Xi to Head for Friendly Ports in an Eastern Europe Disenchanted With China

When China’s leader, Xi Jinping, last visited Europe’s formerly communist east in 2016, the president of the Czech Republic hosted him for a flag-bedecked, three-day state visit and offered his country as an “unsinkable aircraft carrier” for Chinese investment.

That vessel has since sunk, scuppered by China’s support for Russia in the war in Ukraine and bitter disappointment over projects that never materialized. Also capsized are many of the high hopes that took hold across Eastern and Central Europe for a bonanza of Chinese money.

So when Mr. Xi returns to the region this week, after a visit to France, he will travel to Serbia and Hungary, two countries whose long-serving authoritarian leaders still offer a haven for China in increasingly turbulent political and economic waters.

“The Czechs, the Poles and nearly everyone else are really pissed at China because of the war,” said Tamas Matura, a foreign relations scholar at Corvinus University of Budapest. “But in Hungary that is not a problem, at least not for the government” of Prime Minister Viktor Orban, Mr. Matura said.

Nor is China’s Kremlin-friendly stand on the war in Ukraine a problem for President Aleksandar Vucic of Serbia, who, like Mr. Orban, has maintained warm relations with Russia and China while securing billions of dollars in Chinese investment.

In an interview this week with Chinese state television, Mr. Vucic gave a foretaste of the flattery that will dominate Mr. Xi’s visit: “There are thousands of things that we can and should learn from our Chinese friends,” the Serbian president said.

“Taiwan is China — full stop,” he added.

Milos Zeman, the Czech president who welcomed Mr. Xi in 2016, was replaced last year by a former senior NATO general, Petr Pavel. Mr. Pavel has angered the Chinese government by talking with the president of Taiwan, which Beijing claims as part of its territory, and saying in an interview that China “is not a friendly country.” Chinese investment in the Czech Republic has slowed to a trickle.

Meantime, Chinese money has poured into Hungary and Serbia, cementing close ties underpinned by a shared wariness of the United States.

China’s showcase infrastructure project in the region, a high-speed railway between Belgrade and Budapest, has been slowed by regulatory and other issues. Of the about 200 miles of track planned, only about 60 miles are operating after five years of work — a sluggish pace for a project that Beijing sees as a key part of the Belt and Road infrastructure program, Mr. Xi’s pet foreign policy initiative.

But promised Chinese investment in other projects has raced ahead, totaling nearly $20 billion in Serbia, according to its minister of construction, transport and infrastructure, and totaling nearly as much in Hungary, including loans, the terms of which are secret.

Ivana Karaskova, a Czech researcher at the Association for International Affairs, an independent research group in Prague, said Hungary and Serbia look to China “not only for economic gains but also to demonstrate to their domestic electorate that they pursue an independent policy.” That demonstrates to the European Union and the United States that “they are not the only game in town,” Ms. Karaskova said.

China, she added, “understands this dynamic” and Mr. Xi will use it to try to reverse a steady souring of opinion on China in Europe, both among ordinary citizens and in institutions like the European Commission, the executive arm of the European Union.

A survey last year of Eastern and Central European countries by Globsec, a research group in Slovakia, found that “negative perceptions of Beijing have soared,” particularly in the Baltic States and the Czech Republic. Even in Hungary, only 26 percent of those surveyed had a positive view of Mr. Xi, compared with 39 percent with a negative view. The rest said they were undecided.

But Hungary under Mr. Orban, no matter what the public thinks, has become a “safe political space” for Beijing, Mr. Matura said, and can be counted on to try to soften European Union policy on China and protect it from the fallout from the war in Ukraine.

The merging of economic and geopolitical interests is particularly pronounced in Serbia, which aspires to join the European Union but has balked at joining the bloc in imposing sanctions on Russia and frustrated E.U. efforts to broker a settlement over Kosovo. A former Serbian territory, Kosovo declared itself an independent state after a NATO bombing campaign, a status that Serbia, supported by Russia and China, has refused to accept.

Mr. Xi arrives in Serbia from France on Tuesday — the 25th anniversary of a mistaken strike by NATO warplanes on the Chinese Embassy in Belgrade during the 1999 bombing campaign. Three Chinese journalists were killed.

That incident, which many in China believe was not an accident, created a “strong emotional bond between Serbs and Chinese,” said Aleksandar Mitic of the Institute of International Politics and Economics in Belgrade.

As part of a series of government-sanctioned events in Belgrade ahead of Mr. Xi’s visit, Serbian communists on Monday unfurled banners reading “Welcome President” and “Kosovo is Serbia — Taiwan is China” outside the Chinese Cultural Center in Belgrade, built on the site of the bombed embassy. They demanded that the street outside the center be renamed “Chinese Victims of NATO Aggression Street.”

Hungary, too, has bristled at what it sees as bullying by Washington and Brussels, despite its membership in NATO and the European Union, from which it has received billions of euros in aid.

Mr. Orban’s main interest in China, however, is money and he hopes to turn Hungary, with help from Chinese investors, into a manufacturing hub for E.V.s, batteries and other new technologies.

In just the past two years, China has committed to invest more than $10 billion in Hungary, most of it in ventures related to E.V.s — at a time when the European Union, worried about China’s growing dominance of the sector, is investigating whether Chinese E.V. manufacturers are unfairly subsidized and should be penalized with high tariffs.

Those assembly lines will take years to build but, in the long run, will help protect Chinese E.V. manufacturers from any future efforts by the European Union to prevent China from dominating the market through tariffs.

Tariffs imposed on imported Chinese electric cars would not apply to those assembled in Hungary, which can ship goods duty-free across the E.U., though they could hit parts imported from China to Hungarian plants.

Unlike in most of Europe where governments regularly change — a democratic churn that can upset Chinese investment plans based on close ties to a particular leader — Mr. Orban and Mr. Vucic have both been in power for more than a decade and show no sign of going anywhere.

“The Chinese feel comfortable in Hungary,” Mr. Matura said. “The public might not be very fond of China but the government is.”

By visiting Hungary and Serbia, Mr. Xi, according to analysts, wants to show that while China may be down as an influential player in East and Central Europe, it is not yet out. And, they say, it indicates he has not given up on a Chinese diplomatic initiative known as 16+1, a grouping of China and formerly communist European countries built around Mr. Xi’s flagship Belt and Road program.

Furious about the war in Ukraine, three Baltic States have formally quit the grouping, which dates to 2012 and has been a cornerstone of Chinese diplomacy in Europe throughout Mr. Xi’s rule. Others, like the Czech Republic, Poland and Romania, technically remain as members but have largely disengaged.

“The big debate now among experts around the region is whether 16+1 is dead or just a zombie,” Mr. Matura said.