China In Eurasia

BUDAPEST -- A controversial Chinese university project is becoming a contested political issue in Hungary and pushing Prime Minister Viktor Orban’s dealings with Beijing into the national spotlight ahead of parliamentary elections in 2022.

At the heart of the controversy are government plans to build a $1.8 billion satellite campus for Shanghai’s Fudan University in Budapest. Leaked documents show the government would take out a $1.5 billion loan from a Chinese bank to cover the majority of the costs and use Chinese contractors to complete the project by 2024.

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New Chinese University In Hungary Puts Orban's Beijing Ties In The Spotlight

The plans have galvanized Hungary’s disparate opposition -- which plans to select a single candidate to go head-to-head against Orban next year -- and provided a political rallying call for the prime minister’s opponents as they scrutinize his government’s close ties with Beijing.

After a series of media investigations over the campus plans that sparked a backlash, Budapest Mayor Gergely Karacsony -- who opposes the plan and is eyeing a run against Orban as the opposition’s candidate -- announced that streets surrounding the project site were being renamed Free Hong Kong Road, Dalai Lama Road, and Uyghur Martyrs' Road to highlight sensitive issues around China’s human rights record.

That was followed by protests in Budapest on June 5, where thousands took to the streets to demonstrate against plans for the university, which is slated to be built at a site where affordable housing for Hungarian students was previously planned, and opinion polls show is unpopular among the electorate.

“The government wants to put more than [$1.5 billion] of debt on us because of [Fudan University], which takes money from the pockets of every Hungarian, as this debt must be paid by our children and even our grandchildren,” Karacsony told RFE/RL.

Orban's chief of staff, Gergely Gulyas, appeared to backtrack after the protests, saying no final decision had yet been taken and that plans for the campus would be "ready for public discussion" by 2023.

On June 10, Orban confirmed that the issue would be put to a referendum.

"This has become a political issue and we should decide this in a way that is the most acceptable to all," Orban said.

The back-and-forth sets up a prolonged and tense political showdown in Hungary as the country prepares for the 2022 parliamentary elections.

Opposition parties have finally united against Orban’s Fidesz party as the prime minister faces what appear to be the first competitive elections after three successive landslides since 2010. The opposition has caught up with Fidesz in the polls and chosen Orban’s chummy China ties and the Fudan University plans as an early target in the long campaign.

“The referendum should be nationwide. It should be about China’s debt and the prospects of rural youth,” said Karacsony. “We didn’t protest against the Chinese people but against the underhanded sale of Hungary's sovereignty.”

Chinese Ties In The Spotlight

Foreign policy issues generally don’t resonate with the population, according to analysts and polling, but Hungary’s opposition is hoping Orban’s relationship with Beijing and the details surrounding the Fudan University project can be a useful way to frame larger issues about the government.

“China itself has very limited potential as an issue,” Gabor Toka, a senior research fellow at Central European University, told RFE/RL. “But it can grow because it is an issue that is symptomatic of wider concerns to do with transparency and corruption that get to the very core of the current government.”

Hungary signed a strategic agreement with Fudan University on April 27 that would open a campus in Budapest in three years.

The deal would make it the first Chinese university in the European Union and the first foreign outpost for the prestigious Shanghai-based school, which the Hungarian government says will raise higher-education standards in the country.

But the project quickly sparked controversy and became unpopular with voters.

Around two-thirds of Hungarians do not support building the university, according to the liberal think tank Republikon Institute. The same poll also showed that one-third of Orban voters disagreed with the project.

“The Fudan deal is a very bad deal and it’s hard to sell to the people,” said Toka, who monitors polling and data around Hungarian elections.

Documents obtained in early April by Direkt36, a Hungarian investigative-journalism outlet, showed the large and opaque loan that the government would be taking out from a Chinese lender.

A separate investigation by Direkt36 showed that plans for the campus date back to 2019, when Chinese Foreign Minister Wang Yi told Hungarian politicians that the university in Budapest was a “top priority” for Beijing.

Hungary has built close ties with China over the years, which have expanded since Orban returned to power in 2010 and launched an "Eastern Opening" policy meant to cultivate close ties with Beijing and Moscow in order to attract investment and economic opportunities following the global financial crisis.

Since then, Orban has forged relations with other illiberal governments, while repeatedly clashing with the European Union by curbing the independence of the judiciary and the media.

Budapest has also angered allies by blocking critical statements from the EU on China's record on human rights several times this year and, in April, Chinese President Xi Jinping thanked Orban for “safeguarding the overall China-Europe relations.”

Chinese investment in Hungary remains low, but Orban’s ties with Beijing have led to other high-profile projects.

Hungary took out a 20-year, $1.9 billion loan in 2020 from Beijing to build a railway link that would connect Budapest with the Serbian capital, Belgrade. But the project remains controversial at home and across the region due to delays and a lack of transparency.

In April 2020, the Hungarian parliament voted to give the government extraordinary emergency powers on the premise of combating the pandemic, but it also voted to keep all details around the railway project classified.

Gearing Up For 2022

Despite the reaction against plans for the Fudan University campus, targeting China ties is a difficult political tightrope for the opposition, analysts say.

While opinion polls show a majority of Hungarians have negative views toward China, opposition figures are looking to keep the discussion grounded within Hungarian domestic politics.

Karacsony announced that he and other opposition figures plan to write a letter addressed to Xi saying that if they win the election the plans for Fudan University in Budapest will be canceled.

But the mayor has also looked to frame the issue around the Orban government’s democratic backsliding and lack of transparency, rather than specifically targeting Beijing.

"Although we are worlds apart on human rights…we really just don't want a Chinese elite school built at the expense of Hungarian taxpayers," Karacsony told the June 5 rally.

Since backtracking and announcing a referendum, the Orban government has sought to both defend its position and deflect the blowback from the decision after next year’s election.

While no date has been set and there is no clarity about whether it would be a national or only citywide vote, comments from Gulyas indicate that any referendum would take place once plans for the campus are finalized, which the Orban aide has said wouldn’t be ready until 2023.

“To cancel the plans would be too much of a loss of face for China,” Philippe Le Corre, an expert on China and Europe at the Carnegie Endowment for International Peace, told RFE/RL. “[Orban] can’t let China lose face in this way.”

Orban also appears to be turning his attention to other issues that resonate with the electorate, such as migration, which polling shows is still seen as a top concern by a plurality of voters.

During a radio interview on June 11, the prime minister said that as the pandemic is being reined in, migration will once again become a top issue in European politics as he warned that “legions of migrants are banging on almost all European doors.”

“People have many reasons to make their minds up about this government, but it won't be made over China,” said Toka. “The Orban government is a well-oiled machine and savvy with their PR. They know how to get their message out there.”

A recent study of China's Belt and Road Initiative (BRI) in Pakistan suggests Beijing has less control over its massive development projects as was first thought and often has to alter its plans to accommodate Pakistani officials.

Since it was launched six years ago, the China-Pakistan Economic Corridor (CPEC) has become the centerpiece of the BRI, which aims to build infrastructure, expand trade links, and deepen ties across Eurasia and Africa.

Over the years, CPEC has morphed in size and scope, with Beijing already investing $25 billion and some estimates saying the bundle of energy and development projects could reach $62 billion once completed.

The far-reaching project has come to represent Beijing’s wider geopolitical ambitions, with CPEC forming the backbone of China's presence in Pakistan and symbolizing the “all-weather friendship” between the two countries.

But a study by the Carnegie Endowment for International Peace digs deeper into the internal machinery of how CPEC is unfolding on the ground, looking at negotiations between Beijing and Islamabad and how China has adapted its plans to suit the domestic situation within Pakistan.

“There is often an impression that the BRI happens with China parachuting its projects and plans into recipient countries that have very little say over how things happen on the ground,” Filippo Boni, one of the report’s authors and a lecturer at The Open University in Britain, told RFE/RL. “Whereas what we observed in Pakistan is that it’s much more complicated and the agenda and priorities of the recipient countries have huge sway over how things unfold.”

Beijing’s growing footprint in Pakistan through CPEC has made it one of the most visible case studies of China’s growing presence abroad and has led to accusations by critics that the grouping of projects is a tool for Chinese expansion and a way to impose its will on Islamabad.

But Boni and co-author Katharine Adeney’s research on CPEC highlights how Chinese actors have adapted the project to suit the evolving needs and desires of Pakistan’s political leadership and how Islamabad has shaped what kind of projects have been pursued over the years.

“China can’t just get its way through the local context as easily as some might suggest,” said Boni. “It’s about negotiations and mutual interest. China’s power has its limits, and it needs to adapt.”

Shaping CPEC

Plans for CPEC were first discussed in 2013. It officially launched two years later and has come to form a bundle of energy, infrastructure, and industrial projects in Pakistan.

According to Adeney and Boni, partisan politics in Pakistan have played a key role in forming CPEC, both in terms of its route and the types of projects that have been pursued.

In particular, they point to how former Pakistani Prime Minister Nawaz Sharif prioritized directing CPEC toward the Sindh and Punjab provinces in order to boost his party’s prospects during elections by providing investment to the politically important regions.

Similarly, Sharif pushed for CPEC’s early investments to go toward energy projects in the hope that ending the country’s electricity shortages could improve his reelection bid in 2018.

Pakistani politics have continued to play a role in forming CPEC under Prime Minister Imran Khan, who succeeded Sharif in 2018.

While Khan’s government expressed initial suspicion toward BRI and continues to worry about the long-term implications of becoming too dependent on China, CPEC has since been embraced as a much-needed boost to kick-start Pakistan’s economy at a time when Islamabad is struggling to attract international investors.

Khan’s government has also harnessed CPEC to shore up its own political base, choosing to establish a special economic zone in Khyber Pakhtunkhwa Province despite Beijing preferring different locations and feasibility studies showing other areas would perform better.

“Each government has used the CPEC in different ways for their own ends,” said Boni. “But both have seen it as a way to showcase and deliver on promises of development to the population.”

Perhaps the project within CPEC that has received the most notice is the Gwadar Port in southern Pakistan. The port has received much international attention because of its strategic location close to the Strait of Hormuz -- the world's most vital route for shipping oil -- and providing access for China to the Indian Ocean.

But as Adeney and Boni highlight, the port in Gwadar has been a priority for Pakistani governments for nearly two decades and predates the launch of the BRI.

“It’s not only about China’s strategic interests and geopolitical priorities, but Pakistan’s as well,” said Boni.

Rhetoric vs. Reality

While CPEC is a priority for both Beijing and Islamabad, the project continues to face numerous obstacles as it moves forward.

Many projects have fallen behind schedule or so far failed to deliver on the promised results. This has led to the Pakistani military taking greater control through the 2019 creation of the CPEC Authority -- a government body authorized to oversee BRI projects in Pakistan -- and Islamabad is looking to cede further authority to the military to implement CPEC.

But this too has brought blowback.

In August 2020, a report that Asim Saleem Bajwa, the retired general who heads the CPEC Authority and also serves as special assistant to Khan, sparked controversy after it alleged he used his influential position to help his family amass huge wealth.

Separatist and extremist groups in the country have likewise launched plans aimed at attacking CPEC and Chinese interests in Pakistan.

Baluch insurgents claiming to be aided by Sindhi separatists attacked Pakistan's stock exchange in June, and in 2018 three gunmen tried to enter the Chinese Consulate in Karachi before being killed in a shoot-out. The attack was later claimed by the Balochistan Liberation Army, a separatist group.

Despite these mounting obstacles, Boni says both Beijing and Islamabad have invested too much money and political capital to turn away from the CPEC.

“[CPEC] has many problems, but it is still going ahead,” said Boni. “China has invested money and credibility in Pakistan and progress on [CPEC] sends an important message about the wider state of the BRI.”