The Hungarian elections, in which longstanding Prime Minister Viktor Orban lost, attracted major international attention. Indeed, the results will have repercussions far beyond Hungarian borders. And while much of commentary focuses on the implications for the European Union, United States, and Russia; China also had a stake here.
In several recent elections worldwide, including the last presidential clash in the U.S., it was not entirely clear what China’s preference would be. For instance, while much of the world seemed to have concerns about a second term for Donald Trump, China was said to be prepared better than others. In Hungary, however, China’s preference was clear: Beijing has long grown used to working with Orban and his government.
To understand the implications of the elections for China, it is important to recognize that Hungary’s friendly positions toward China have not been the result of Beijing’s pressure. It was Orban who decided to send friendly signals to China as part of his political program, which has increasingly focused on criticism of liberal democracy, the EU, and the West. By engaging China, Orban signaled to Brussels, and also domestically, that he had important connections.
Although Chinese investments in Hungary in recent years have been significant, China’s economic presence in the country is actually quite limited: China has no leverage to directly influence major policy decisions. Indeed, Hungary – like its Central European neighbors – is highly integrated within Central European value chains, with most of their trade and investment exchanges being within the EU, especially Germany.
As a result, the new Hungarian government should have the freedom to chart a new course of foreign policy on China. Incoming Prime Minister Peter Magyar has suggested that Hungary would become more cooperative with the EU. While not turning Hungary into a China hawk, it can be expected that the government under Magyar would not veto EU criticism of China and would refrain from rhetorical support for China.
And such political and symbolic gestures have actually been the main things that Hungary under Orban provided for China. Under Orban, Hungary blocked common EU positions on issues such as China’s human rights situation, policies in Hong Kong, maritime disputes in the South China Sea, or Taiwan.
Orban made Hungary into a politically symbolic powerhouse, not an economic one. That applies to the China-Hungary relationship, too. Hungary has been important to China primarily due to politics; its economic value to Beijing is a distant second. Even so, with Orban now beaten, the changed political context of China-Hungary relations will have repercussions for the economy.
The new Hungarian government will obviously have to work with China and Chinese investors that have arrived in the country in the recent years, establishing some of the most important Chinese factories in the EV and battery sector in the EU.
It will be interesting to observe whether the new political reality will have any impact on these projects, which have been controversial for various reasons – even within Orban’s Fidesz party. Some of the criticism has suggested that the massive Chinese FDI may not be beneficial to Hungary in the end, because it risks further straining the country’s limited energy and labor resources while potentially causing environmental problems.
While Orban supported these investments for political and other reasons, the new government may be more pragmatic. Some of the projects might even be cut if not deemed beneficial.
While it’s obviously too early to predict concrete steps of the new government, it seems likely that Hungary’s positioning toward China will go through some adjustments. Although not moving from one extreme to another, Magyar is probably going to stick to the EU mainstream when it comes to China, to focus on improving relations with Brussels (and unfreezing the EU funds for Hungary).
At the end of the day, Hungarian public opinion has never been exactly China-friendly, and this is even more the case for the voters of the new government. So walking back from the uniquely China-friendly position within the EU that Orban has taken for years can win political points for the new government.
