China In Eurasia

Welcome back to the China In Eurasia briefing, an RFE/RL newsletter tracking China's resurgent influence from Eastern Europe to Central Asia.

The China In Eurasia briefing is nearly six months old and I want your feedback. Send me an e-mail and let me know what you like so far, what you want to see more of, and what you think can be improved. Send your feedback to StandishR@rferl.org

I'm RFE/RL correspondent Reid Standish and here's what I'm following right now.

The Fight In Budapest Over A Chinese University

The showdown in Hungary over government plans to take out a $1.5 billion loan from a Chinese lender to build a satellite campus for Shanghai's Fudan University has intensified.

In the last two weeks, the temperature around the issue has risen, with protests in the streets of Budapest and political maneuvering ahead of parliamentary elections in 2022 as the country's disparate opposition targets Prime Minister Viktor Orban's China ties.

Finding Perspective: The escalation began with Budapest Mayor Gergely Karacsony announcing that the streets surrounding the proposed project site would be 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 the university project, which is slated to be built at a site where affordable housing for Hungarian students was previously planned.

This sparked action within the Hungarian government. Orban's chief of staff, Gergely Gulyas, floated the idea of a referendum on the issue -- something the opposition has been calling for -- but not until at least 2023. This was followed by Orban announcing that a vote would be held on the issue.

As my colleague Balint Szalai and I reported, this sets up a prolonged and tense political showdown in Hungary as the country prepares for 2022 elections, with the Chinese university taking center stage.

Why It Matters: Hungary's opposition candidates have united against Orban's Fidesz party as the prime minister faces what appears to be the first competitive elections after three successive landslides since 2010.

Surveys show a united opposition and Fidesz polling neck and neck, with Karacsony an early front-runner to be the opposition's candidate.

While China itself isn't much of a wedge issue, Karacsony has chosen the Fudan campus and other China-backed projects as a way to frame larger political topics and draw attention to the government's poor track record on transparency, deteriorating rule of law, and democratic backsliding.

Read More

• "This has become a political issue and we should decide this in a way that is the most acceptable to all," Orban said on June 10 as he announced that a referendum would be held on the issue. Although few other specifics have been given.
• Many observers see the government trying to push any vote on the campus until after next year's election in an attempt to defuse any momentum around the issue that the opposition has generated.
• The Hungarian parliament voted on the issue on June 15, RFE/RL's Hungarian Service reported. Lawmakers voted to transfer assets to Fudan University for the project, despite the government's talk of a referendum. Critics of the project say that this vote now makes preventing the campus from being built extremely difficult.

Expert's Corner: The Budapest Mayor Talks About Fudan University

I received many questions about the situation in Hungary lately, so here's more from what Budapest Mayor Gergely Karacsony had to say to RFE/RL for our article.

"The Student City will provide affordable housing to young Hungarians from the countryside, so the demonstration on [June 5] in Budapest was primarily about the well-being and opportunities for youth in rural areas. Therefore, the referendum should be nationwide, it should be about China's debt and the chances for rural youth. We stand against the Chinese debt and for housing for rural youth."

"It's understandable that China acts in order to increase its political and economic influence, but it is unacceptable for the Hungarian government to serve this Chinese influence-boosting effort instead of Hungary's own interests."

Do you have a question about China's growing footprint in Eurasia? Send it to me at StandishR@rferl.org or reply directly to this e-mail and I'll get it answered by leading experts and policymakers.

Three More Stories From Eurasia

1. Extraordinary Rendition

Lawyers for Uyghur groups have submitted new evidence to the International Criminal Court's (ICC) Office of the Prosecutor showing the government in Tajikistan has been cooperating with Beijing to send Uyghurs back to China, my colleague Bruce Pannier reports.

The Details: The lawyers are trying to get the ICC to target China for its treatment of Uyghurs and other Muslim minorities in Xinjiang, but given that Beijing is not a member, the court cannot open an investigation.

Instead, the complaint submitted by the legal team is targeting countries that have extradited Uyghurs back to China, where Beijing is alleged to be operating an internment camp system against Muslim minorities and accused by several Western governments and human rights watchdogs of committing crimes against humanity and genocide.

Tajikistan, one of China's western neighbors, is a target of the complaint, as is Cambodia. Both countries are ICC members and under The Hague court's jurisdiction.

The complaint alleges that "members of the Chinese Public Security Bureau who are present in Tajikistan direct local Tajik police to carry out raids on the areas where Uyghurs live and work," and that those Uyghurs who did not have "correct paperwork" were "then deported back into China by Chinese authorities in small groups of up to 10 to avoid international attention."

It also accuses Tajik authorities of helping to facilitate the extraordinary rendition of Uyghurs from Turkey back to China.

2. Debt Drama

Montenegro is negotiating how to access hundreds of millions in affordable credit from the European Union in order to help pay down its soaring debt, a large chunk of which is owed to China, Reuters reported.

Searching For A Solution: In addition to searching for cheap credit from Brussels, the Reuters report also said that Podgorica was looking into selling off state assets in order to pay down its debt and ease its financial dependence on China.

However, the government has since denied any plans to sell off state property to pay down its debts, my colleagues at RFE/RL's Balkan Service tell me.

"It is not true that any sale of state property is being prepared, nor is there a need for that. This government has ensured that Montenegro has the money to finance all obligations, which include those towards Chinese creditors," said a government spokesperson.

Background: Montenegro's debt to China is at the heart of a hot debate about Chinese influence in Europe.

The country borrowed $1 billion from the Export-Import Bank of China in 2014 to fund a 41-kilometer stretch of highway that was to be the first leg of a 163-kilometer link to neighboring Serbia. Although that initial segment is behind schedule and still incomplete.

China agreed to defer repayment of Montenegro's first tranche of the loan, which is now due in late 2022.

3. How Beijing And Islamabad Negotiate

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.

The Flagship Project: I interviewed Filippo Boni, one of the report's authors, about the research, which was done for the Carnegie Endowment for International Peace.

Beijing's growing footprint in Pakistan through the China-Pakistan Economic Corridor (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 dug 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.

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

Across The Supercontinent

Reinforcements: Sinovac, a Chinese vaccine, has arrived for use in Kazakhstan and received approval from the World Health Organization, RFE/RL's Kazakh Service reported. Sinopharm, another Chinese vaccine, is already available in the country.

View On The Ground: Local environmentalists in Montenegro say China wants to repair only a fraction of the damage incurred during construction for the country's $1 billion highway in a gorge declared a UNESCO site, RFE/RL's Balkan Service reported.

A Watching Eye: The Russian state company Rostelecom told my colleague, Zoya Simbirskaya, from RFE/RL's Tatar-Bashkir Service, that China's Hikvision will be providing video surveillance cameras for the upcoming September elections in Russia.

Banned: Romanian President Klaus Iohannis signed a bill on June 11 that banned China and Huawei from taking part in the development of its 5G telecommunication networks.

A 20-Year Footprint: The Shanghai Cooperation Organization (SCO) turned 20 on June 15. Raffaello Pantucci takes a look at the lasting imprint of the China-backed bloc for the Oxus Society.

Chinese Cash: The Kyrgyz government is looking for investors to build a logistics center in the At-Bashinsky district of the Naryn region, RFE/RL's Kyrgyz Service reports.

Chinese investors had previously expressed interest in the project, but the plans were put on hold last year amid protests by residents against the center being financed by Chinese money.

One Thing To Watch

The Tokyo Olympics are set to kick off at the end of July, but in political circles, attention is already shifting to the 2022 Winter Olympics in Beijing.

A group of politicians spanning 11 countries across Europe and North America launched coordinated efforts earlier this month to call for a diplomatic boycott of the 2022 games.

Their aim is to pressure governments to decline invitations to the Beijing Olympics, due to human rights abuses by the Chinese government, particularly over the treatment of Uyghurs and Muslim minorities in Xinjiang.

The initiative appears to be gathering steam. U.S. lawmakers pledged a diplomatic boycott of the 2022 Olympics as part of a wide-ranging, China-focused bill passed by the Senate and, this week, the Czech Senate called on politicians not to attend next year's Winter Olympics.

That's all from me for now. Don't forget to send me any questions, comments, or tips that you might have.

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.

SEE ALSO:

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.”