Commission President Ursula von der Leyen participated. Three weeks ago, German Chancellor Olaf Scholz was in China, where economic issues were high on the agenda.
Europe and China have had deep engagement over the past two decades. In 2019, the European Union (EU) defined China as a co-operative partner, economic competitor, and systemic rival. The global landscape has seen substantial shifts since then. The Covid-19 pandemic, increased Chinese assertiveness in the region, and tensions between the United States and China were already influencing sentiments in Europe. The Ukraine war has further changed European perceptions about China. Russia has become a major strategic challenge for Europeans, and China’s ‘no limit’ partnership with Russia is a serious concern for Europe.
In the face of increasing trade deficit and worries about economic security, EU leaders have been talking about ‘decoupling’ and ‘de-risking’ measures against China. To improve European economic security, many measures including investment screening and foreign subsidy regulations have been initiated in specific sectors. The Comprehensive Agreement on Investment (CAI) with China signed in 2020 is de facto frozen.
European leaders have also repeatedly urged Xi to leverage his influence with Russia to bring an end to the Ukraine war. With changing geopolitics, the EU and many of its member states have also announced their Indo-Pacific strategies. China perceives such strategies as part of a broader geopolitical design aimed at containing its influence in the region.
Within this context, the visit aimed to stabilise diplomatic relations with Europe by strengthening ties with friendly countries and capitalising on differences among European nations.
These three countries were selected carefully. Despite being a part of the EU and NATO, Macron has emerged as a prominent advocate for European sovereignty and strategic autonomy. While visiting China last year, he asserted that Europe should distance itself from US-China tensions over Taiwan. In 1964, France was the first Western country to recognise the People's Republic of China.
Serbia and Hungary have both emerged as pro-Russia and pro-China voices within Europe. China has signed comprehensive strategic partnerships with both. Both are also actively engaged with the China’s Belt and Road Initiative (BRI). China is building a 350-kilometre high-speed Budapest-Belgrade railway line. Once completed, it will reduce travel time between two capitals from eight hours to three.
Additionally, Hungary is set to assume the rotating EU Council presidency starting in July. Last month, during a meeting in Beijing, Chinese Foreign Minister Wang Yi expressed to the visiting Hungarian Foreign Minister that Budapest would promote a balanced and friendly view of China within the EU.
An officially EU candidate country, Serbia signed 29 agreements with China during the visit and became the first country in Europe to join A Global Community of Shared Future, a grand initiative by China. Xi and Serbian leader Aleksandar Vucic said that they support each other’s sovereignty and territorial integrity. This means China considers Kosovo as part of Serbia and Belgrade views Taiwan to be part of China. In an interview with the China-based CGTN television, the Serbian leader asserted that “Taiwan is China — and it’s up to you what, when and how you’re going to do it. Full stop”.
Xi’s visit also coincided with the 25th anniversary of NATO bombing of the Chinese embassy in Belgrade in 1999, for which later Americans apologised. This provided an opportunity for the Chinese leader who lashed out at the US through a signed article in the Serbian media he said that “the China-Serbia friendship is forged with the blood of our compatriots, will stay in the shared memory of the Chinese and Serbian peoples”.
In October, Serbia also became the first country from Central and Eastern Europe to sign a free trade agreement with China. The nation has garnered substantial Chinese investment through initiatives like the E763 highway, the Zemun-Borca bridge, and the acquisition of the Smederevo Steel Mill by HBIS Group.
Since 2010, Hungarian Prime Minister Viktor Orban has been advocating for an ‘Eastern Opening’ strategy to boost trade and investment with Asia, with a particular focus on China. Last year, China emerged as Hungary’s largest investor with a total investment of €10.7 billion. Hungary is home to Huawei’s largest supply centre outside of China. Notably, China's CATL is constructing a €7.3 billion EV battery plant in Debrecen. Budapest, the capital of Hungary, also hosts the largest Chinese community in Central and Eastern Europe, many of whom arrived during the late 1980s and early 1990s.
Xi’s visit to Europe was strategically timed, with a careful selection of countries involved. He only listened to European concerns in Paris while highlighting the significance of economic partnerships in Belgrade and Budapest.
(Gulshan Sachdeva is Professor at the Centre for European Studies and Coordinator, Jean Monnet Centre of Excellence, Jawaharlal Nehru University. Views are personal.)
(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.)