Hungary is the most pro-China country in Europe and its prime minister is hoping his personal and ideological links with the US administration will override their diverging attitudes to Beijing.
The early days of the new administration were promising for Budapest. Orbán cherished the closure of USAID and applauded President Trump after he clashed with Volodymyr Zelenskyy in the Oval Office. US pressure on Hungary, over its domestic politics and close ties with Russia, also looks set to ease off.
But it is unclear how Washington will address Orbán’s strong links with China. Over the past decade, Hungary has become a bridgehead for the Chinese presence and influence in Europe and has carved a niche as a testing ground for Chinese efforts to enter the European Union (EU) market.
These have included infrastructure (the Belgrade-Budapest rail link), electric cars and batteries (the CATL and BYD factories), and telecommunications (a 5G network). Politically, Hungary has also become Beijing’s key advocate in Brussels, vetoing EU positions criticizing China on six occasions in recent years.
While Budapest’s limited political clout means it could not completely stop the EU’s de-risking approach to China or block increased tariffs on Chinese electric vehicles, Beijing has benefited from EU disunity and Orbán had been one of its key proxies.
For example, Hungary has disregarded security concerns and shrugged off US warnings, including during Trump’s first term, over telecoms giant Huawei and its relationship with China’s intelligence services. Budapest also permitted Chinese police officers to patrol the streets in Hungary and let thousands of Chinese citizens obtain residence permits without proper security checks.
While most EU member states distanced themselves from China after its support for Russia’s full-scale invasion of Ukraine in 2022, Orbán intensified relations. He was the only leader of an EU country to attend the 2023 Belt and Road Forum in Beijing (others refused due to Vladimir Putin’s presence).
Then, when Orbán hosted Chinese President Xi Jinping in Budapest a year later, both parties signed an “All-Weather Comprehensive Strategic Partnership for the New Era” — similar to agreements Beijing had already signed with Belarus, Venezuela and Pakistan.
By rewarding the prime minister, China wants to show other countries, especially in Central and Eastern Europe, that aligning with Beijing pays off. Some, such as Slovakia, have already followed suit.
Not all partnership initiatives have worked, however. Plans for a Chinese Fudan University campus in Budapest did not take off due to widespread protests, attempts to attract cargo shipments from China through a new rail terminal on the border with Ukraine failed because of Russia’s invasion, and the Hungarian section of the Chinese-backed Belgrade-Budapest rail link is already eight years behind schedule, with the Serbian section suffering a further setback after a station canopy collapsed and killed 15 people in November.
Relations with China have become even more vital to Orbán as a result of his fragile domestic situation. He is expected to face a strong competitor for the first time in two decades in elections next Spring and, even if the playing field is skewed in favor of his Fidesz party, popular discontent is rising.
Economic growth has been sluggish and inflation rising (5.6% in February), at a time when his government has limited fiscal room due to a high budget deficit. Approximately €20bn ($22bn) in EU funds have also been frozen due to rule of law concerns.
Orbán will seek to demonstrate to the public that there are prospects for a brighter future and will be relying on his friends in Beijing to help. The inauguration of a new railway, and electric vehicle or battery plants built by Chinese companies, are likely to be important elements of his electoral campaign.
Any financial support, such as Beijing’s €1bn loan in Spring 2024, will also provide relief, even if it cannot fully make up for the loss of EU funds. At the same time, cooperation with China will be necessary to maintain the flow of contracts to Fidesz oligarchs.
Budapest can be expected to continue holding back the rest of Europe’s desire for a more assertive stance towards China, thus exacerbating the rift between Brussels and Washington, and it will seek to prolong its strategic balancing for as long as possible. Even so, there are clear risks that the Orbán government will one day be forced to choose between its friends.
Andrzej Sadecki is Head of the Central European Department at the Centre for Eastern Studies (OSW) in Warsaw
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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