Welcome to the 17th issue of the #CEEasia Briefing.
In this issue, we dissect the following topics:
- Fudan University campus in Hungary
- Lithuania departs 17+1
- Japanese Foreign Minister tours the CEE
- Romania and the EU send medical assistance to India
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1. Hungary caught between China and the EU
What’s going on? After Hungary signed an agreement to open a satellite campus of the Shanghai-based Fudan University in Budapest by 2024 at the beginning of May, the local authorities in the capital city, including the mayor Gergely Karacsony, decried the deal. This is after leaked documents indicated the project would leave Hungary with massive debt and was not negotiated in line with the transparency requirements of the European Union.
Digging deeper… The leaked government documents show that the construction of the campus would cost as much as USD 1.5 billion – more than Hungary’s annual higher education budget. Moreover, the vast majority of the financing would be covered by Chinese loans, and as it is common with Chinese investment practice abroad, Chinese companies, workers, and building materials would be used for the project. This might make Hungary one of the largest recipients of Chinese finance on paper, but in reality, it is exactly such projects that put a massive financial burden on Hungarian taxpayers.
This means… The Hungarian government seems unwilling to critically assess the project itself just as it is reluctant to join its EU allies when it comes to finding a common position towards China, namely its activities in Hong Kong and Xinjiang. Hungary has repeatedly blocked an EU statement on China’s new security law in Hong Kong this month – a similar step to that in March when Hungary criticized the EU for sanctioning China over human rights. Hungary’s opposition, however, did not leave other EU members at ease. Germany called the approach of Hungary incomprehensible and highlighted the necessity to hold a common line on China-related issues in the EU.
EURONEWS: Hungary agrees to open Chinese university campus in Budapest by 2024
SCMP: Fudan University’s planned Budapest campus runs into local opposition
Reuters: Hungary blocks EU statement criticising China over Hong Kong, diplomats say
POLITICO: Germany slams Hungary for blocking EU criticism of China on Hong Kong
2. Lithuania departs 17+1
What’s going on… Following the recent reports of Chinese intelligence attempts to recruit Lithuanian nationals, as well as the passage of a parliamentary resolution calling the Uyghur treatment ‘genocide’, Lithuania officially left the Beijing-led 17+1 platform. The Minister of Foreign Affairs Gabrielius Landsbergis called for an EU-wide 27+1 approach towards China.
Going deeper… Vilnius-Beijing relations have been deteriorating since 2019, especially after the August pro-Hong Kong protests, which were challenged by pro-Beijing counter-protests organized by the United Front Work Department and the Chinese embassy in Vilnius. The relationship took a further downward turn after the October 2020 election in Lithuania, which brought to power a coalition of parties that pledged to pursue a value-based foreign policy. And in March 2021, following Lithuania’s refusal to upgrade its representation at the February 17+1 summit, the parliament eventually agreed to leave the 17+1 framework, whilst establishing the Lithuania-Taiwan Forum and proposing to open a representative office in Taipei.
This means… Lithuania has now become the first country to leave the 17+1. Considering the lack of economic benefits the initiative brought to the Baltic region and a counterweight of their security reliance on NATO, other Baltic countries may soon follow, especially in the context of deteriorating US-China relations. Estonia is particularly likely to follow, considering the numerous reiterations of the country’s preference for the united 27+1 framework. Recently, a letter written by Estonian academic, cultural, and media circles warning of China’s influence activities was published.
Yet… This, however, does not mean that the China-CEE format will cease to exist. Hungary and the majority of the Balkan countries are unlikely to abandon the format any time soon, and neither is Beijing. Some analysts suggest that what may emerge instead is a sub-regional framework of a Balkan+1 kind. At the same time, Germany’s upcoming federal election may contribute towards building a genuine EU-wide approach towards China, as one of the frontrunners, The Greens, are pledging to take a stronger stance on both China and Russia, thus opening possibilities to reverse Merkel’s pragmatic approach.
CHOICE: So long, and thanks for all the fishy promises
POLITICO: Lithuania pulls out of China’s ‘17+1’ bloc in Eastern Europe
CHOICE: Taiwan and Lithuania’s Ties Grow Tighter
MERICS: Plamen Tonchev on 17+1’s past, present and future
3. Japanese Foreign Minister tours the CEE
What’s going on? During his tour of Central Europe, the Japanese Foreign Minister Motegi Toshimitsu met with ministers from Bosnia and Herzegovina, Slovenia, and the Visegrad Four. Motegi’s journey is motivated by preparations for the first official EU Indo-Pacific Strategy. The minister is seeking the support of EU member states for a tougher stance on China’s maritime expansion.
Going deeper… Support for CEEs appears to be essential for the formulation of a strategy that will correspond to Japanese interests. The Visegrad Four countries (Slovakia, the Czech Republic, Hungary, and Poland), which are also involved in the Chinese Belt and Road) generally have an increasingly critical view of China. The Czech Republic has the least positive perception of China. Surveys also show a tendency for feelings towards China to deteriorate in the past 3 years. At the same time, Japan is among the countries with the most positive perception among the public in the V4. It is this moment that the Japanese minister is trying to use to his advantage.
Also… During the meeting of the Ministers of Foreign Affairs of the V4+Japan format, in addition to talks about deepening cooperation in the Western Balkans and the field of science and technology, the topic of EU-Japan Connectivity was raised. A special feature was the discussion on the possible involvement of Japan in the Three Seas Initiative. Ministers also agreed on the need to respect international law and the open Pacific, as well as the need to denuclearize North Korea.
This means… Japan’s efforts to gain the support of the CEEs ahead of the EU-Japan summit and the finalization of the EU’s Indo-Pacific Strategy follow on from former Prime Minister Abe’s efforts to deepen cooperation. This would, on the one hand, strengthen mutual ties and also partially offset China’s growing influence. Although Japan is one of the major trading partners and investors in the CEE countries, the European Indo-Pacific Strategy, together with the involvement of the countries of the region, could contribute to improving the quality of bilateral relations with Japan at the strategic and political level. At the same time, it is questionable how and whether Japan will motivate the CEEs, or V4, to support a harder stance on China.
Nikkei Asia: Japan courts Eastern Europe with eye on EU Indo-Pacific strategy
Poland MFA: Statements of the ministers of foreign affairs of the Visegrad Group and Japan
CEIAS: Survey: Europeans’ views of China in the age of COVID-19
4. Romania and the EU send medical support to India
What’s going on? Several EU states have decided to provide medical support to India to help it to cope with the current outbreak of Covid-19. The emergency support highlights rising cooperation between India and many countries in Europe which has particularly increased over the past few years.
Going deeper… At the end of April, Romania’s National Committee for Emergency Situations decided to dispatch emergency help to India which consists of 80 oxygen concentrators and 75 oxygen cylinders. Other countries that also mobilized medical supplies assistance via the EU Civil Protection Mechanism include Austria, Belgium, Czechia, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Romania, Spain, and Sweden. In addition, the European Commission also announced it will allocate 2.2 million EUR in emergency funding to respond to the current outbreak in India. The funds will be deployed through the World Health Organization for a period of 6 months to manage the outbreak and strengthen Covid-19 testing capacity.
This means… The recent support for India alongside rising discussion of its economic significance across Europe demonstrates the country’s increasing importance for the EU and its role as a global power. This has been further reflected in the EU’s newly-published Indo-Pacific strategy that came to light on 16 April. Besides underlying the importance of Indo-Pacific as a region directly connected with issues of geopolitical competition, tensions on trade and supply chains as well as in technological, political, and security areas. The document also highlights the EU’s commitment to “explore deepening economic relations with India”, one of the foremost players in the Indo-Pacific.