Xi trip reveals split in Europe on Beijing
Deals with Serbia and Hungary expand China’s footprint in Central Europe
President Xi Jinping left Europe after a tour that revealed the deepening divisions on how different parts of the continent deal with Beijing.
In Serbia and Hungary, Xi upgraded relations with China’s two closest allies in Europe. Belgrade, he said, was “an example for China’s friendly relations with other European countries”.
In Budapest, the capital of the European Union (EU) and Nato member state seen most often as having autocratic leanings, Xi said that “China supports Hungary in playing a bigger role in the EU and promoting greater progress in China-EU relations”.
Hungary’s ties with China were elevated to the level of an “all-weather” comprehensive strategic partnership, on a par only with Belarus, Pakistan and Uzbekistan.
In both Hungary and Serbia, dozens of deals were signed to expand Beijing’s footprint in Central European critical infrastructure.
Eyebrows were raised in Brussels and beyond when Hungarian Prime Minister Viktor Orban signed a nuclear cooperation pact with China that could see Beijing invited into the EU nuclear power network.
Budapest also deepened ties with Huawei Technologies, a company EU authorities have been accused of trying to regulate out of the single market, and China agreed to build a highway border crossing between Hungary and Serbia, two members of Europe’s Schengen zone for freedom of movement.
“In the past few years, we have seen a development in the EU, aiming at pushing out certain foreign entities from critical infrastructure. And it seems that in the case of Hungary, it goes the other way around,” said Tamas Matura, an expert in Sino-Hungarian relations at Corvinus University of Budapest.
Hungary will take the rotating EU presidency in July – a largely decorative role, but one its leaders have vowed to use to promote a different approach to China.
“We will be able to share with our European colleagues in a very credible manner how helpful, how useful and how profitable it can be to work together with China,” Foreign Minister Peter Szijjarto told the Chinese stateowned tabloid Global Times.
Observers noted Serbian President Aleksandar Vucic’s decision to sign a cooperation agreement with China through its Ministry of European Integration, which manages Belgrade’s path to EU membership. As Serbia’s candidacy for joining the EU has stalled, it has grown closer to Beijing and Moscow.
“Serbia clearly perceives the European Union as a cash machine while at the same time [it] wants to build ‘relations above the strategic partnership level’ with China and ‘brotherhood’ with Russia,” said Romana Vlahutin, a former connectivity envoy for the EU and an expert in the politics of the western Balkans.
“For China and Russia, this is an opportunity to install their security, economic and digital infrastructure in the very close proximity of the EU, and project power for free. They do not even have to try hard or invest much.”
EU officials heard a clear message from Xi: maintain good ties with Beijing, and all this investment could be yours. In France, on the other hand, the opposite was true.
Five years ago, when Xi last visited western Europe, he signed Italy onto the Belt and Road Initiative and agreed to a ¤30 billion (HK$252.5 billion) order for 300 Airbus planes in France.
Even a year ago, Xi was filmed calling French President Emmanuel Macron a “bosom friend” as they walked together through gardens in Guangzhou.
In France last week, Xi was given the red carpet treatment, and the pair toasted 60 years of bilateral ties.
But while Xi’s delegation signed 37 agreements with Macron’s government, they were broadly unsubstantial, with none of the big-ticket deals that characterised his past European trips.
Despite the pageantry, insiders said, Macron secured few concrete commitments from Xi on the major agenda items, including Ukraine and trade.
According to people briefed on the talks, Macron spent a long time trying to convince Xi that China’s trade investigators would not find subsidies in France’s cognac sector.
Xi, on the other hand, told Macron and EU Commission President Ursula von der Leyen – who joined for a meeting on Monday – that they were underestimating China’s domestic demand, and that their assertions of overcapacity in Chinese manufacturing were misplaced.
“It seems difficult – if not impossible – to see China making any concessions to reduce the flood of Chinese imports into the EU,” Alicia Garcia Herrero, chief economist for Asia-Pacific at Natixis, wrote in Asia Times.
“On economic security, Xi’s denial of the problem leaves the European Commission no choice but to continue ongoing investigations into EVs and wind turbines. The moment of truth will come when the EU needs to take real action on either of these two fronts and the differences between EU members become unavoidable,” she added.