China pitches road to Hungary as Beijing’s links with Moscow sow suspicion in Europe

China has urged Hungary to deepen its involvement in the Belt and Road Initiative, but analysts say Beijing’s support for Russia and growing pro-Western sentiment in Europe have soured the continent’s feelings about the global infrastructure programme even if Budapest steps up its commitments.

China’s top diplomat Wang Yi told Hungarian trade and foreign affairs minister Peter Szijjarto in Budapest on February 20 that China was ready to “elevate their cooperation on building the belt and road projects to a new level”, South China Morning Post reports, citing the state-backed Xinhua News Agency.

Wang had recommended a day earlier to self-styled “illiberal” Prime Minister Viktor Orban that the two countries “further strengthen high-quality cooperation” in belt-and-road work, according to Xinhua.

After Wang’s visit, the foreign minister said he had “high hopes for future cooperation” and called his country a top spot for Chinese investment, which is worth more than US$1 billion annually.

President Xi Jinping’s trademark Belt and Road Initiative aims to deepen China’s influence and economic integration with the world through a network of infrastructure projects worth more than US$1 trillion. Cooperation documents have been signed with 149 countries since its launch a decade ago.

Hungary joined the initiative in 2015 and that year became Eastern Europe’s largest recipient of Chinese outbound direct investment, totalling US$571 million.

Orban, who has been accused of undermining democracy in Hungary, has embraced the belt and road plan as a way of opening new markets in Asia for the country’s exports. Its chief project under the initiative is a US$1.9 billion, 350km high‑speed railway to Serbia.

Szijjarto said Hungary was committed to taking part in the plan and would speed up construction of the Hungary-Serbia railway, Xinhua reported.

But analysts said it was unclear whether the country would agree to more projects and Szijjarto’s Facebook posts this week did not send any signals.

“I don’t think there is much of a future for the belt and road in the pro-Western countries, though China would like to have both camps in the fold,” said Chen Zhiwu, chair professor of finance at the University of Hong Kong. “The world is being divided into two blocs again.”

Many European leaders resent China’s refusal to condemn Russia or join sanctions against Moscow over the year-old war in Ukraine, experts said.

Since he landed in Europe last week, Wang has had to fend off questions and criticism about China’s position and has told European leaders China backs a peaceful resolution to the war. Wang reached Moscow on Tuesday for a series of meetings.

“With the war in Ukraine, China’s increasingly close ties to Russia are likely to make other countries in Eastern Europe less eager to do business with China,” said Andrew Collier, China economist with Global Source Partners in Hong Kong.

“Unless China alters its strategic foreign policy, the investment climate in the region is going to become colder.”

A host of other issues have tarnished China’s reputation in Europe in recent years.

Some European nations have spoken out against Beijing’s pressure on Taiwan and Hong Kong.

Trade and technology disputes between China and the United States since 2018 have segmented supply chains, too, with Europe largely favouring Western channels for components such as semiconductor chips.

“Most of the European countries are now far more suspicious of China than previously,” said Alexander Vuving, a professor at the Daniel K. Inouye Asia-Pacific Centre for Security Studies in Hawaii.

“They look at [Belt and Road Initiative] projects with a different lens now. The previous lens was that of globalisation. It’s being replaced with the lens of strategic competition.”

The belt and road strategy has drawn criticism about environmental damage through developments like Chinese-sponsored coal plants and triggered accusations of debt-trap diplomacy, meaning entrapping countries with loans that cannot afford to repay. China has vehemently denied the accusations.

“China and Europe don’t usually talk much about [Belt and Road Initiative],” said Alicia Garcia Herrero, Asia-Pacific chief economist at Natixis Corporate & Investment Banking in Hong Kong.

In 2021, leaders from Canada, France, Germany, Italy, Japan, Britain and the United States agreed at the Group of 7 summit to launch the Build Back Better World initiative.

European leaders and their political parties have sidelined the belt and road for now because of US remarks about China’s links with Russia, said Zhao Xijun, an associate dean with the School of Finance at Renmin University in Beijing.

“At the moment, they’re not considering economic development matters,” Zhao said. “They’re looking to protect their own political positions.”

But when economic development and “people’s livelihoods” move up the agenda at a later date, he said, they will reconsider China’s initiative.