Relations Between Hungary and China Forcing EU to Reckon With China

May 25, 2021 Updated: June 8, 2021

News Analysis

Shanghai Fudan University, one of the top Chinese universities in the world, has signed a contract to set up a campus in Hungary’s capital, Budapest, triggering strong opposition from local governments and the general public.

“According to Népszava’s survey, only a fifth of all people aware of the situation thinks that it would be beneficial for Hungary,” Daily News Hungary reported on May 17, 2021.

Recently, Direkt36, an independent investigative journalism center in Hungary, cited internal government documents, saying that the cost of the project was as high as €1.6 billion (approximately $1.9 billion), of which Hungary would finance €300 million directly and the remaining €1.3 billion was to be provided by state-owned China Development Bank in the form of loans, which could easily form a debt trap and repeat the mistakes of Sri Lanka, leaving the country under the control of the Chinese Communist Party (CCP). In addition, the construction materials would be procured by China and China Construction Group had fully contracted the construction project, which was in total violation of the EU procurement rules.

Budapest Mayor Gergely Karácsony, following talks with relevant Hungarian officials involved with the Fudan project, announced that “Budapest’s local government firmly opposes the construction of a campus of China’s Fudan University in the city” and that the local council “will use all legal and political means at its disposal to ensure that the student quarter is built and Fudan isn’t.”

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The construction of the section of a highway connecting the city of Bar on Montenegros Adriatic coast to landlocked neighbor Serbia, (Bar-Boljare highway) near the village of Bioce, north of Montenegrin capital Podgorica, which is being constructed by a state-owned Chinese company, on April 8, 2019. (Savo Prelevic/AFP via Getty Images)

“We see very serious national security risks in this investment,” Karácsony was quoted as saying by The Daily News on May 2.

Budapest Mayor: Project Threatens National Security

As summarized from a report by Index, Gergely Karacsony, mayor of Budapest, joined by Krisztina Baranyi, mayor of the 9th district, told a press conference on May 17 that they were opposed to and concerned about the Fudan University project. He also told Radio Free Europe Radio Liberty (RFE/RL) that the government refused to disclose to the council of Budapest details of the project.

At the press conference, Karacsony also noted that although Fudan is an international elite university, its charter requires it to toe the CCP line, as is the case with all prominent Chinese organizations. The Hungarian government’s decision would pose a “very serious national security risk” to the country, he said.

Karácsony told the media that Prime Minister Viktor Orbán had vowed not to launch any investment projects in Budapest that the city’s leadership opposed and that Orbán had not kept his promise.

Baranyi, mayor of the 9th district where the Fudan campus is to be built, said that she would launch a local referendum and all legal means to block the construction.

“The site on the Danube slated for the Fudan campus was earlier chosen to host a ‘Student City’ that would provide accommodation, recreation and sports facilities for 8,000 Hungarian students,” reported The Daily Times on May 2.

CCP Infiltration, ‘Trojan Horses’ in Hungary

According to a report by Panyi Szabolcs, a reporter for Direkt36, the CCP’s infiltration in Hungary is severe, with local Chinese students often recruited as spies by the CCP to infiltrate all sectors.

The report revealed that passport abuse has become a national security risk. Since 2012, about 20,000 foreigners, most of them Chinese nationals, have been granted a Hungarian residence permit through the so-called “golden visa program.” Under the program, those who invested 250,000-300,000 euros in Hungarian state bonds were eligible for residence in the EU.

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Hungarian Prime Minister Viktor Orban answers journalists’ questions during a press conference with his Polish counterpart in Budapest, on February 8, 2016. (Attila Kisbenedek/AFP/Getty Images)

According to RFE/RL, Katalin Cseh, a member of the European Parliament from Hungary’s Momentum Movement, said that “Beijing needs ‘Trojan horses’ within the EU, and the Hungarian government voluntarily offers Hungary for this role,” Cseh said. “It is a high risk when a country puts China’s interests above the European community’s interests, or above its own country’s interests.”

Cseh, 32, was one of the opposition politicians in Hungary who were concerned about “potential debt problems and a potential lack of academic freedom” at the proposed Fudan University campus, according to RFE/RL.

Born in Montreal, Canada, Cseh is a member of the centrist liberal party Momentum Movement. She spoke earlier in the European Parliament as a member of parliament in support of the people of Hong Kong and Xinjiang, asking the European Union to unite and defend its democratic values against the tyranny of the CCP.

Press Freedom in Hungary Becomes Headache for EU

Commentators say that since Hungary’s prime minister Viktor Orbán took office in 2010, the country has experienced a regression in democracy and a shift toward authoritarianism. He has also suppressed press freedom in the country and gradually tightened the “fourth power” of the media. When independent news network INDEX editor-in-chief SZABOLCS DULL was fired in July last year, three editors and more than 80 staff members resigned en masse, “because the dismissal of Szabolcs Dull endangered its professional independence and its future.” Thousands of people marched to the Prime Minister’s Office to protest and show their support for INDEX’s editorial staff.

“The NGO Reporters Without Borders put Hungary in 89th place in its annual media freedom ratings this year, making it the second worst country in the EU for press freedom,” as reported by The Guardian in July 2020. This rating was even lower than that of the increasingly regressive Hong Kong, which was 80th in the ranking in 2020.

Orbán has been accused of cracking down on the general public by passing in 2018 new labor laws, which were called “slave labor” by his opponents, as reported by The BBC in December. “New rules mean companies can demand up to 400 hours of overtime a year and delay payment for it for three years,” says the report.

In addition, the Hungarian government accepted supplies from the CCP to fight the CCP virus pandemic and bypassed the EU’s authorization for the emergency use of the Chinese vaccine. As reported by CCP mouthpiece Xinhua News Agency in February, Orban received the Chinese vaccine on Feb. 28, 2021.

However, in addition to the issues of press freedom and the epidemic, Hungary has twice recently blocked “EU joint condemnation of China’s crackdown on Hong Kong,” completely departing from the EU’s principle of solidarity on the China issue. At a press conference on May 10, German Foreign Minister Heiko Maas severely criticized Hungary for its “‘absolutely incomprehensible’ decision to block an EU statement accusing Beijing of cracking down on democracy in Hong Kong”, as reported by bne IntelliNews on May 12, 2021.

It is believed that Hungary, which is a member of both the EU and NATO, has become a major “headache” for the EU. Hungary has been in “serious breach of EU values,” Human Rights Watch was quoted as saying on its website. It is believed that Brussels will exert pressure on Hungary as the EU-China relationship continues to deteriorate in 2021.

Relations between the European Union and China have taken a marked turn for the worse in the past few months over Hong Kong and Xinjiang.

On May 20, a motion was passed to freeze the legislative process for approving the EU-China Comprehensive Agreement, with 599 members of the European Parliament (MEPs) voting in support of the motion, 30 votes against, and 58 abstentions. However, the Hungarian government, a member of the European Union, signed a cooperation agreement with Shanghai Fudan University at the end of last month to build an overseas campus of Fudan University, south of Hungary’s capital Budapest, which will enroll more than 6,000 students of different nationalities, including Chinese and Hungarians.