Is China Stealing Russia’s Thunder in Eastern Europe?

One of our senior network members, Dimitar Bechev, has recently published an article with Carnegie Politika on Chinese active policies in Eastern Europe post-2022. With his permission we are bringing you part of the article and a link to the original website. 

China’s Xi Jinping had a good time touring Europe last week. Admittedly, talks in Paris with French President Emmanuel Macron and Ursula von der Leyen, head of the European Commission, were hardly a shining success. Both Xi and his interlocutors largely stuck to their guns—whether on China’s ambivalent position on the war in Ukraine or the ongoing dispute regarding the import of electric vehicles into Europe.

But then came the Serbian and Hungarian legs of Xi’s European visit. In both Belgrade and Budapest, the Chinese leader received a hero’s welcome: crowds cheering his arrival at Palata Srbije and at the Buda Castle, his op-eds gracing the pages of Belgrade’s daily Politika and the Magyar Nemzet, and talk of a “shared future.” The visits to two of China’s closest friends in Europe yielded substance too, with Serbia signing a host of cooperation agreements, while Hungary continued discussions on a major greenfield project by carmaker Great Wall.

There are key differences between Hungary and Serbia, of course. One is a member of the EU and the other, at least on paper, a candidate country. Hungary has benefited tremendously from Brussels’s lavish subsidies and from full access to the European market, which has turned it into a manufacturing hub, a fact appreciated by German automakers such as Audi, Opel, and Daimler.

Serbia has likewise profited from an inflow of European investment, free trade, and its geographical location next to core EU countries. But from its position outside of the EU, it has neither the political clout nor the economic heft wielded by Viktor Orban’s Hungary. It is no coincidence that Chinese companies such as Tesla’s rival BYD and battery maker CATL have set up shop in the latter.

What the two countries have in common, however, is a tangled relationship with Brussels. Illiberal populism, state capture, and cozy relations with Russia have made Orban a maverick for the rest of the EU. Much of the European funding for Hungary was frozen in 2022. Serbia has also come under criticism over tainted local elections last December, and for the uptick in violence in northern Kosovo that has all but killed EU-mediated normalization talks between Pristina and Belgrade.

At a more fundamental level, Orban and Serbian President Aleksandar Vucic are aligned in betting on the emerging multipolar order. They have invested in relations with Russia in order to improve their bargaining positions with the EU and the West in general. That worked for the Hungarians last March when Orban succeeded in trading his veto on EU financial aid to Ukraine for unfreezing 10 billion euros in cohesion funds. Hungarian Foreign Minister Peter Szijjarto, one of the rare EU member state officials who still visits Moscow, was heard saying at a recent Chatham House event that Hungary would veto Ukraine’s EU membership if Kyiv did not fulfil certain demands posed by Budapest.

Vucic has also been pursuing an intricate balancing act between Moscow and the West, reportedly sending arms to Ukraine through third countries but keeping Serbia very much open for business for the Russians. These days, Russian can be heard on every corner in downtown Belgrade.

The common denominator is a mix-and-match approach. Hungary and Serbia cherry-pick the aspects of the EU they like and reject those they don’t, painting them as an unjust imposition on their sovereignty or, worse, a Soros conspiracy. In the same vein, they pick and choose the elements of Russian foreign policy they find useful: welcoming continued energy deals, but declining to use Hungary’s veto on EU sanctions, for instance, or using Russia as an ally in fighting Kosovo’s independence, but voting against Moscow in the UN General Assembly and refusing to support the annexation of parts of Ukraine.

You can finish reading the article on the website of Carnegie Politika.