Chinese President Xi Jinping concluded an “all-weather” strategic partnership agreement with Hungary on Thursday, capping off a three-nation diplomatic tour of Europe aimed at solidifying Beijing’s footprint on the continent and countering growing European “de-risking” efforts and national security-based restrictions.

"We are willing to take this as a new starting point to push bilateral relations and pragmatic cooperation into a golden channel and move toward a higher level," Xi said in Budapest following a meeting with Hungarian Prime Minister Viktor Orban.

Hungary, which has become an important investment and trading partner for China, was the final stop of the Chinese leader’s first European tour in five years — part of a six-day diplomatic offensive that also saw him visit France and Serbia.

Budapest’s China-friendly stance is in stark contrast with that of the European Union leadership and several of the bloc’s member states, which are considering becoming less dependent on what they view as a “systemic rival” and "strategic competitor" — factors that have gradually worsened Beijing's trade and investment relations with the 27-member bloc.

However, the right-leaning Orban, whose country was the first in Europe to join China’s Belt and Road initiative, has been proactive in fostering deeper ties with Beijing, noting in a news conference Thursday that three-quarters of investments into Hungary last year had come from China.

Orban, who gave Xi a red-carpet welcome, also pointed to China’s growing role in international politics, praising the country for being “one of the main pillars” of a new multilateral world order.

From Beijing’s perspective, Hungary represents an important Chinese foothold inside the EU, so much so that Xi expressed hope that Budapest, which will take over the Council of the European Union’s rotating presidency from July, will “promote the steady and sound development of China-EU relations.”

Hungary’s role in hindering Brussels’ efforts to de-risk from China cannot be understated, said Chase Blazek, Asia-Pacific analyst at U.S.-based geopolitics and intelligence firm RANE.

“Budapest helps maintain proxy veto power for China against EU initiatives that go against Beijing's interests, such as human rights complaints, sanctions or tech restrictions,” he said.

One of 18 other deals and memorandums of understanding signed Thursday, the upgraded Sino-Hungarian partnership comes at a time when the two sides are preparing to ramp up cooperation in several areas, including energy, connectivity, technology and infrastructure.

Orban and Xi negotiate at the Carmelite Monastery on Thursday. Hungary has been looking to lock in financing and fresh stimulus for its economy on top of billions of dollars from Chinese companies committed in recent years, mostly in the electric vehicle industry. | PM OFFICE / VIVIEN CHER BENKO / VIA REUTERS

For instance, the two sides pledged to work together in the nuclear industry and announced the beginning of discussions on developing a freight train line. This will come on top of the 342-kilometer railway project that China has been working on to link Budapest with the Serbian capital of Belgrade.

The two sides have also agreed on setting up electric vehicle battery plants and a solar energy storage facility in Hungary, while Chinese carmaker BYD announced in December that it plans to open its first European EV factory in the country — a move that could pose a serious challenge to European car manufacturers.

Xi’s efforts to forge closer ties with Eastern Europe had already been on full display the previous day when he and Serbian President Aleksandar Vucic proclaimed an “ironclad friendship” and agreed to follow a “shared future.”

Although not yet a EU member, Serbia also plays an important role in Beijing’s push to maintain its clout on the continent, especially as Belgrade sees China as a standard bearer for nations dissatisfied with the West or with the U.S.-led global order.

The Chinese leader had landed in the country late Tuesday, commemorating the 25th anniversary of a deadly U.S. airstrike during the 1999 Kosovo war that destroyed China’s Embassy in Belgrade.

In an editorial published that same day, Xi warned that the Chinese people would “never forget” the bombing and “never allow such tragic history to repeat itself,” remarks that were widely viewed as directed at NATO and the West.

“The timing of the visit was crucial in this context,” said Alicja Bachulska, a policy fellow at the European Council on Foreign Relations.

“By visiting Belgrade during the 25th anniversary of the NATO bombing of the city, Xi portrayed NATO, and by extension the United States, as destabilizing actors,” she said.

Bachulska said that Xi’s main goal in both Hungary and Serbia was to send a “clear signal” that placing a strategic bet on cooperation with China can pay off, particularly for countries that are discontented with Western-led formats of cooperation and what they perceive as double standards.

Blazek agreed, noting that Belgrade and Budapest “play a crucial role in China’s greater architecture of ties to Europe,” not just politically but also economically as they help sustain Beijing’s waning trade and infrastructure footprint in the region.

“China doesn’t necessarily need to have stellar relations with all of Europe to partly protect its interests therein,” he said, explaining that “even one or two ‘spoilers’ can help prevent, or at least blunt, Europe’s more hawkish actions against China.”

However, Xi’s talks of enhanced cooperation with Orban and Vucic stood somewhat in contrast with his discussions Monday in Paris with French President Emmanuel Macron and European Commission chief Ursula von der Leyen.

During a meeting at the Elysee Palace the two leaders pressed Xi to curtail Beijing’s support for Russia, warning of possible consequences for Sino-EU ties and pointing to Europe’s plans to de-risk economic ties with China.

Supporters wait for Xi's motorcade prior to his meeting with Orban on Thursday. | AFP-JIJI

While Xi reiterated Beijing’s commitment not to sell arms to Moscow, he bristled at the criticism, rejecting any Western attempts to use the crisis “to scapegoat or smear a third country or to stoke a new cold war.”

Macron and von der Leyen also pushed Xi to make bilateral trade relations more balanced, although little immediate progress was made on the issue.

Nonetheless, there was progress in other areas, with Paris and Beijing signing almost 20 bilateral cooperation agreements in fields such as aerospace, agriculture, green energy and people-to-people exchanges.

Xi’s main political goal in France, said Bachulska, was to show Paris that EU-wide concerns regarding China’s industrial overcapacity and Sino-Russian cooperation on the Ukraine war, among other things, can be resolved bilaterally.

“This was partially achieved,” she said.

At the same time, by also inviting von der Leyen to Paris, Macron managed to show Beijing that while he wants to advance vital French economic interests, he’s still backing the EU’s China agenda.

So how successful was Xi’s latest Europe trip?

Despite the praise from Budapest and Belgrade, analysts say such visits are rarely rousing successes or utter failures, especially when it comes to Western meetings with China.

While Xi apparently failed to persuade Macron to help Beijing combat growing European protectionism, the Chinese leader managed to “crack the door open for more diplomatic meetings with Europe, which is better than diplomatic isolation,” Blazek said.

This is important as Beijing will, in all likelihood, continue to seek cooperation with individual European countries as part of what some view as a “divide-and-conquer strategy.”

“China will try to exploit weaknesses in European unity and in Western Europe’s ties to the United States to prevent a wider anti-China economic and military coalition from materializing,” Blazek said.

If there is one key takeaway from Xi’s Europe tour, he noted, it is that China "will not go down without a fight," diplomatically speaking, when it comes to facing Western economic and technological restrictions.

Nonetheless, all signs point to a steadily, albeit slowly, deteriorating trade and investment relationship for the foreseeable future, especially as Beijing shows no willingness to change its industrial, economic, tech or military policies to allay European security concerns.

“This means that Xi will continue to be limited in his tool set of ways to decelerate the slide in Europe-China relations,” Blazek said.

Culled from Japan Times