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

BUDAPEST -- A controversial Chinese university project has renewed concerns about Beijing's growing influence in Hungary and pushed Prime Minister Viktor Orban's close ties to China back into the spotlight.

Hungary signed a strategic agreement with Fudan University on April 27 that would open a campus in Budapest by 2024. 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 government says will raise higher-education standards in Hungary.

But growing concern about a lack of transparency over the project, as well as revelations that the Hungarian government is planning to take on a huge, opaque Chinese loan to build the campus, has left the venture embroiled in controversy.

"Until the government provides full disclosure of all the details of the project, we have nothing to negotiate about, which means that we will not give our consent to the construction of the Chinese university," Budapest Mayor Gergely Karacsony told RFE/RL.

Karacsony remains one of the most vocal critics of the project, saying the planned campus places an undue financial burden on taxpayers and that the government is refusing to disclose all of its "decisions, contracts concluded or in preparation, and strategic agreements" regarding Fudan's plans in Budapest.

Budapest Mayor Gergely Karacsony (file photo)

Documents obtained in early April by Direkt36, a Hungarian investigative-journalism outlet, show that pretax construction costs for the Fudan campus are estimated at $1.8 billion, more than the Hungarian government spent on its entire higher-education system in 2019.

The state plans to finance around 20 percent of the project from its central budget, with the rest of the money provided by a $1.5 billion loan from a Chinese bank. According to the documents, the construction will be carried out using mostly Chinese materials and labor, and Fudan University has agreed that the China State Construction Engineering Corporation -- the largest construction company in the world -- will bid for the lucrative contract.

The area where the government wants to build Fudan University was previously picked to host a Student City that would provide accommodation and other facilities for Hungarian students. Karacsony said that the city's plans were being overridden by the Hungarian government and that he and other high-ranking city officials planned to launch a referendum to block construction of the university. The strategic cooperation agreement "is about giving huge buildings to China for [free]. It serves the expansion of Chinese companies in Europe," he said.

Budapest Mayor Gergely Karacsony (right) and Krisztina Baranyi, the mayor of Budapest's 9th district, pose at the planned site of the Chinese Fudan University campus in Budapest on April 26.

The proposed Fudan University campus is the latest manifestation of China's growing footprint in Hungary, which has 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 new economic opportunities for Hungary following the global financial crisis.

While Chinese investment into Hungary and Central Europe as a whole has been slow to materialize, Orban has cultivated a strong relationship with Beijing over the years.

Chinese President Xi Jinping spoke with Orban on the phone on April 29, with Xi praising the nationalist leader for his China-friendly policies and deepened cooperation throughout the pandemic before inviting him to visit Beijing.

"Hungary is -- and will remain -- the centerpiece for Chinese engagement in Central Europe and that's only become more true during the pandemic," Paul Stronski, a senior fellow at the Carnegie Endowment for International Peace, told RFE/RL. "For the Chinese, Hungary is the gateway to the rest of Europe."

A New Opening

Finding the right balance between friendly gestures to Beijing and still maintaining the trust of Western allies has been a unique feature of Hungary's foreign policy. But walking that tightrope has become increasingly hard for Budapest during the pandemic.

The Orban government's decision to move forward with the Fudan campus stirred concern in Washington for its NATO ally, with the U.S. Embassy in Budapest expressing reservations over the project. "The possible opening of Fudan University's first campus in Europe is a cause of concern, as Beijing has a proven track record of using its higher-education institutions to gain influence and stifle intellectual freedom," the embassy said in a statement to the Hungarian newspaper Magyar Hang.

Budapest has also found itself at the heart of several incidents with the EU in which the Hungarian government has sought overtures to Beijing.

Following tit-for-tat sanctions in March between China and the EU over Beijing's human rights abuses in its western Xinjiang region, Hungarian Foreign Minister Peter Szijjarto denounced the measures as "pointless, self-aggrandizing, and harmful."

A few days later, Chinese Defense Minister Wei Fenghe was in Budapest as part of a planned visit and used the opportunity to condemn EU sanctions and praise Hungary's conciliatory approach, claiming that Beijing "has always regarded Hungary as a good brother."

Budapest also reportedly blocked an EU statement the same month that criticized China's new security law in Hong Kong, preventing the bloc from initially joining the United Kingdom and the United States in their own statements over the erosion of human rights in the former British colony.

Hungarian President Janos Ader (left) hosts Chinese Defense Minister Wei Fenghe at the Sandor Palace in Budapest on March 24.

Hungary is also the only EU member country that hasn't acknowledged potential security concerns posed by Chinese vendors like Huawei to 5G mobile networks. Budapest is even home to Huawei's largest manufacturing base outside of China and hosts a new regional research and development center for the company.

Opposition politicians in Hungary have also raised concerns about the proposed Fudan University campus, pointing to potential debt problems and a potential lack of academic freedom at the institution.

Katalin Cseh, a member of the European Parliament from Hungary's Momentum Movement, told RFE/RL that she asked EU foreign-policy chief Josep Borrell to prevent the establishment of the Budapest campus due to the wider risks it could pose to the bloc.

"Beijing needs 'Trojan horses' within the EU, and the Hungarian government voluntarily offers Hungary for this role," Cseh said. "It is a high risk when a country puts China's interests above the European community's interests, or above its own country's interests."

Between China And The EU

According to Tamas Matura, an assistant professor at Corvinus University in Budapest and the founder of the Central and Eastern European Center for Asian Studies, these moves should be viewed as political gestures to Beijing rather than substantial policy shifts, with the overtures to China functioning as a bargaining chip in Hungary's ongoing standoff with the EU.

"In the framework of Orban's battle with the EU, he needs a big brother like China," Matura told RFE/RL.

Orban has championed what he calls "illiberal democracy" in Hungary and Budapest was singled out in human rights watchdog Freedom House's annual report, published in April, for an "unparalleled democratic deterioration over the past decade."

Orban's Fidesz party has also been suspended from the EU Parliament's European People's Party and, as Budapest and Brussels remain locked in a tug-of-war set off by EU concerns over the rule of law and misuse of the bloc's funds, observers like Matura say the prime minister is using his relationship with China for domestic purposes.

Hungarian Prime Minister Viktor Orban arrives for an EU summit at the European Council building in Brussels in Decemer 2020.

"None of these ideas are coming from China, they are coming from the Hungarian side, but of course Beijing is happy to go along with them," Matura said.

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, including a feasibility study about its profitability, arguing that it was required in order to secure a loan from the Export-Import Bank of China.

This has led some critics in the country to question the project's true benefit. Further concerns were raised after a significant contract for the construction work went to a consortium owned by billionaire Lorinc Meszaros, Hungary's richest person and a childhood friend of Orban.

Elsewhere, Orban's close relationship with Beijing has helped solidify his standing at home in at least one area.

While public approval in Hungary for China has declined since the start of the COVID-19 pandemic, Budapest's use of Chinese vaccines has helped give Orban a domestic boost in combating the virus.

Hungary ordered doses of the BioNTech/Pfizer, Moderna, and AstraZeneca vaccines through the EU, but is the only member of the bloc that also approved China's Sinopharm and Russia's Sputnik V vaccine, despite neither shot being approved by the European Medicines Agency.

So far, the move appears to have paid off for the populist Orban, who is looking to increase support ahead of parliamentary elections in 2022. Hungary has fully vaccinated 21.5 percent of its population as of May 2 -- nearly double the EU average -- and has begun to ease coronavirus restrictions.

"There might be a sense of satisfaction right now in the Hungarian government," Matura said. "A satisfaction that ties with Beijing paid off when they needed help fighting the pandemic, which were also helpful ahead of the general elections next year."

The Home Front

Analysts say the Orban government's embrace of Beijing is difficult to separate from the shifts taking place within Hungary's domestic politics.

The strategic agreement with Fudan University also coincided with recent changes to the management of Hungarian universities, which not only transfers billions in state assets to those close to the prime minister, but also could enable Orban and his supporters to exert long-term control over public education in the country.

A doctor administers the first dose of Chinese Sinopharm coronavirus vaccine to a patient at his office in Kallosemjen on March 25.

The Fudan announcement also comes shortly after the Central European University -- founded by billionaire George Soros and considered one of Hungary's premier postgraduate institutions -- was effectively forced out of the country in 2018 after amendments were passed to a higher education law that were widely seen as targeting the university.

The European Court of Justice said in October 2020 that the move against the university violated Hungary's commitments under the World Trade Organization and infringed upon the provisions of the EU Charter of Fundamental Rights relating to academic freedom. Despite that ruling, the Central European University remains based in Vienna.

All this leaves Hungary at a crucial junction as it gears up for next year's elections, Stronski says.

The shifts in the country's domestic and foreign policies over the last decade have largely been led by Orban and should he and his Fidesz party lose in 2022, many of those changes could see a swift reversal.

"Having Orban in place for the last decade has allowed the Chinese to invest in him and also in the Hungarian elite," Stronski said. "If the government changes hands there's no certainty that this China policy would stay in place. There isn't much support in Hungary for these pro-China policies beyond Orban's current government."