Chinese President Xi Jinping is embarking on a significant five-day tour of Europe, focusing on Hungary and Serbia, two countries in Eastern Europe that have become key players in China's economic expansion in the region. These nations, led by autocratic leaders Viktor Orbán and Aleksandar Vucic, have fostered close ties with China and Russia, positioning themselves as China-friendly allies.
Hungary, as the first EU country to engage in China's Belt and Road Initiative, has welcomed substantial Chinese investments in various sectors, straddling a delicate balance between EU membership and economic cooperation with non-democratic regimes. This strategic move has allowed China to establish a foothold within the EU, avoiding potential tariffs on imports like electric vehicles.
Notably, Hungary has attracted major Chinese investments, including the establishment of an electric vehicle production factory by China's BYD, signaling a shift in the European auto industry. Similarly, Serbia has seen significant Chinese involvement in its economy, with infrastructure projects and investments in mining and manufacturing.
The collaboration between Hungary and Serbia with China extends to joint projects like the modernization of the Budapest-Belgrade railway, part of China's Belt and Road plan to enhance connectivity in the region. Chinese loans have played a crucial role in financing these initiatives, with Hungary and Serbia receiving substantial funding compared to other Central and Eastern European countries.
Both countries have created favorable environments for Chinese investment, offering incentives and support to Chinese companies. Hungary's ambitious EV battery plant project with CATL aims to position the country as a global hub for battery manufacturing, aligning with the global shift towards electric vehicles.
China's increased involvement in Hungary and Serbia comes at a time when these countries are facing economic challenges, including EU funding freezes and inflation. The Chinese investments are seen as a vital alternative source of capital to support economic growth in the absence of EU funds.
Leaders like Orbán have emphasized the importance of Chinese investment in the face of perceived Western economic decline, highlighting a shift towards mutually beneficial economic partnerships free from ideological constraints. Xi's visit underscores the deepening economic ties between China and these Eastern European nations, shaping the region's economic landscape for years to come.
