Xi’s European tour exposed the EU’s persisting divisions

Hungary opposes a tougher EU stance on China, but it is not the only one.

Dimitar Bechev

Visiting Scholar at Carnegie Europe

Published On 13 May 202413 May 2024Hungarian Prime Minister Viktor Orban and Chinese President Xi Jinping talk after a lunch in a restaurant in Budapest, Hungary on May 10, 2024 [Handout from PM Office via Reuters/Vivien Cher Benko]

“In May, when the fragrance of flowers and grass on the Great Hungarian Plain fills the air, I will pay a state visit to Hungary at the invitation of President Tamas Sulyok and Prime Minister Viktor Orban.” This was Chinese leader Xi Jinping waxing lyrical in an official statement about his landmark trip to Budapest on May 9, part of a tour that also included France and Serbia.

As the rest of the European Union was marking “Europe Day”, honouring the 1950 Schuman Declaration kick-starting the European integration project, Orban praised Xi’s China as “one of the pillars of the new world order”.

Xi’s visit to Hungary saw the announcement of a two-billion-euro ($2.1bn) railway project, adding to a growing number of large industrial projects funded by China. In December, top Chinese carmarker, BYD, announced it will build a factory for the production of electrical vehicles (EVs), while CATL, another Chinese firm, has undertaken a 7.3-billion-euro ($7.86bn) project for a battery plant.

China is the biggest foreign investor in Hungary, having poured some 16 billion euros ($17bn) into various projects.

It was the Chinese leader’s second trip to the country that many perceive as China’s Trojan horse within the EU. Orban did little to dispel such views. He basked in the glory of the special relationship with Beijing.

While the Hungarian government cosies up to Beijing, Europeans, by and large, perceive China as posing major strategic challenges. Whether it is the war in Ukraine, the nuclear arms race, international efforts to fight climate change or concerns about unfair trade practices, policymakers and strategic thinkers in Brussels and key member states are keeping a wary eye on Beijing’s role in world affairs.

“We must behave respectfully towards China in terms of trade,” French President Emmanuel Macron said in a recent interview with The Economist magazine, “but in a way that defends our interests, is reciprocal and promotes national security.”

Europe wants China to be a partner but also is aware of the risks of too much economic dependency, especially in emergent sectors such as green technology where the Chinese have an edge. Last October, the European Commission launched a probe into Chinese-manufactured EVs sold on the EU market benefitting unfairly from Chinese state subsidies.

The shift to a more defensive posture reflects a mood change in some parts of the EU. Even those sceptical of Macron’s views in favour of “strategic autonomy” recognise that the Union should be protected from external threats and risks and among them is China.

In the good old days, when the EU rode the wave of globalisation and pioneered open markets and the free flow of capital, it was easier to think of relations with Beijing as a win-win. It was all about economic efficiency.

Yet the tune changed in the 2010s as the West reeled from the global financial crisis and China became more assertive across many parts of the world, Europe included. The EU’s trade deficit with China more than tripled to nearly 400 billion euros ($430bn) between 2013 and 2022. The COVID-19 pandemic and the disruption of worldwide supply chains along with Russia’s all-out invasion of Ukraine cementing an historic rapprochement between Moscow and Beijing, dealt a final deadly blow to the bullish vision of China-EU ties. Currently, the EU characterises Beijing as “partner for cooperation, an economic competitor and a systemic rival”.

Last year, the European Commission’s President Ursula von der Leyen called for “de-risking” from China. Reflective of the new mood, the first leg of Xi’s European trip included talks with Macron and von der Leyen on the continuing trade disputes and China’s policy on Ukraine. However, little progress was achieved.

The problem is that de-risking is not universally embraced across the EU. Hungary is perhaps the most flagrant example, but far from the only one. It is obvious that Germany has not fully signed up for a new, tougher approach either. To be fair, during his visit to Beijing in mid-April, German Chancellor Olaf Scholz sang from the same hymn sheet as Macron. In relation to Ukraine, Scholz appealed to the Chinese to “make it clear that this senseless imperialist war must end”.

The chancellor has made tough statements on China’s disruptive trade practices, too. Yet extensive trading links and the presence of big German business on the Chinese market, notably carmakers such as Volkswagen, push government policy towards engagement. Furthermore, Scholz could have come to Paris in a show of unity with Macron and von der Leyen. Yet he did not.

The hardliner stance of the EU’s closest ally, the United States, is also a factor. There is a bipartisan consensus in Washington that China is a top geopolitical adversary. Most EU countries – France and Germany certainly – would rather remain neutral in this fight. Visiting China last year, Macron warned of the danger of “getting caught up in crises that are not ours”.

Many in the EU are fearful of the impact of the economic and technological competition between the US and China, with both dishing out billions in subsidies to support their economies and thus eroding the global position of European industries. Yet the achievement of strategic autonomy remains a tall order, not least because of the dependence on American military power to protect Europe. There is no easy recipe for how to navigate the China-US rivalry.

Xi’s European tour highlights tensions, but also the desire of leading EU powers to maintain a productive relationship with Beijing. However, it appears that currently, China has more cards to play than Europe does.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.