Since 2013, when Chinese President Xi Jinping launched the Belt and Road Initiative (BRI), the world has witnessed an expansion of Chinese investments and influence across the globe. This has served Chinese interests by enhancing their economic potential and creating close political and diplomatic ties with beneficiary states. BRI has been operated in Central and East Europe (CEE) through the “16+1” framework. This stands for close cooperation between the CEE countries and China in the areas of infrastructure development, policy coordination, trade, finance, and cultural exchange (Pavlicevic 2019).¹ In a period from 2015 to 2022, seventeen CEE countries signed the agreement, while three members; Lithuania, Latvia, and Estonia withdrew. Their withdrawal was elaborated by concerns related not only to the rising economic influence but controversial political influence as well.² The same concerns have been shared by Brussels as well. The situation culminated with Ursula von der Leyen, president of the EU Commission, announcing a “de-risking” policy of strengthening economic independence from China (Fleck et al 2024).

These developments have attracted the attention of many politicians, think tanks, and scholars who have analyzed matters related to Chinese investments in the region from several main perspectives. The most common perspective is describing the spread of Chinese influence as a potential threat. For example, Khaze and Wang (2021) argued that the increase of Chinese influence might postpone or prevent some countries’ EU membership. In the same vein, Cotella and Berisha (2021) elaborated that the influx of Chinese investments might erode EU conditionality by providing relatively easy access to financing without the obligation to follow strict regulations. Countries in the Western Balkans are aspiring candidates for EU membership and they must comply with the democratic and institutional practices dictated by the EU. However, their close collaboration with Beijing sometimes contradicts with EU policies, ultimately harming their accession process. Some scholars, such as Krstinovska (2022) highlighted corruption, the lack of transparency, and potential influence on local political decision-making. Local politicians welcome Chinese investments in large infrastructure projects and contract them by using obscure and potentially corrupt procedures (Krstinovska 2022). Contrary to these threat-based perspectives, another common approach has been represented by scholars such as Pavlicevic (2018), Rogelja and Tsimonis (2020), who argue that Chinese influence in the region can not be deemed threatening to the EU, as the amount of investments is significantly lower than the EU investments (Pavlicevic 2018; Rogelja and Tsimonis 2020).³

These approaches provide important insights related to the spread of Beijing’s influence in the “European backyard.⁴ However, they present the problem through a narrow lens, understanding Chinese power as a simplified translation of economic investments into political influence, as comparable to the amount of investments, or through the potential of power switching from Brussels to Beijing. Furthermore, they commonly label all Chinese investments as economic investments/ economic projects, without distinguishing the type of investments. This study contends that a distinction should be made between infrastructure projects and company mergers, acquisitions, and greenfield investments.⁵ Large infrastructure projects are often deemed controversial for the fact that they increase the debt burden of the beneficiary state. Contrary to this, acquisitions, mergers or greenfield investments do not lead to higher indebtedness; however, they may include advanced, high-technology, sectors characterized as critical under the European “economic security policy” (CEPR 2024).

Studies adopting a broader view of Chinese power in CEE rely on the structural power framework. Structural power is defined as “the capability to shape and determine the structures, rules, and institutions within which other states operate (Keukeleire 2003; Pavlicevic 2019).” Pavlicevic, who adopted this approach, argued that Chinese structural power—the power to shape political choices in the Balkans—has been blocked by the European structural power exercised through diplomatic pressure in the Balkans. Although this approach provides a more broad perspective on Chinese investments, it lacks explanatory power in elucidating the extent of Chinese influence in the region, especially in instances where European geopolitical interests were jeopardized.⁶

To understand the extent as well as the limitations of Chinese influence in the region, the study contends that Chinese influence should be understood broadly, through the lens of structural power, and it should be further examined through various power categories. The study will focus on examining the extent and limitations of Chinese structural power in Hungary and Serbia. They are chosen because they are the biggest recipients of Chinese investments in the region and they proved to have the closest relations with Beijing. Most European countries showed to have reservations about China’s growing influence, especially after the reiterated China-threat rhetoric from Brussels and the announcement of a de-risking strategy (Szunomar 2024). In contrast, Hungary and Serbia have been expanding their cooperation with Beijing across different sectors, from infrastructure projects, and high-technology sectors to security cooperation. This approach came with the cost of deteriorating relations with Brussels. In the case of Hungary, the European Commission penalized it by freezing its cohesion funds (European Parliament 2024), while Serbia was criticized for jeopardizing its EU accession process (Mitrović 2023).

Structural power of China in Central and East Europe

The concept of power in international relations is often understood tangibly as hard power, or more specifically, military power. Alternatively, it is defined intangibly as soft power, or the attractiveness of a country’s ideas, norms, values, and culture. Economic investments, including economic aid and developmental assistance, are often seen as means of hard power as they may coerce or induce a country to do something normally it would not do.⁷ This study contends that viewing Beijing’s investments in CEE region, especially Hungary and Serbia, in this manner, i.e. hard/soft power lacks sufficient interpretative potential.

In countries such as Montenegro, where 17% of its external debt is owed to China, and installment rates are beyond manageable level, there are rational fears of a “debt trap.”⁸ In this respect, viewing Chinese power as potential hard power may be justified (Pavlova 2024). However, the situation in Serbia and Hungary is quite different. They still have a manageable debt level to China, reducing the possibility of Beijing leveraging economic investments to coerce them into political, diplomatic or other forms of obedience.⁹ Furthermore, even if Beijing succeeds in coercing/ inducing them to follow its politico-diplomatic agenda, Beijing’s power can not translate into a military power.¹⁰

For these reasons, this study contends that the scope and limitations of Chinese influence in the region can be better described through the lense of structural power. Strange defines structural power as the power of actors to create frameworks within which they have to operate; in other words, “the power to decide how things shall be done. (Strange 1988)” Structural power can be gained through asymmetrical economic interactions when an economically dominant state gains control over the institutions of a dependent state. This is achieved when economic influence spills over to other spheres within a dependent state and translates into influence over them. A dominant state can seek influence purposely, or unconsciously, by simply “being there.”

Strange includes four spheres that present sources of structural power: security, production, finance, and knowledge structures. A security structure signifies the power to offer or deny security. A production structure means the power to create rules and arrangements that regulate the production and accumulation of wealth. A financial structure signifies the power to create and allow financing through credit, and a knowledge structure signifies the power to control access to information and channels through which it is communicated. Strange’s structural power theory, firstly published in 1980s, was one of the most cited theories within the International Political Economy (IPE). It has been especially utilized for analyzing a power/influence of countries and/or multinational corporations on an international level.

However, to make Strange’s theory more adequate on a regional level, the categories of power should be modified.¹¹ For that purpose the study combines it with Copenhagen School’s view of power. It sees power as pertaining to those who can dictate “the rules of the game” in the economic, political, environmental, social, and military spheres.¹² Similar to Strange’s definition, the economic sphere refers to the power to determine the rules and frameworks within an economic sector. Political reflects protection against threats to the organizational stability of social order, that is, it pertains to a state’s sovereignty. The environmental sphere includes various environmental issues. Societal pertains to identity; that is, matters evolving around different identity groups.¹³ The military reflects the traditional aspects of security, achieved through military means and alliances.

This study proposes analyzing Chinese influence in Hungary and Serbia by focusing on the application of structural power theory in three dimensions; economic, environmental, and politico-diplomatical. The economic dimension will examine the type, size, and socio-economic impact of Chinese investments. The environmental dimension will analyze the instances when EU-dictated environmental rules were dismissed in favor of cooperation with Beijing. Politico-diplomatic dimension examines instances when Budapest/Belgrade favored political/diplomatic relations with Beijing over their commitments/ requirements from Brussels. The societal dimension will be omitted as the size of the Chinese minority in both countries is relatively small, and as mentioned before, the military dimension will be omitted as China can not provide traditional military security in the region.¹⁴

Chinese relations and presence in Hungary

After the Cold War, Hungary and China restored their relations in 2003, when Hungary started reapproaching Beijing.¹⁵ China has been deemed important, and collaboration with it has been promoted by each Hungarian government since 2003. This became especially true after 2010 when Victor Orban became the Prime Minister and announced the “Eastern Opening” strategy. This strategy included increasing exports and attracting foreign investment from the rising economies in the East. China plays a particularly important role in this strategy, and cultivating good diplomatic and political relations with China is deemed a precondition for good economic relations.

Hungary was the first country to support the “16+1” framework. The first summit between CEE and China took place in Budapest in 2011, and the framework became institutionalized at the 2012 Warsaw Summit. The initiative was welcomed with overwhelming enthusiasm in Budapest, and some investments proved to be quite important for the Hungarian economy, whereas others were delayed or failed.

Scope of its activities include producing IT equipment, building 5G network, building infrastructure for energy systems and infrastructure for electronic vehicles (EVs). ZTE’s investments mail include telecommunication infrastructure and 5G equipment. Singed a deal to build an EV factory in Szeged.²⁵

As shown in Table 1, Chinese investments in Hungary evolved in several predominant sectors: electronics and IT, telecommunications, chemicals, the automotive industry, and infrastructure development. These investments are not only significant because of their monetary value but also have a wider socioeconomic impact. Companies such as the Bank of China, Huawei, ZTE, Lenovo, and Wanhua have their regional headquarters in Hungary, which also function as administrative and logistics centers for the entire European market. Furthermore, these companies, together, employ more than 7,000 Hungarian employees.

Chinese investments were significant because they saved businesses from bankruptcy and contributed to the revitalization and development of the whole industry (Völgyi and Lukács 2021). For example, Huawei purchased Comlink Electronics and invested in cable production. Lenovo has been supplying Europe and nearby markers from its Hungarian logistic center. Wanhua saved Borsod Chem from bankruptcy and restarted production. In the same vein, several Chinese companies saved the Hungarian automotive sector by providing necessary finance and technological innovations. Hungary has a long tradition of automobile production. However, it lags significantly behind other European countries in terms of technology and innovation. Yangfeng Automotive Interiors purchased Hungarian Johnson Controls and provided the necessary investments (Matura 2020). Similarly, the Chinese company, CRRC, created a joint venture called Electrobus Europe with Ikarus, a Hungarian bus company that came close to bankruptcy (Xinhua Silk Road Database 2024). BYD built a new electric bus factory in Komarom, and currently, it builds a plant of commercial EVs in Szeged. In addition, CATL started implementing its battery production in Debrecen. These batteries will be used to support the production of BYD’s EVs.

In addition to company acquisitions and joint ventures, controversial investments related to infrastructure development have also taken place. Three major infrastructure developments—high-speed railway development from Liszt Ferenc airport to central Budapest, the V0 railway line circulating through Budapest, and the Belgrade-Budapest Railway Upgrade (BBRU) were conducte d.²⁶ The first two projects failed because they were deemed economically unfeasible, and violated the EU public procurement law.²⁷ However, the BBRU project is currently in progress. The Serbian part of the project is expected to be completed by the end of 2024, while the Hungarian part which was initially delayed because of incompatibility with EU laws, is expected to be completed by the end of 2025. The cost of the project was approximately EUR 3.2 billion EUR, with the Hungarian portion amounting to 1.68 billion EUR. The project is financed through a loan from the Chinese Exim Bank (85%) and Hungarian state-owned railway company MAV (15%). This has raised many concerns owing to the amount of loans and exposure to foreign debt.²⁸ The repayment period is estimated to be 20 years; however, the details of the contract are not publicly known. Therefore, when the repayment period should commence is unknown. Furthermore, the project has been criticized to be economically unfeasible because there are few passengers on the route. The project is perceived to serve primarily Chinese interests, as it will bring Chinese-manufactured goods to Central Europe faster and more efficiently. It is the final part of the route which is supposed to connect the Chinese-run Piraeus port in Greece to Budapest (Central Europe).²⁹

The last partnership agreement, signed in April 2024, includes a comprehensive collaboration across sectors from electric vehicle production, batteries, nuclear energy, and infrastructure to agreements enabling Hungarian small and medium- sized businesses to export agricultural produce to China. The agreement, also, includes cooperation in media, strengthening tourism, and even law enforcement (The State Council. The People’s Republic of China 2024).³⁰

Although the strategic cooperation agreement was signed only recently and its effects are yet to be seen, it is visible that the relationship between the two countries extended beyond economic investments. As demonstrated in Table 2. below, there were many instances when Budapest showed political/diplomatic support to Beijing at the expense of relations with Brussels. In 2015, Hungary was the first country to imitate the collaboration with Beijing through BRI. In 2016, Hungary blocked a joint statement by the EU condemning China’s actions in the South China Sea. In 2018, when EU ambassadors to China formed a report condemning BRI, the Hungarian ambassador refused to sign. Some other examples include; contracting Huawei to build its 5G network when the rest of Europe blocked the company from participation in the 5G network. Other examples include Hungarian reactions to Chinese policy towards Hong Kong in 2019 and 2021, utilizing Sinopharm vaccinations in 2020 and 2021 when the rest of Europe showed reservations, hosting an official visit with an official sanctioned for his role in the Xinjiang genocide, opposing EU’s stance towards Taiwanese membership in the World Health Organization (WHO), and expressing official support for China-proposed plan for the peace in Ukraine. The most recent diplomatic actions disproved by Brussels include signing a security cooperation agreement with Beijing, and meetings with Xi in Beijing and Putin in Moscow.

Chinese relations and presence in Serbia

Although Sino-Serbian relations persisted during the former Yugoslavian period,⁴³ they became closer only after the early 2000s. In 2009, they signed the Agreement on Economic and Technical Cooperation in infrastructure. This agreement was significant because it initiated a strategic partnership between the two countries and encouraged investment in the energy, transportation, agriculture, telecommunications, finance, and cultural exchange sectors. Shortly after the agreement was reached, Serbian President Boris Tadic included Beijing among the “four pillars of diplomacy.” It represents the four most important points of reference in Belgrade’s international relations: the US, the EU, Russia, and China. This evidences the importance of relations with Beijing, including the fact that Serbia joined “16+1” initiative and BRI.⁴⁴ In 2016, during President Xi’s visit to Belgrade, cooperation between the two countries was alleviated through the Comprehensive Strategic Partnership, the highest possible form of partnership a country could have with China (Csapó 2021).

Table 2 overviews the most prominent Chinese projects in Serbia.⁵⁹ They are focused on the following major sectors; infrastructure/ transportation, energy, metal, mining, tire and automobile industry, and textile industry. Infrastructure/ transportation projects are financed by the Republic of Serbia and by Chinese loans. They are large-scale projects, and in many cases, the EU rejected their financing because of feasibility problems. However, they will contribute to the overall development of the Serbian transportation network, and they are crucial for China as Chinese-made goods would be transported faster towards Central Europe.

In the case of energy, the construction of the Kostolac plant was financed through a Chinese loan with significant risks to Serbia, as it agreed to a possible arbitration in Beijing according to Chinese laws. Furthermore, it completely ignored EU-directed environmental standards and failed to consult neighboring Romania, which will inevitably share environmental costs.⁶⁰ In the case of the mining and metal industries, both countries share interests. From a Serbian perspective, Chinese investments meant that 10, 000 jobs would be protected. This would ensure social peace and regional development. In return, China gained access to Serbian raw materials, which is essential for supporting the massive production of automobile parts, electronics, and other products in China. With similar interests, China has invested in Serbia’s automotive and textile industries. It received an inexpensive labor force and close access to the European market. For Serbia, this meant that locals would be employed and the incumbent government would augment its popularity.

Investments in digital technologies are less represented; however, Huawei made a major investment in digital infrastructure and surveillance systems. This project, called “Smart Cities,” includes the installation of high-definition cameras in public spaces and facial recognition systems. It is supposed to enhance public safety by alerting the police forces about traffic incidents, floods, natural disasters, etc. However, it has been criticized by the EU and activists as it may be used to suppress civic liberties. Huawei has been, also, working on plans to develop 5G network in cooperation with Telekom Serbia. However, in 2020, Serbia made an agreement with Washington to prevent the supply of 5G technologies from untrusted vendors. The provision of untrusted vendors, even though not indicating Huawei directly, has been understood as an exclusion of Chinese vendors (Bojić et al. 2021).⁶¹

The cooperation between Serbia and China expanded into the politico- diplomatic sector as well. Serbia was one of the first countries to endorse BRI despite criticism and increased suspicions of China’s intentions from the side of Brussels. Instances where Belgrade showed clear politico-diplomatic support of China and refused to join European actions include; refusal to condemn Chinese actions in the South China Sea in 2016 and 2024, demonstrating support for China’s policy on Hong Kong despite strong condemnation from the European side (2020, 2024) and refusal to condemn human rights violations in Xinjiang province (2020).

Other instances include signing agreement that includes military cooperation as well. The two countries conducted joint police exercises strengthening counterterrorism capabilities, education programs, and purchasing military equipment such as military drones. laser-guided missiles and FK-3 air defense surface-to-air missile system. FK-3 was delivered to Belgrade in 2022 amidst serious geopolitical tensions because of the Ukraine war. Some other instances include Belgrade’s turn to Beijing for assistance during the coronavirus declaring that Europe lacks the solidarity it claims to represent. Most recent cases include aligning with Beijing and Moscow in their views of the Ukraine war, refusing to sanction Russia, and demonstrating support for the China-proposed peace plan.

Analysis of Chinese Structural Power in Hungary and Serbia

Chinese collaboration with CEE countries, under the platform “16+1,” has been carefully observed in Brussels. This region has been considered a “European backyard,” a region less integrated into European institutional practices than Western Europe. As such, it is more prone to accept the lucrative deals proposed by Beijing at the expense of long-term relations with the EU. This is especially true for non-member states, which are not obliged to follow the strict regulatory practices of member states. For these reasons, the EU has warned of several problems related to Chinese projects in the region, ranging from the potential debt trap and lack of transparency to trading economic power with political influence.

The purpose of this study is to examine Chinese influence in the region through the lens of structural power and identify the spheres and limitations of its influence. For this purpose, the study combined Strange’s theory of structural power with the Copenhagen School’s view on power, focusing on economic, environmental, and politico-diplomatic dimensions. The study focused on the case studies of Hungary and Serbia and examined Chinese structural power in each of the above-mentioned dimensions.

The economic dimension of structural power refers to the power to determine the frameworks within the economic sector. In Hungary, Chinese investments have concentrated in the automotive sector (including EV and battery production), electronics, IT and telecommunication technology, and infrastructure development. In contrast, Chinese investments in Serbia have prioritized infrastructure/transportation, energy, metal, mining, automotive industry (excluding EVs), tire and textile industries. There are several reasons behind such a strategy. Advanced high-tech digital technologies, EVs, and battery production are deemed critical under the EU economic security policy and China is deemed an untrusty vendor and a Western rival. Cooperation with Hungary, as an EU-member state, allows Beijing to label goods produced by BYD, Huawei, and CATL as products made within the EU, avoiding protectionist measures and tariffs. Another reason is the structure of the Hungarian and Serbian economies. Hungary, with a GDP per capita of more than 22,000 USD, has a more advanced economy and public infrastructure than Serbia, a country with a GDP per capita of less than 10,000 USD. Furthermore, after a decade of destructive wars in the 1990s and a slow recovery period, Serbia needed investments in public infrastructure and existing industries such as automotive, tire, textiles, etc.

The above-mentioned investments are characterized as greenfield investments, acquisitions, or joint ventures, and they are financed by investor’s funds, signifying that there is no threat of increased indebtedness or a debt trap. From Brussels’ side, the risks are primarily related to the Chinese rising involvement in critical technologies on European soil. In this respect, the EU has been particularly sensitive to China’s intentions to participate in the construction of 5G network. Hungary remained determined to dismiss the pressure from Brussels and it announced a 5G network implementation with Huawei. Contrary to this, Serbia was not able to dismiss pressure from the West completely. President Vucic signed the agreement with Washington on September 2020 not to purchase 5G equipment from untrusty vendors (Bojić et al 2021). Although the agreement did not indicate Huawei directly, untrusty vendors assume all Chinese companies collaborate and exchange information with the Chinese government. This Serbian action can be seen as a traditional Belgrade strategy of balancing between the West/East, the EU-accession process, and allegiance towards Russia/China. Belgrade has been keen on maintaining an option to become an EU member and collaborate with Beijing, maximizing benefits from this strategic position.

Some Chinese acquisitions and joint ventures proved to possess great socio-economic significance. This primarily includes large corporations such as Wanhua in Hungary, or RTB Bor and Steel Mill Smederevo in Serbia, where jobs of 3000 people (Hungary) and 10.000 people (Serbia) were saved and business started to prosper. Furthermore, some of these factories are located in rural areas with few job opportunities.⁷⁰ Securing Chinese investments signifies decreasing unemployment, reviving the local economy, and consequently, securing political support for incumbent governments in Belgrade and Budapest.

Contrary to the above-mentioned acquisitions, joint ventures and greenfield investments, infrastructure projects are controversial because of debt exposure. Common financing scheme includes 85% of loans from China and 15% of funds provided by the Hungarian/Serbian governments. Since the amount of the loan is significant, there are concerns whether the projects are financially sustainable and whether Hungary/Serbia can repay the debt. The BBRU project connecting Belgrade and Budapest has already been deemed financially unsustainable by the EU owing to the small number of passengers on this route. This project, although it upgraded the outdated railway connection between the two capitals, would be used primarily for cargo. For this reason, the project will be useful for Chinese economic interests as it is a crucial and final component of the Pireus port-Budapest connection. However, the project will increase Hungarian foreign debt exposure by approximately 11%. Furthermore, as the government agreed to conceal the details of the contract for 10 years, Hungarian taxpayers cannot know important provisions, such as the beginning of the repayment period and conditions applicable if Hungary cannot service the debt (Posaner and Lili Bayer 2023). Similarly, contract details with Serbia are publicly unknown, other than general information, such as a repayment period of 20 years and a grace period of five years.

Other large infrastructure projects in Hungary have failed for reasons such as financial unsustainability or violation of EU procurement laws. However, the situation differs in Serbia. As a non-EU member state, Serbia is not obliged to follow the strict laws and regulations of its member states. Therefore, Serbia is more receptive to Chinese infrastructure development projects. The most significant projects include the Pupin Bridge, the Belgrade bypass (Road B), and parts of Corridor XI. These projects are not crucial for the transportation of Chinese cargo; however, China benefits from them in a business sense. They are largely financed by China’s Exim Bank, and the majority of the developers are Chinese companies. However, since China has proved willing to finance projects deemed financially unfeasible by the EU, there is a concern that Serbia would not be able to service its debts. At that point, China might overtake control of its critical infrastructure, such as in the case of the Piraeus port.⁷¹ Similarly, the construction of a thermal power Kostolac is not crucial for the BRI. This is crucial for Serbian energy needs; however, it is considered financially unsustainable. To obtain Chinese loans, the Serbian government agreed to difficult conditions such as compliance with Chinese law. This signifies that in the case of arbitration, the trial would be held in Beijing, and Serbia would have to accept the verdict.⁷²

The environmental dimension of structural power deals with environmental impact. As EU members and aspiring candidates, Hungary and Serbia agreed to follow EU-dictated environmental policies. However, EU regulations are often overlooked to complete a project. The most infamous examples are the Steel mill in Smederevo, RTB Bor, and Kostolac thermal plants. Kostolac has been criticized for using coal, the most “dirty” source of energy, resulting in increased air pollution and increased health risks not only for Serbia but nearby counties as well (Matkovic and Kukolj 2020). The EU, in its push for green energy sources, has recommended abandonment of this energy source; however, the Serbian government has continued with the project.

In the cases of the Steel mill in Smederevo and RTB Bor, there have been numerous protests by locals because of air and water pollution.⁷³ In Smederevo, the plant has been emitting toxic dust, remains of siderite, from which iron is produced. The European Division of the United Nations Educational, Scientific and Cultural Organization (UNESCO), after inspecting the site, declared that the plant has been violating the UNESCO Universal Declaration on Bioethics and Human Rights, to which Serbia is a signatory (Todorovic 2024). The situation in Bor is similar. As a side effect of copper mining, there has been an increased environmental degradation, especially pollution of the nearby river with heavy metals (Filimon et al. 2016).

In Hungary, the most environmentally concerning projects include the construction of a battery factory in Debrecen by CATL. The project has been accompanied by intense protests from activists and the local community who criticize the government’s approach of sacrificing the environment for battery production. The concerns include the pollution of air, accompanied by fears of increased health risks, and pollution of underground waters, on which the city relies for drinking (Thorpe 2024). Other environmental concerns are related to the infrastructure projects, and they include general fears such as deforestation, habitat destruction, and increased level of carbon emissions.

Despite the fact that both countries did not intend to form a new legal framework that abandons European environmental standards, they proved to dismiss environmental violations and citizens’ protests in favor of the projects. The situation proved to be more serious in Serbia as mining, coal, and steel production have been known as “dirty” industries producing many pollutants. In contrast, environmental problems in Hungary are primarily related to battery production, and demonstrations intensified as the government signed the agreement with CATL disregarding citizens’ claims.

The political dimension of structural power refers to diplomatic/political instances in which Hungary/Serbia converged with Beijing at the expense of relations with Brussels. Both countries were one of the early supporters of BRI and both refused to align with Brussels in condemning China’s actions in the South China Sea, Hong Kong, and Xinjiang. From Brussels’ point of view, Hungary’s opposition was more harmful as it prevented the EU from forming joint statements, it even sparked debates about abandoning the rule of unanimity. Both Belgrade and Budapest showed to be critical of the EU’s policy of fighting against coronavirus, they ordered significant quantities of Sinopharm vaccines before they were approved in the EU and requested assistance from Beijing in terms of medical equipment. This diplomatic action was seen as diverging from a coordinated European policy of struggle against the virus.

Belgrade/Budapest showed to have similarities in their views of Russia as well. Hungary, despite joining the EU sanctions, criticized the sanctions for not working and refused to endorse them in situations where Hungarian national interests were jeopardized. This included refusal to endorse embargo on Russian oil, and consequently, the EU had to make an exemption of allowing the import of Russian oil for Hungary to enable the sanctions and preserve the rule of unanimity (Herszenhorn et al. 2024). In contrast, Serbia as a non-EU member chose not to comply with EU demands. President Vucic declared that they would never join sanctions against Russia, which may be attributed to their long-term partnership since the ex-Yugoslav war and Putin’s support for the Serbian stance on Kosovo (Jevtic 2024).

The analysis of Chinese structural power in Hungary/Serbia through different dimensions of structural power–economic, environmental, and politico- diplomatic–proved that the Chinese power to shape rules extends beyond the economic sphere. In the economic sphere, the study differentiated infrastructure projects from acquisitions, joint ventures, and greenfield investments. Infrastructure projects (BBRU, Corridor XI) that are deemed financially unfeasible by the EU are likely to be repaid with taxpayers' money, as the increase in passengers will not be enough to finance the loan. However, it is premature to evaluate it as a “debt trap” as both Hungary and Serbia still have a manageable debt to China.

Investments in EVs, battery production, and high-end technologies such as 5G development have been placed under additional scrutiny under the European “de-risking” strategy. Consequently, most European states started to refrain from collaborating with Chinese manufacturers. In contrast, Hungary has been eager to expand its collaboration with Huawei, BYD, and CATL. Serbia also showed a willingness to collaborate with Chinese vendors in EV and battery production; however, the agreements have not been finalized yet (Spasić 2024),

Contrary to the expectations that Hungary, as an EU member, would be constrained by the European structural power and demands to comply with the “de-risking” strategy, Hungary announced the inclusion of Huawei in 5G network construction. In contrast, Serbia opted for a strategy of balancing between Western partners and China, therefore, the implementation of 5G network is temporarily halted.

The analysis of the environmental dimension demonstrated that Belgrade and Budapest are willing to dismiss environmental policies dictated by the EU to finalize the project. In Serbia, this practice has led to increased health risks and increased cases of illness because of hazardous pollutants in the air and water. In Hungary, the biggest environmental risks related to the battery production industry and the government's dedication to becoming a hub for battery manufacturing in Europe.

The politico-diplomatic sphere showed that both Belgrade and Budapest tend to appease Beijing when it comes to the “One China” principle and disregard European appeals to form strong joint statements. In the same vein, both countries have a close collaboration with Moscow and support China-proposed peace plan for Ukraine. This has emerged as a particular vulnerability to the EU since Hungary assumed the rotating presidency in July 2024 (Liboreiro 2024). EU members condemned Orban’s actions, declared them as bilateral, and consequently, boycotted the Hungarian presidency over the EU. Hungarian and Serbian close collaboration with Moscow will highly likely delay the Serbian accession process and stimulate further debates on how to penalize Budapest.

The study contributed to a more comprehensive and multifaceted understanding of Chinese influence in Serbia and Hungary; however, to delve deeper into the understanding of relationships between Serbia/China and Hungary/China, future research on the changes in public attitude towards China in both countries would be necessary. Additionally, as the details of security cooperation between Hungary and China became publically available, future research that includes security dimension may be necessary.

Despite the concerns there was no public tender or environmental impact study. See: (Rogers 2022)