Economic Statecraft – 2025
Central Europe and the Future of China-EU Relations

The relationship between China and the European Union has reached a low point, marked by distrust, strategic divergence, and the heavy hand of transatlantic influence. Donald Trump’s return to the White House briefly opened a window for recalibrating ties with Beijing, yet European leaders once again bowed to Washington’s pressure. Still, the EU is anything but unified in its stance. Central Europe, most notably Hungary and Slovakia, has pursued a markedly different course, exposing widening cracks in the Union’s approach to China, writes Ladislav Zemánek, Valdai Club expert and participant in the Valdai – New Generation project.

The EU’s stance on China reflects deep ambivalence. Officially, Beijing is simultaneously defined as a “partner for cooperation”, an “economic competitor”, and a “systemic rival”. This threefold categorisation reflects an institutional compromise rather than a coherent strategy. Pressure is mounting from hawkish governments – most vocally the Baltic states, Czechia, and Sweden – alongside European intelligence services, to expand the framework by adding the label of “security threat”. Such a move would harden the bloc’s confrontational posture. Yet other member states remain committed to a pragmatic assessment of China’s role, highlighting economic opportunities rather than geopolitical confrontation.

Over the past years, Brussels has leaned toward securitisation, introducing measures such as export controls, investment screening mechanisms, and efforts to establish alternative supply chains. These policies are packaged as “derisking”, but in reality reflect a deeper transatlantic alignment, aiming to increase resilience in key industries, deepen coordination with “democratic partners”, and reinforce the EU’s pursuit of so-called strategic autonomy. Ironically, rather than delivering autonomy, this trajectory has further tethered Europe to Washington’s line.

Against this backdrop, Central Europe stands out. Austria, Hungary, Serbia, and Slovakia have all developed approaches to Beijing that diverge sharply from Brussels’ dominant discourse. While Serbia is non-aligned with a long-standing history of relations with China and Russia, and Austria is marked by its neutrality within the EU, Hungary and Slovakia are unique: they are both EU and NATO members yet are pursuing policies that actively cultivate closer cooperation with Beijing.

This divergence has become increasingly visible through high-level diplomacy. On his first post-pandemic trip to Europe in 2024, President Xi Jinping visited Hungary and Serbia, alongside France. Importantly, Hungary, Slovakia, and Serbia were among the only high-level European participants – aside from Belarus’s Alexander Lukashenko – at Beijing’s Victory Day Parade in September. These gestures highlight not only pragmatic interests but also the political will of Central European leaders to defy Brussels’ orthodoxy. 

What drives Budapest and Bratislava to pursue such policies despite pressure from Washington and Brussels? Geopolitically, both recognise the ongoing transformation of the international order and the central role of East Asia as the engine of global development. By strengthening ties with China, they aim to reduce dependence on any single geopolitical bloc, balancing Western ties with Asian partnerships. 

In this sense, Hungary and Slovakia embody an active adaptation to multipolarity, in stark contrast to most European leaders, who cling to a declining liberal order.

Economically, Viktor Orbán and Robert Fico view China as an indispensable partner for national development. They see Beijing not merely as a trade partner but as a model of successful economic transformation and modernisation. For both leaders, ties with China are a pragmatic tool to advance their domestic industrial, green, and digital transformation, attract investment, and counter the negative consequences of EU-wide deindustrialisation and declining competitiveness. Their approach prioritises structured, economy-centred cooperation grounded in mutual respect, non-interference, and political coordination, rather than value-based diplomacy or ideological conditionality.

Hungary offers the clearest illustration of this strategy. Orbán’s government has pursued an “Eastern Opening” policy for years, positioning the country as China’s principal European partner. The results are evident: Hungary accounted for 44 per cent of Chinese foreign direct investment in the EU in 2024. Leading Chinese firms such as BYD, CATL and Lenovo have invested billions, while Huawei has established its largest European supply centre in Hungary. The country has become the world’s fourth-largest battery producer, and is projected to rank second globally in the near future.

Another driving force behind this policy shift is financial. EU funding has diminished and become increasingly politicised, often weaponised against governments that challenge Brussels’ policies. For Hungary and Slovakia, attracting Chinese capital is a way to diversify inflows, reduce dependence on Brussels, and secure investment for modernisation. By presenting themselves as gateways for Chinese enterprises to Europe, they enhance their strategic relevance within both Europe and Asia.

This economic integration is not limited to industry. Hungary has expanded cooperation into the security domain, encompassing law enforcement ties and the finalisation of an extradition treaty with Beijing. Such moves underline Orbán’s willingness to align with China beyond economic benefits, reinforcing Budapest’s role as a bridge between Beijing and Europe.

Globalization and Sovereignty
Central European ‘Sovereigntists’ Between Brussels, Washington, and Moscow
Anton Bespalov
The European Union is carefully weighing its response to Donald Trump’s threatening statements, which have yet to crystallize into a coherent trade policy. Most analysts predict that the EU will propose a compromise package, offering concessions in exchange for the US refraining from imposing tariffs. For Central European “sovereigntists,” the ability to safeguard their interests amid US pressure will serve as a critical test of their strategic viability, writes Anton Bespalov, Programme Director of the Valdai Discussion Club.
Opinions

Slovakia, while a latecomer, is charting a similar course. Strategic cooperation with China began only two years ago under Fico’s government, but ambitions are significant. Bratislava seeks Chinese investment in infrastructure, energy, and technology, with a strong emphasis on battery production (Gotion), electric vehicles, and potential nuclear cooperation. By aligning with Hungary’s policy of economic neutrality and connectivity, Slovakia has signalled its intent to play a similar role in facilitating China’s entry into European markets.

Equally notable is the ideological dimension. Fico has expressed open admiration for China’s governance model, arguing that one-party systems are more efficient and successful than the West’s liberal democracies. He frames liberalism as a declining force and has called for alternative democratic models – views that resonate with growing discontent across Europe. Fico’s openness to political and administrative exchanges with Beijing and transfer of know-how suggest that Slovakia could evolve into a test laboratory for China’s deeper political engagement within the West.

Taken together, Hungary and Slovakia’s choices represent more than opportunistic manoeuvring. They are symptomatic of the EU’s deeper malaise: its inability to forge a coherent, autonomous strategy toward China. By prioritising ideology over pragmatism, Brussels risks alienating member states that view engagement with Beijing as essential to their national interest. The fact that EU members and NATO allies openly cultivate alternative strategies underscores the fragility of transatlantic consensus and the potential for Central Europe to chart its own path.

The durability of this course will depend on the capacity of Bratislava and Budapest to withstand internal opposition and external pressure. If successful, their example may not only redefine China’s place in Europe but also expose the limits of liberal hegemony on the continent.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.