Chinese President Xi Jinping (R) shakes hands with Hungarian Prime Minister Viktor Orban (L) prior to a welcoming ceremony in Buda Castle of Budapest, Hungary on May 9, 2024. The Chinese President pays a three day official visit to Budapest from the evening of May 8, 2024. LEHTIKUVA / AFP

International news

On May 9, 2024, Chinese President Xi Jinping arrived in Hungary, marking the final leg of his European tour and emphasising Beijing's strengthening ties with one of its closest allies within the European Union. Amidst ongoing global trade disputes and the divisive situation in Ukraine, Xi's visit to Hungary symbolises a significant effort by China to bolster its relationship with Europe through one of its most cooperative EU member states.

Serbian President Aleksandar Vucic (R) stands next to Chinese President Xi Jinping during a welcome ceremony in Belgrade, on May 8, 2024. Chinese President Xi Jinping will hold talks with his Serbian counterpart in Belgrade on May 8, 2024. LEHTIKUVA / AFP

Xi arrived in Hungary from Serbia, where he visited on May 8. There, together with Serbian President Aleksandar Vucic, Chinese President announced a deepening of bilateral relations by agreeing to establish a "community with a shared future." This agreement comes on the anniversary of the 1999 NATO bombing of the Chinese Embassy in Belgrade and underscores both countries' support for each other's territorial integrity and sovereignty. The visit, part of Xi's first European tour in five years, also included the signing of 29 agreements aimed at enhancing legal, regulatory, and economic cooperation. Moreover, a significant free trade deal set to begin on July 1 will enable tariff-free exports of 95% of Serbian products to China over the next five to 10 years. This deal is notable as China has been the largest single investor in Serbia since 2020, with investments increasing thirtyfold over the last decade.

During the talks in Serbia, a landmark decision was reached between the two countries to transform their comprehensive strategic partnership, established in 2016, into a community with a shared future. This upgrade signifies a profound deepening of ties between the two nations, heralding a new era of mutual cooperation and shared aspirations.

China and Serbia’s shared vision includes the pursuit of national development and revitalisation. Xi emphasised the strategic nature of the bilateral relationship, noting that Serbia has become the first European nation to form such a community of shared future with China. "We not only pursue our own development, but also strive to achieve common development with other countries in the world -- that is why I proposed the building of a community with a shared future for mankind," he commented. "Together, we have set a fine example of building a new type of international relations featuring mutual respect, fairness, justice and win-win cooperation," Xi said.
This community symbolises a mutual commitment to development, win-win cooperation, and mutual success, reflecting the common values and objectives of both nations.

The two leaders agreed to deepen and expand Belt and Road cooperation and collaboration between China and Central and Eastern European countries, contributing to their respective modernisation efforts. Xi assured continued support for Serbia in maintaining its independence, national sovereignty, and territorial integrity, highlighting the strategic cooperation and mutual support between the two nations.

The forthcoming China-Serbia Free Trade Agreement, effective from July 1, 2024, is set to further enhance economic ties. China also plans to import more high-quality agricultural specialties from Serbia, and cultural exchanges are expected to deepen, with initiatives such as inviting 300 young Serbians to China for study and exchange programs over the next three years.

President Vucic expressed gratitude and respect for China, noting the significant socio-economic impacts of Chinese investments, such as the revitalisation of the HBIS Smederevo steel plant. He reaffirmed Serbia’s support for China on critical issues, including Taiwan, emphasising that there is but one China in the world.

Both leaders stressed the importance of opposing hegemonism and power politics, upholding the principles of the UN Charter, and promoting international fairness and justice. They envision their strengthened partnership as a model of multilateralism and cooperation in addressing global challenges.

The talks in Belgrade concluded with the signing of the Joint Statement on Deepening and Elevating the Comprehensive Strategic Partnership and Building a China-Serbia Community with a Shared Future in the New Era. This agreement paves the way for a future where both nations work closely to further their cooperation in various fields, including infrastructure, energy, innovation, and cultural exchanges.

Upon his arrival to Hungary, Xi and his wife, Peng Liyuan, were greeted by Hungarian President Tamas Sulyok with full military honours. The Chinese flags adorned Budapest, reflecting the warm reception and the high importance placed on this visit by the Hungarian government. Later, Xi attended a state dinner hosted by Prime Minister Viktor Orban, a key proponent of strengthening ties with Eastern powers including China and Russia.

This year marks the 75th anniversary of diplomatic relations between China and Hungary, a milestone that underscores the depth and durability of their partnership. Over the decades, Hungary has become a crucial hub for Chinese investments. China has made significant investments in Hungary across various sectors, notably in the automotive industry, particularly in electric vehicle (EV) and battery manufacturing. This aligns with Hungary's aim to position itself as a global hub for EV manufacturing. China's contributions are visible in the establishment of several new businesses throughout Hungary since 2022, enhancing local infrastructure, technology, and employment.

Besides the automotive sector, Chinese investments in Hungary extend to other important areas like rail and road infrastructure, nuclear energy, and logistics, which support Hungary’s economic development and integration into global markets. The collaboration between the two nations also includes educational and research initiatives, aiming to foster innovation and technology transfer.

This influx of Chinese investment plays a critical role in Hungary's strategic goal of becoming a regional economic and logistical hub, balancing relations with both Eastern and Western markets.

During his visit, Xi Jinping is set to engage in comprehensive talks with Orban, with expectations to sign at least 16 different agreements. These agreements aim to enhance cooperation across various domains, including rail and road infrastructure, nuclear energy, and the automotive industry, which are pivotal to Hungary’s development strategy and economic interests.

Hungary's approach to foreign policy, particularly under Orban's leadership, has often put it at odds with Brussels, especially concerning issues like the proxy war in Ukraine and economic policies of the European Union. Orban's eastward-looking strategy, favouring closer ties with non-Western countries, provides a strategic advantage both for Hungary and for China to strengthen its foothold in Europe amidst broader geopolitical tensions.

Xi's visit also carries a broader message to the European Union. Amidst his engagements, including the initial leg of his tour in France where tensions were more palpable, Hungary represents a more congenial environment for China’s diplomatic overtures. "Together, we have set a fine example of building a new type of international relations featuring mutual respect, fairness, justice and win-win cooperation," Xi said.
Political analysts suggest that Hungary’s welcoming stance serves as a model of the partnership China seeks to cultivate with European nations, especially those that might feel alienated within the EU framework.

On the streets of Budapest, public opinion is in favour of Hungary’s independent foreign policy which puts the interests of the country first. Most citizens recognise the economic opportunities presented by Chinese investments, suggesting that similar investments would likely be welcomed across Europe despite geopolitical reservations.

Xi Jinping’s visit to Serbia and Hungary not only reaffirms the strong bilateral relations but also illustrates China's strategic approach to cultivating alliances within Europe. By aligning with Hungary, China demonstrates its readiness to support and invest in European nations that share similar views on sovereignty and development, while potentially influencing broader EU dynamics. As Xi’s tour concludes, the impact of these strengthened ties will likely resonate within the regional and global contexts, shaping future diplomatic, economic, and environmental dialogues across continents.