Xi Visits Serbia and Hungary, Pushing Wedge Into Europe

Following his trip to France earlier this week, Xi Jinping finished his European tour in Serbia and Hungary, where he received a warm, red-carpet welcome. The French leg of Xi’s tour was meant to soothe the E.U.’s souring attitudes towards China on trade and security and peel off Europe from the U.S. by targeting one of the E.U.’s most influential proponents of strategic autonomy. The Eastern European legs of Xi’s tour, on the other hand, were meant to flaunt the benefits of pursuing close, non-confrontational ties with China, by targeting two countries most at odds with E.U. policy towards Beijing. The symbolism was as clear as the mission: divide and conquer.

Branko Filipovic and Daria Sito-sucic from Reuters reported on the “shared future” to which Xi and Serbian President Aleksandar Vucic toasted in Belgrade:

China and Serbia on Wednesday agreed to follow a “shared future” as President Xi Jinping visited the Balkan country as part of his bid to forge stronger relations with allies at the edge of the European Union.

[…] The two countries signed 29 agreements promoting legal, regulatory and economic cooperation. Serbia will also become the first European country in years to enter into a free trade agreement with China when a deal signed last year comes into effect on July 1.

[…] Vucic said that since 2020 China had been the single-largest investor in Serbia, and that its investment was up 30-fold over the past decade. The free trade deal will guarantee tariff-free exports for 95% of Serbian products to China over the next five to 10 years, he said.

[…] “Serbia became China’s first strategic partner in central and eastern Europe eight years ago, and it becomes the first European country with which we shall build a community with shared future,” Xi said. [Source]

Xi’s arrival coincided with the 25th anniversary of the U.S. bombing of the Chinese Embassy in Belgrade during NATO’s war in Kosovo. In an op-ed published in Serbia’s Politika newspaper on Tuesday, Xi said that “we must not forget that 25 years ago today, NATO brazenly bombed the Chinese Embassy in Yugoslavia,” adding, “The Chinese people value peace but will never allow historical tragedies to happen again.” Xi skipped a planned visit to the site of the former embassy, which some interpreted as a potentially positive sign that China is trying to avoid inflaming U.S.-China tensions. But as Orange Wang wrote for the South China Morning Post, Xi’s tribute to the bombing nonetheless serves to vilify NATO while supporting Serbia:

Marking the embassy bombing will send a message to audiences both at home in China and Serbia, said [Stefan Vladisavljev, programme coordinator of the Serbia-based foundation BFPE for a Responsible Society].

“This moment of joint victimhood has played a significant role in the creation of symbolism which has been very prominent in both countries – the need to present the West as antagonist,” said Vladisavljev.

He said that in the long term this is “creating the distance between China and Serbia on one side, and the countries gathered around Nato on another” but for now the main focus is on the domestic scene. [Source]

Andrew Higgins from The New York Times reported on Xi’s similarly warm welcome in Hungary, where he and Prime Minister Viktor Orban upgraded their countries’ bilateral relations

President Xi Jinping of China on Thursday found another safe zone in a continent increasingly wary of his country, meeting in Budapest with the Hungarian prime minister, Viktor Orban, the European Union’s perennial odd man out as a vocal supporter of warm relations with both China and Russia.

As happened at his previous stop in Serbia, Mr. Xi received a red-carpet welcome and was spared from protesters, with his motorcade from the airport on Wednesday evening taking a roundabout route into the Hungarian capital, avoiding a small group of Tibetan demonstrators.

[…Messrs. Xi and Orban] pledged to elevate already-friendly relations to an “all-weather comprehensive strategic partnership” — a sharp divergence from the view of China held by the European Union, of which Hungary is a member, as “a partner for cooperation, an economic competitor and a systemic rival.” [Source]

In Hungary, Xi and Orban oversaw the signing of 17 agreements between their countries, regarding cooperation in the Belt and Road Initiative, investment, energy, supply chains, trade, culture, technology, media, and other sectors. Justin Spike and Jovana Gec from the Associated Press described how Xi is capitalizing on Hungary’s status as an estranged E.U. member to pursue China’s economic goals in Europe:

Tamás Matura, a China expert and associate professor at Corvinus University in Budapest, said Hungary’s hosting of major Chinese investments and production sites — and its agnosticism on doing business with countries with spotty democratic and human rights records — has opened a crucial door to China within the EU.

“The Hungarian government is the last true friend of China in the whole EU,” Matura said. “It is very important now to the Chinese to settle down in a country that is within the boundaries of the EU … and is friendly to the Chinese political system.”

One of the major benefits to China of establishing bases within the EU is avoiding costly tariffs. The European Commission, the bloc’s executive arm, is considering raising duties on the import of Chinese electric vehicles from its current 10% to protect the European auto manufacturing market — a mainstay for Germany, the 27-member bloc’s largest economy.

Yet in December, Hungary announced that one of the world’s largest EV manufacturers, China’s BYD, will open its first European EV production factory in the south of the country — an inroad that could upend the competitiveness of the continent’s auto industry.

[…] “EU funds have almost came to full stop flowing into the Hungarian economy, so now there is a desperate need in Hungary to turn towards other alternatives, other sources of financial capital,” he said. [Source]

Hungary’s Orban and Serbia’s Vucic were the only European leaders who traveled to Beijing last October for the third Belt and Road Forum. (Russian President Vladimir Putin was also in attendance.) They are also the primary European advocates for taking a conciliatory stance towards Russia in its war against Ukraine, a stance that most E.U. members strongly oppose. Taking a critical view, the editorial board of The Financial Times summarized how “much of Xi’s trip has been spent embracing Chinese allies that are troublesome members of the European family”:

Xi’s European tour this week has taken place under radically different circumstances [compared to his last visit in 2019]. In his five-year absence from the continent, China’s economic growth has slowed and Beijing has drawn the west’s ire by tacitly supporting Russia in its war in Ukraine. While the Chinese leader could have treated the trip as an opportunity for rapprochement with Europe, he chose instead to sow divisions.

[…] The Chinese president’s ambitions were more straightforward than in 2019: to keep Europe’s market open to Chinese products, and avoid the EU following in the path of the US. Given its ability to export huge quantities of cheap electric vehicles and green technologies, helped by what Brussels calls unfair state subsidies, Beijing fears EU tariffs. After German chancellor Olaf Scholz’s trip to Beijing last month underscored the beleaguered Germany economy’s dependence on China, Xi seemed to think he could head off the risk of tariff barriers by exploiting Europe’s faultlines.

Yet his confidence underestimates the extent to which the majority of EU countries now see China both as a security threat, exacerbated by its growing ties to Russia, and an economic threat, given its potential to undercut European manufacturing just as the economy recovers from the pandemic and a surge in energy prices. Recent cases of alleged Chinese spying have not helped Beijing’s image. And cosying up to the strongman leaders of Hungary and Serbia will have done little to assuage concerns in key EU capitals about the Chinese leader’s authoritarian worldview. [Source]

Xi’s visits to ostracized Eastern European capitals may also reflect the limitations facing Beijing amid a turbulent period for China-E.U. relations, during which few European countries—aside from those already harboring affinities for Putin—seem inclined to host China, Russia’s biggest backer. Commenting on the visits, Ishaan Tharoor wrote in The Washington Post how whether by design or by lack of choice, Xi’s proximity to Serbia and Hungary underscores the growing distance between Beijing and the rest of Europe:

Xi’s opportunism and choice of European destinations also reflect Beijing’s limited options. “Gone are the heydays of economic globalization, when China was viewed as an indispensable investment destination,” Chatham House’s Yu Jie noted. “Instead, the mood among European leaders is to ‘de-risk’ — moving investments and supply chains away from the world’s second largest economy.”

Yu added that “China’s protracted geopolitical competition with the US has already reduced Beijing’s choice of European partners and consumers.” An initiative by China’s foreign ministry to stitch together a bloc of Eastern and Central European nations in closer cooperation with Beijing collapsed in recent years. Countries like Lithuania and the Czech Republic have taken conspicuously strident stands in support of Taiwan, as concerns about China’s authoritarian influence spreads in Europe.

“Russia’s 2022 invasion of Ukraine seemed to cement a shift toward a more hawkish view, as the European Union and most of its member states reconsidered the wisdom of engaging with authoritarian regimes,” my colleagues reported earlier in the week.

[…] Xi came to Europe and walked along its political fault lines, currying favor with nationalist leaders who are — for their own reasons — eager to thumb their nose at Brussels. In doing so, he also underscored the growing distance between Beijing and the major capitals of the West. [Source]


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