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China In Eurasia

A demonstrator holds a placard depicting Hungarian Prime Minister Viktor Orban as Chinese communist leader Mao Zedong during a protest against the planned Chinese Fudan University campus in Budapest in June.

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

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

As Hungary prepares for a tight election in April between Prime Minister Viktor Orban and the opposition's Peter Marki-Zay, the government's close ties with China are hanging over the campaign, Balint Szalai, my colleague from Budapest, and myself reported.

Finding Perspective: Close ties with Beijing have been a hallmark of Orban's foreign policy since he took the helm of the country more than a decade ago and the opposition has tried to push Orban's controversial China ties into the spotlight during the tightening election.

Marki-Zay has called for a review of Budapest's ties with China and also focused on a series of controversial China-backed ventures that have been green-lit under Orban, including a Chinese-funded university in Budapest, a railway to Belgrade, and the procurement of Chinese ventilators and vaccines during the pandemic.

Polls show that China itself isn't a wedge issue for Hungarian voters, but the corruption and debt concerns that are attached to the country's Chinese-projects have the potential to break through -- and that looks to be part of the opposition's strategy moving forward.

Orban's government appears to be aware of this. Despite having been one of China's more reliable partners in Brussels, Hungary has grown more silent of late and did not oppose the extension of the EU's Xinjiang sanctions in order to avoid the appearance of cozying up to Beijing amid the close election cycle, EU officials familiar with the issue who were not authorized to speak to the media told RFE/RL.

Why It Matters: Marki-Zay, a conservative small-town mayor who emerged as a unity candidate chosen by a coalition of opposition parties, represents what many say is the best chance to oust Orban in more than a decade.

The opposition candidate has so far been clever in his messaging by seeking to criticize Orban for agreeing to and mismanaging the Chinese-backed projects, rather than targeting Beijing itself. In fact, Marki-Zay has gone out of his way to say that he respects China and that Chinese investment is welcome in the country.

Stepping back, foreign ties look to already be a feature of the election campaign rhetoric in Hungary. Pro-Orban pundits have already stated that there will be "major U.S. interference" in the 2022 elections and have taken aim at Marki-Zay's time living in the United States as evidence that he represents foreign interests.

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● The controversial Chinese-funded Budapest-Belgrade railway is embroiled in controversy and an opposition Hungarian lawmaker has successfully sued for the release of the loan and construction contracts for the project. Meanwhile, Serbia began construction on a portion of the rail line last week.

● Chinese Foreign Minister Wang Yi held a video call with Peter Szijjarto, his Hungarian counterpart, where they warned of foreign interference and Szijjarto said that the government would not allow "outside forces" to influence Budapest's China-friendly policies.

Activists say the working conditions of the Vietnamese workers at the Chinese project are inhumane and they may have even been trafficked to work there.
Activists say the working conditions of the Vietnamese workers at the Chinese project are inhumane and they may have even been trafficked to work there.

Expert Corner: Fallout From Serbia's China Scandals?

Readers asked: "Serbia has been one of Beijing's closest partners in Europe, but recent environmental protests and a scandal over poor labor conditions for Vietnamese workers at a Chinese-owned factory point to problems ahead. What's next for Belgrade and Beijing?''

To find out more, I asked Stefan Vladisavljev, an analyst at the Belgrade Fund for Political Excellence: (For another look at this topic, keep scrolling down to the next section)

"Serbia has agreed to infrastructure projects that will be implemented by Chinese companies that are worth more than 7 billion euros ($7.8 billion). It doesn't matter who is in power, the current political elite or the next one, China will want its money back.

"It also has to be said that there is no actual pushback against China from the opposition parties. The criticism regarding environmental damage and Vietnamese workers came from local and civil society activists, but China reportedly has connections to Serbia's opposition leaders as well.

"The biggest challenge for the China-Serbia partnership is from abroad. If tensions between Beijing and the West escalate and Serbia finds itself in a position where it has to choose a side, that could jeopardize things."

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. The EU's Answer To China's BRI

Brussels is set to announce Global Gateway on December 1, a 300 billion-euro infrastructure initiative to respond to China's Belt and Road Initiative (BRI). RFE/RL saw a draft document of the plans and I gave an early look at the EU project here.

The Details: Global Gateway will aim to rely on public investment, as well as the private sector, to build infrastructure intended "to strengthen digital, transport, and energy networks" around the world and invest in "projects that can be delivered with high standards, good governance, and transparency."

The 300 billion-euro ($340 billion) sum will be invested by 2027 and leverage resources from the EU, European financial institutions, development banks, and member states from the bloc.

A big focus of the project will be in presenting Global Gateway as an alternative program that the draft says will focus on providing an "ethical approach" to infrastructure financing that is "values-based" and relies on fair and open competition.

Focus On China: The EU plans do not mention the BRI or China explicitly, but European Commission sources told RFE/RL that Global Gateway is meant to counter China's infrastructure initiative.

The stepped-up plans from the EU come as many Western countries are looking to play a larger role in funding infrastructure across the developing world and roll back the BRI, which has become an important strategic tool for Beijing to extend its influence since its launch in 2013.

But the BRI has also been undercut in recent years by questions regarding the commercial value of many of its projects, growing worries over murky lending practices, and concerns over the initiative being a vehicle for Chinese control.

Activists clash with police in Almaty, Kazakhstan, at a protest against the rising influence of China and increasing food prices in July.
Activists clash with police in Almaty, Kazakhstan, at a protest against the rising influence of China and increasing food prices in July.

With that in mind, Brussels is hoping that it can offer a more high-quality alternative for countries around the world and help propel the EU to the forefront of efforts to fill the developing world's infrastructure needs.

The EU project is not without its own question marks, as I explore here, but it has the potential to make an impact, according to several analysts that I spoke with.

"The BRI raised the stakes and made Western policymakers more aware of the strategic consequences of not being involved in infrastructure," Jonathan Hillman from the Center for Strategic and International Studies told me. "Beijing has also created an opportunity for higher-quality alternatives through its own mistakes. It's hard to imagine Global Gateway existing if it wasn't for the BRI."

2. Interpol's New Bosses

Interpol elected representatives from China and the United Arab Emirates to the global police agency's leadership on November 25, raising fears that the organization could end up under the sway of autocrats.

Setting the Stage: Human rights groups and Western lawmakers told me ahead of the election that China's Hu Binchen, who was elected to Interpol's executive committee, and the U.A.E.'s Major General Ahmed Naser al-Raisi, who was elected as Interpol's president, could set a precedent and send a signal to other authoritarian governments to misuse the police organization to go after political opponents.

Raisi stands accused of torture and has criminal complaints against him in five countries and Hu, an official at China's Public Security Ministry, is backed by the Chinese government, which stands accused of using Interpol's global network to disappear its citizens and target dissidents, particularly Uyghurs.

Interpol says it refuses to be used for political ends and insists that the issuing of red notices, the electronic arrest warrant for the organization's most wanted, is strictly monitored.

But activists and human rights groups say that Interpol's member governments continue to use the agency for their own ends and that this could grow worse under new leadership.

China has a documented history of abusing the red-notice system to go after dissidents and target Uyghurs.

One of the more recent cases is Yidiresi Aishan, a Uyghur activist living in Turkey who was detained in Morocco in July under a red notice. Following outcry over his arrest, Interpol withdrew the red notice, but Aishan is still on trial in Morocco, where he faces extradition back to China.

3. Serbian Pushback

Environmental protests targeting a Chinese-owned factory and a scandal involving abusive conditions for Vietnamese workers hired by a Chinese construction company mark an unexpected wave of resistance for Beijing's interests in Serbia, my colleagues at RFE/RL's Balkan Service reported.

What You Need To Know: As noted earlier by Vladisavljev, China enjoys a warm relationship with Belgrade, as well as working contacts with Serbia's opposition. The two events, however, show the difficulties that exist when dealing with other aspects of society.

Around 500 Vietnamese workers are building a massive tire factory in Serbia, which when completed will be the first of its kind in Europe. But activists say the working conditions of the laborers are inhumane and they may have even been trafficked to work on the $900 million construction project.

The Serbian government rejects the claims, but recent evidence put forward by activists, including footage that was broadcast on television, shows tough conditions and many workers saying their passports and wages have been withheld.

Environmental protests, meanwhile, erupted against two new laws that could give free rein to foreign mining companies in the country, including China's Zijin mining company.

Serbian protesters rally on a bridge in Novi Sad against amendments to the referendum and expropriation law on November 27.
Serbian protesters rally on a bridge in Novi Sad against amendments to the referendum and expropriation law on November 27.

Across The Supercontinent

Kazakhstan's Picket: Police in Kazakhstan's largest city, Almaty, have detained six protesters who were demanding the release of relatives they say are being illegally held in China, RFE/RL's Kazakh Service reported.

The demonstrations, which call on the Kazakh authorities to do more to protect ethnic Kazakhs who have been caught up in the Chinese crackdown in Xinjiang, have been ongoing for months and protesters have been periodically detained.

Slap On The Wrist: A court in Montenegro ruled that the China Road and Bridge Corporation (CRBC) will have to pay a 200,000-euro fine ($225,300) for environmental damage caused during the construction of a massive highway project in the country, RFE/RL's Balkan Service reported.

Downgraded: China downgraded diplomatic relations with Lithuania on November 21 over the opening of a Taiwanese office in Vilnius. Since then, Beijing has launched a tough diplomatic and propaganda campaign against Lithuania, but it has been met with resistance.

A delegation from Lithuania, Estonia, and Latvia is currently on a trip to Taipei and met with Taiwanese President Tsai Ing-wen, who said she wants to expand ties with the Baltic states.

Winds Of Change: Kazakh President Qasym-Zhomart Toqaev said in a recent speech that bilateral trade with China grew by 5 percent in 2020 and was over $15 billion. After the announcement, he said, "as a Chinese saying goes: When the winds of change blow, some people build walls & others build windmills."

Warning Berlin: With the Greens' Annalena Baerbock as Germany's new foreign minister and a coalition government in Berlin that has unveiled a tougher agenda on China, Beijing seems worried.

China issued a warning to Germany, telling the new government not to interfere on matters like Taiwan, Hong Kong, and Xinjiang, and urged it to stick to previous friendly policies followed under Angela Merkel.

One Thing To Watch

U.S. President Joe Biden will be hosting a virtual summit for democratic countries on December 9-10, and China and Russia aren't happy they were snubbed from the invite list.

In a rare joint op-ed, the ambassadors of China and Russia to the United States called the U.S. plan "an evident product of its Cold-War mentality" and that the event would "stoke up ideological confrontation and a rift in the world, creating new 'dividing lines.'"

The article then went on to claim that both China and Russia were democratic and that "it has been proved that the whole-process democracy works in China, and works very well."

Beyond the odd claims in the article, it points to a growing trend of Beijing and Moscow moving in tandem when it comes to pushing back against U.S. rhetoric about democracy and human rights.

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

Until next time,

Reid Standish

If you enjoyed this briefing and don't want to miss the next edition, subscribe here. It will be sent to your inbox on Wednesdays twice a month.

Visitors walk past a wall with a map showing the species of peony in Belt and Road Initiative countries at a horticultural exhibition at the Beijing Expo 2019 in Beijing.

The European Union will invest some 300 billion euros ($340 billion) on infrastructure and other projects as part of Global Gateway, a new venture from the 27-country bloc designed to compete with China's vast and influential Belt and Road Initiative (BRI).

A draft proposal from the European Commission, seen by RFE/RL, outlines Brussels' plans for the ambitious initiative, which will rely on public investment and the private sector to build infrastructure intended "to strengthen digital, transport, and energy networks" around the world and invest in "projects that can be delivered with high standards, good governance, and transparency."

The plans for Global Gateway, which will be revealed on December 1, seek to mobilize a sum up to $340 billion that will be invested by 2027 and leverage resources from the EU, European financial institutions, development banks, and member states.

The draft document goes on to add that the initiative will focus on building projects like fiber-optic cables, transport corridors, and "clean-power transmission lines" that will offer "attractive investment and business-friendly trading conditions, regulatory convergence, [standardization], supply-chain integration, and financial services."

European Commission President Ursula von der Leyen (bottom right), European Council President Charles Michel (top right), German Chancellor Angela Merkel (bottom left), French President Emmanuel Macron (bottom center), take part in a videoconference with Chinese President Xi Jinping.
European Commission President Ursula von der Leyen (bottom right), European Council President Charles Michel (top right), German Chancellor Angela Merkel (bottom left), French President Emmanuel Macron (bottom center), take part in a videoconference with Chinese President Xi Jinping.

The stepped-up plans from the EU come as many Western countries are looking to play a larger role in funding infrastructure across the developing world and roll back the BRI, which has become an important strategic tool for Beijing to extend its influence since its launch in 2013.

Under the guise of the BRI, China has channeled hundreds of billions of dollars into foreign infrastructure, boosting trade and clearing the way for it to forge political and economic links around the world, from Latin America to Africa and Central Asia.

The EU plans do not mention the BRI, Chinese leader Xi Jinping's signature foreign-policy project, by name, but Global Gateway is framed as an alternative program that the draft says will focus on providing an "ethical approach" to infrastructure financing that is "values-based" and relies on fair and open competition.

"Global Gateway will invest in international stability and cooperation and demonstrate how democratic values offer certainty and fairness, sustainability for partners, and long-term benefits for people around the world," the draft document states.

Response To The BRI

Launched amid great fanfare by Xi, the BRI has since been supported by international organizations and more than 150 countries -- including many in the West -- as it has expanded in scope from ports, pipelines, and roads to include digital technology, health care, and green energy.

But a combination of growing disillusionment among partner countries with the resulting projects, growing global demand for more investment, and increased unease about the strategic implications of the BRI have opened the door for alternatives to emerge.

"Brussels is trying to differentiate itself from what China has been providing," Jonathan Hillman, the director of the Reconnecting Asia Project at the Center for Strategic and International Studies (CSIS), told RFE/RL. "When it comes to environmental issues, transparency, and sustainability, the EU has a strong and attractive brand that it can leverage."

The BRI has also been undercut in recent years by questions regarding the commercial value of many of its projects, growing worries over murky lending practices, and concerns over it being a vehicle for Chinese control.

Debt and transparency concerns have also shrouded Chinese-funded projects around the world, from Sri Lanka to Pakistan and Uganda to Kyrgyzstan.

Beijing-backed ventures in Hungary, such as a potential Chinese university in Budapest funded by a $1.5 billion loan and $1.9 billion borrowed for a railway connecting Budapest to Belgrade, have faced public backlash over corruption accusations and a lack of transparency over the details of the loan agreements.

Across the Balkans, Chinese projects have been linked to environmental damage and poor labor practices, as well as debt concerns, such as a controversial $1 billion Chinese-funded highway in Montenegro.

According to the draft, Global Gateway has a world-spanning focus, but a European Commission official who was not authorized to speak to the media told RFE/RL that the initiative would prioritize Africa and Asia for investment. The EU plan will also aim to focus on investing into areas around digitalization, health, climate, energy, and transport.

"The BRI raised the stakes and made Western policymakers more aware of the strategic consequences of not being involved in infrastructure," Hillman said. "Beijing has also created an opportunity for higher-quality alternatives through its own mistakes. It's hard to imagine Global Gateway existing if it wasn't for the BRI."

Coordinating Western Plans

The draft also mentions that Global Gateway will aim to align with other infrastructure plans adopted at the Group of Seven (G7) summit in the United Kingdom in June, including U.S. President Joe Biden's Build Back Better World (B3W) initiative.

The U.S. plan aimed to help narrow the global need for infrastructure by working with countries like Australia, India, and Japan, as well as the new EU initiative.

But the biggest obstacle will be how Brussels and its partners can leverage the financial muscle to rival Beijing for infrastructure investment, Andreea Brinza, vice president of the Romanian Institute for the Study of the Asia-Pacific, told RFE/RL. "The biggest obstacle may be the cost of implementing projects [with high standards]," she said. "Developing countries really need infrastructure, but if it's too expensive they can't afford it [and] there will also be profitability issues."

Taken together, the United States, Europe, Japan, and others have far outspent China in terms of funding in recent years as the pace of investment through the BRI has slowed down since reaching a peak in 2017.

Chinese President Xi Jinping raises a toast after a speech at the welcome banquet for leaders attending the Belt and Road Forum in Beijing in April 2019.
Chinese President Xi Jinping raises a toast after a speech at the welcome banquet for leaders attending the Belt and Road Forum in Beijing in April 2019.

How Global Gateway can be coordinated with other programs like B3W and leverage the necessary funds remains to be seen, but the project has high-level backing in Brussels and the $340 billion figure marks a substantial increase from an earlier amount attached to the initiative.

"The EU's biggest challenge will be to find the perfect combination of quality infrastructure and affordable prices," Brinza said. "If the EU [can] blend high standards with affordable costs, it will definitely succeed, especially considering that the BRI is passing through a phase of disappointment and criticism."

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About The Newsletter

In recent years, it has become impossible to tell the biggest stories shaping Eurasia without considering China’s resurgent influence in local business, politics, security, and culture.

Subscribe to this dispatch in which correspondent Reid Standish builds on the local reporting from RFE/RL’s journalists across Eurasia to give you unique insights into Beijing’s ambitions and challenges.

The newsletter is sent on the first and third Wednesdays of each month.

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