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Business News/ News / Xi Builds Eastern European Ties as EU Hardens Line on Trade
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Xi Builds Eastern European Ties as EU Hardens Line on Trade

President Xi Jinping touted his nation’s ties with eastern Europe as a boon for the world’s No. 2 economy as he arrived on the final legs of a tour designed to promote China’s potential as a trade partner.

Xi Builds Eastern European Ties as EU Hardens Line on TradePremium
Xi Builds Eastern European Ties as EU Hardens Line on Trade

(Bloomberg) -- President Xi Jinping touted his nation’s ties with eastern Europe as a boon for the world’s No. 2 economy as he arrived on the final legs of a tour designed to promote China’s potential as a trade partner. 

Xi landed in Hungary on Wednesday after visiting France and Serbia during his first trip to Europe in five years. He’s due to sign more than a dozen agreements in Budapest covering rail, road and energy projects, with Prime Minister Viktor Orban’s cash-strapped government also looking to lock in financing for some of the investments. 

The Chinese president called the stronger links with the region a move toward global stability and development, according to an op-ed published in the Hungarian ruling party’s newspaper, Magyar Nemzet. It’s a “sign of the times and the general trend of development," Xi wrote, adding that Europe’s east provides a “helpful addition to China-Europe relations."

Read more: Hungary, China Agreed to Cooperate on Nuclear Energy: Minister

The comments coincide with growing tension between Beijing and Brussels, with Western European leaders accusing Xi’s government of flooding their markets with cheap exports that threaten jobs. Xi’s support for Russia despite its war in Ukraine has thrown the relationship further off balance. 

EV Plants

Hungary, a European Union member state, has gone all-in on economic links with China under Orban’s leadership, attracting an estimated €10 billion ($10.8 billion) in investments in recent years, mostly in the electronic vehicle industry. 

BYD Co., the Chinese EV giant, picked Hungary as the site of its first European car factory, an investment that had been coveted by other nations including Germany and France. Hungary is also a hub for car battery producers, with China’s Contemporary Amperex Technology Co. Ltd. currently building a €7.3 billion plant in the eastern city of Debrecen.

Orban has frequently clashed with the US and the EU over the rule of law as well as close ties to Russia and China, and has rejected Western pressure to reduce links with Beijing or to back a more critical approach on trade and human rights.

“Hungary’s position is firm: in order to maintain and improve competitiveness, both our country and Europe need to foster good relations with China," Balazs Orban, the Hungarian premier’s chief political adviser, wrote on X. “Instead of decoupling, we should aim for cooperation." 

Territorial Integrity

During his earlier stay in Belgrade, Xi bolstered economic and political ties with another country that’s thrown open its arms to Chinese trade and investment. He signed an agreement with his Serbian counterpart, Aleksandar Vucic, to boost their strategic partnership to a “community with a shared future in new era." Xi portrayed more trade with China as an inevitable direction of progress, even as the EU unleashes a salvo of probes into Beijing’s booming green sectors.

Serbia will boost exports to China with a free-trade deal, and expects infrastructure investment with some Chinese support worth as much as $27 billion. 

The two nations also back each other’s territorial integrity, Vucic said in reference to Serbia’s claim over Kosovo, a former province that split unilaterally in 2008. In return, Serbia backs Beijing’s policy on Taiwan, the Serbian president said.

“We could never get such an in-depth analysis of everything that is going on in the world from anyone, as we received from President Xi," Vucic said during a bilateral meeting, in which the leaders signed a raft of bilateral agreements. “The sky is the limit" for cooperation between China and Serbia, he added. 

Xi earlier completed a two-day trip to France, where he held talks with President Emmanuel Macron as the EU takes a tougher stance on China’s perceived national security risks. 

Xi on Monday also met with European Commission President Ursula von der Leyen, who told him that the EU is prepared to deploy all tools available to defend its economies if China fails to offer fair access to its markets. She drove home the EU’s position that heavily subsidized Chinese products such as electric vehicles and steel are flooding Europe. 

--With assistance from Jing Li, Philip Glamann, Jacob Gu, Josh Xiao, Li Liu, Jasmina Kuzmanovic, Ilya Arkhipov and Jenni Marsh.

(Recasts after Xi’s arrival in Budapest)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 09 May 2024, 12:43 AM IST
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