Chinese-Hungarian relations: An overview

Some of you surely remember that Viktor Orbán even before the elections kept emphasizing the importance of the East. He seems to be mesmerized by the rapid development of China and India, and he believes that although Hungary’s “ship is anchored in western waters the wind blows from the East.” For Orbán the East includes not only China and India but Russia as well.

The point man in this eastern orientation seems to be Tamás Fellegi. I wouldn’t be surprised if the idea of turning toward China and Russia came from him. After all, Fellegi was entrusted with the negotiations with Russia as early as July 2010, and in December he also took over the negotiations with China.

Fellegi has been spectacularly unsuccessful in dealing with Russia. He would travel to Moscow and return empty handed. The sticking point was the Hungarian treatment of a Russian company that owns 20% of MOL but has no voting rights. Without going into the details and getting lost in the intricacies of Russian-Hungarian relations, one can pretty well predict that there will be no great understanding between the two countries in the foreseeable future.

Fellegi seems to be more successful in Beijing. Feelers were put out as early as August 2010 when Zsolt Semjén, deputy prime minister, and Márton Gyöngyösi (Jobbik), the deputy chairman of the parliamentary committee on foreign affairs, visited China. There Semjén in his usual expansive style articulated Hungary’s willingness to give preference to China in economic matters. Soon enough, in December, Viktor Orbán himself visited Shanghai, where he conducted “serious negotiations” with Wen Jiabao, his Chinese counterpart. At this meeting the question of Chinese participation in the modernization of the Hungarian railway system was discussed. A week after these discussions between Wen and Orbán, Fellegi was named commissioner (kormánybiztos) in charge of Chinese-Hungarian affairs. He immediately went to China to discuss the details of economic cooperation and afterward he gave a press conference in which he indicated that he had reached an understanding with the Chinese negotiators. The Chinese, according to Fellegi, “understood and appreciated the fact that Hungary wants to place Chinese-Hungarian relations on new foundations.” At this point Fellegi put a lot of emphasis on the fantastic business opportunities offered in China to Hungarian businessmen.

Although Fellegi denied that Beijing would buy up Hungary’s sovereign debt, he did mention “future financial cooperation with Chinese banks and the Chinese government.” He was also pretty sure that one of the “Chinese super-express trains would be delivering passengers” in Hungary soon enough.

For Hungary it is certainly important to develop economic ties with China, but according to the latest news the relations the Orbán government is developing with China go beyond investment, trade, and finance. Fellegi, who is again in China, gave a press conference at the Hungarian Embassy in Beijing. His most important message was that “there are no conflicts between China and Hungary, and as far as political goals are concerned the two countries are close to each other which means a good foundation for long-term strategic cooperation.”

Well, that’s quite something. China’s and Hungary’s “political goals” are very similar? That sounds pretty frightening to me. We know what’s going on in China when it comes to internal dissent. Let’s hope that Hungary will not try to emulate its Chinese friends in this respect. As far as so-called “strategic cooperation” is concerned, that is also a pretty loaded term. I suggest that you look up instances with the help of Google where the concept is mentioned. There have been strategic cooperation agreements signed and sealed between two countries that created a close political relationship between the two countries. Did Fellegi use the term loosely or is Hungary willing to have a very special political relationship with China? Fellegi, who received his Ph.D. in political science at the University of Connecticut, should be familiar with the terms used in international relations. One thing is sure, Fellegi admitted that he and his Chinese hosts discussed “political matters.”

And what about the non-political matters?  Although a few months earlier Fellegi was talking about Chinese super-express trains rumbling on Hungarian rails, by now the expectations are a great deal more modest. The Hungarian negotiators are trying to modernize the Hungarian Railways, which by itself may take a decade or more. However, China will have a piece of the pie: the CEO of MÁV signed a contract with the China Railway Construction Corporation which will take part in the modernization of the Hungarian railway system. In addition, they will also supply locomotives. Global Times, a Chinese paper, reported that the Chinese company will also “improve the structural qualities of the railway stations.”

But China Railway Construction Corporation is not the only business that might benefit from a presence in Hungary. China’s Huawei Technologies Co. will build its global supply center in Hungary. Further issues, such as financial cooperation and project capital raising, were also discussed by Fellegi and Zhou Xiaochuan, governor of the People’s Bank of China. Reuters reported today that Hungary and China are examining ways to cooperate on issuing Hungarian debt in the Chinese market. No word yet on opportunities for Hungarian businesses in China.

Economic ties can be a positive development, but what bothers me is the more than a hint of political cooperation and common political goals between China and Hungary.

April 22, 2011