Daniela Schwarzer is the executive director for Europe and Eurasia at the Open Society Foundations.
All eyes may currently be on Russia, but meanwhile, concerns regarding the European Union’s relationship with China continue to mount. From the diplomatic boycott of the Beijing Winter Olympics to confronting China’s economic punishment of Lithuania and tackling its authoritarian model within the multilateral system, the list grows longer by the day. However, it’s important to remember that, just like with Russia, simply achieving a unified EU position on China is not a fait accompli.
There are some governments within the bloc that not only view a close relationship with Chinese President Xi Jinping as a key to prosperity but also see him as an ideological bedfellow. And the EU’s failure to tackle democratic backsliding among its own members over the course of the last decade makes China’s task much easier. Beijing only needs to turn one single member country’s vote in order to sow discord — and it knows just how to do it. One need only look at Hungary, to see how.
Hungary is the most striking example of a member country receptive to Xi’s overtures, not the least in terms of leadership style. After all, Hungarian Prime Minister Viktor Orbán and President Xi have much in common when it comes to suppressing political dissent and stoking nationalist sentiment.
Hungary has also become the largest destination in Central and Eastern Europe for Chinese investment, with Budapest now the European logistics hub for Huawei. This has spawned controversial projects in recent years, such as the Budapest-Belgrade railway, which was built with Chinese money, and the first Chinese university campus in the EU due to be built in Budapest — also courtesy of a loan from Beijing. In October 2021, Hungary even negotiated a loan with the China-backed Asian Infrastructure Investment Bank for improvements to its health system — the first such loan issued outside of Asia.
However, it is not only ideology and investment that bind these two countries. Last year, when the Chinese Minister of National Defense Wei Fenghe visited Hungary — a NATO member — he spoke of China’s willingness to “push the military-to-military relations to a new level.” Budapest has also pledged to produce the Chinese-made Sinopharm COVID-19 vaccine, despite the fact that it has not received approval by the European Medicines Agency — Orbán himself has been jabbed with Sinopharm.
This close intertwining of interests is already paying dividends for China and has hampered a coherent EU foreign policy: Shortly after the Chinese defense minister’s visit, the Hungarian government vetoed EU statements condemning the continued suppression of pro-democracy protests in Hong Kong. Budapest also threatened to block EU sanctions imposed on companies and individuals involved in human rights abuses against Uyghurs in Xinxiang province, with the country’s foreign minister publicly labeling such sanctions “meaningless.”
Now, the slow wheels of Europe’s collective decision-making risk undermining its capacity to implement a more strategic approach. And while the Hungarian and Polish governments incur the wrath of the European Commission for undermining the EU’s founding principles, they’re hedging their bets through stronger links to China. When threatened with the suspension of EU recovery funds over attacks on the rule of law, lining up alternative sources for “no-strings-attached” loans and investment could be a viable plan B.
While European governments have thus far not been opting for outright confrontation with China, stepping up efforts to protect their own interests and sovereignty instead — the new “anti-coercion instrument” or the investment screening mechanism are the latest examples of this — if they are serious about containing China’s influence as a systemic competitor, the EU must first address its supposed allies who find this rival system attractive.
The division surfacing among the Visegrad Four countries, with electorates in the Czech Republic and Slovakia recently voting out authoritarian leaders, offers a window for stronger engagement in this regard.
Furthermore, the EU needs to make clear that gambling with the rule of law, human rights and democracy inside the union comes at a high price. And together with the French presidency of the Council of the EU, the new German government should provide strong political backing to the European Commission’s efforts to enforce the rule of law.
The seeds of this incoherence were sown when the EU failed to forcefully contain the rise of illiberal authoritarian governments in its midst, preferring diplomacy and consensus at all costs. And the bloc now finds itself struggling to contain authoritarians both at home and abroad at the same time.
The systemic competition with China’s authoritarian state capitalism is not just about the future of democracy but so much more. And countries like Hungary and Poland’s descent into illiberalism not only obstructs a more forward-leaning China policy but also undermines the EU’s credibility as a defender of the rule of law.
