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Hungary and the Trade World War

Dénes Sályi 2019.05.28.

Since Donald Trump’s inauguration, the risk of a trade war between the USA and China has become a real threat. In fact, the escalating conflict indicates the first shots have already been fired. Regardless of how the conflict proceeds, there will be unavoidable consequences. Hungary’s geostrategic position largely determines its manoeuvring capacity as a member state of NATO and the European Union. The political elite and Hungarian society both view these ties as necessary for the future and generally avoid questioning them. On the other hand, in 2010, the Orbán administration launched its Eastern Opening policy in an effort to expand its economic relations with eastern – primarily Asian –countries.

What Type of Alliance Can Orbán and Trump Form?

When visiting Trump this May, Orbán and the President found several commonalities, and a few differences, among their policies. Aside from Russia, the most obvious difference was the ameliorating Hungarian-Chinese relationship. America believes this endagers its strategic interest and thus refuses to relieve pressure on Budapest.

Orbán in China: ‘Accept That Different Political Systems Can Be More Successful’

Orbán’s viewpoint can be understood, though not necessarily legitimized, from past experience.

On several occasions throughout its 1000 years of statehood, Hungary has been forced to belong to great powers or alliance systems that were defeated by their opponents, the most well-known instances being the two World Wars and the Soviet period after 1945.

There are both successful and unsuccessful examples of Hungarian leaders trying to strike a balance between two strong powers or alliances. Now, it seems Orbán is attempting to trace the boundaries of this policy within the system the country is tied to. This is why he seeks ties with China, Turkey, India, Russia, etc.

This ambition is acceptable if he can operate without risking the basic interests of his country. In the best-case scenario, the imminent hazards of an American-Chinese trade war can be avoided. However, the prolonged rivalry between the two superpowers (as they were recently deemed in a journal) can’t. It’s predicted that China will overtake the U.S. as the world’s largest economy in 15 to 20 years. Now, America is dedicated to slowing down this process as much as possible.

Foreign Minister: Good Cooperation with Huawei National Interest

Under such circumstances, Orbán should think twice about risking good relations with America. He needs to carefully consider the implications of making Hungary China’s Central European economic headquarters. The abundance of Chinese capital is attractive and China is certainly ready to mobilize it in Europe in order to increase its influence in the region. It’s important to contemplate, however, whether the financial construction being offered is beneficial enough for the countries targeted (including Hungary) to warrant any potential consequences.

Hungary and other Central European states mustn’t become the Trojan Horse of China.

It should also be taken into consideration that the number of Chinese citizens living in Hungary doubled to 20,000 in 2018 under the aegis of the state residency bond scheme. Some analysts fear that Hungary could be a future pawn in Beijing’s power game.

Controversial Residency Bonds Good Springboard for Chinese, Russians, Middle-Easterners

All in all, Orbán has to find a path that enables him to reap the benefits of doing business with China without violating Euro-Atlantic solidarity and cooperation within the EU. Without a doubt, it would be far easier for him if Western European politicians regarded their Central European counterparts as equals instead of naughty pupils who need to be disciplined.


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