Hungary hugs Huawei; Finland suspends extradition to Hong Kong

Edward Lucas


Hungary’s claim to be the hotspot of Chinese influence in Europe gained a boost with news that Huawei is opening another R&D center there — its third. 

The controversial and well-connected Chinese telecoms company is in trouble elsewhere in Europe: Swedish regulators just banned its products and the Czechs are choosing the rival Ericsson for their 5G network.

But Hungary’s foreign minister, Péter Szijjártó, said that the new center, in Budapest, was a “milestone” in Hungary’s eastern strategy. It will employ 100 engineers and focus on artificial intelligence, streaming, image processing, signal transmission technologies and extremely large distribution systems. 

Why it matters: Hungary is a weak link in EU efforts to counter China. The government in Budapest refuses to recognize the problem, blusters and conceals its actions and intentions, and is digging itself deeper into a hole. 

Talking point: Hungarian officials have reacted with bewilderment to the presence of their names on a fragment of a leaked surveillance database compiled by a Chinese company. Don’t expect the government to complain though. 

All at sea

Meanwhile the Western-backed Three Seas Initiative (3SI), which aims to boost north-south connectivity in eastern Europe, held a low-key, mostly virtual, summit in Tallinn.

The US International Development Finance Corporation pledged a further $300 million towards the 3SI Investment Fund, while the Polish State Development Bank announced an additional €250 million. 

Estonia handed the stewardship of 3SI to Bulgaria after what President Kersti Kaljulaid euphemistically called “a year of consolidation” (read: battling to survive).

Why it matters: 3SI could matter, but it has lost momentum. It needs government buy-in, new members (it has just 12) and a sharper political focus if it is to compete with the rival Chinese-led 17+1 framework. 

Talking point: Estonia’s once-famed diplomacy is losing its edge. President Kaljulaid is contending for the top job at the OECD. That means making friends, not foes. 

Dreaming spires

Britain’s umbrella group for higher education has finally woken up to the dangers of entrepreneurial universities meeting authoritarian influence-peddlers. A new report (which doesn’t mention China by name) urges its member institutions to conduct an annual risk assessment. That is unlikely to cause consternation in Beijing — or to prompt a rethink at places such as Cambridge University, which is notorious for guzzling its way through Beijing’s menu. 

Hawkish politicians, who have been sounding the alarm for months about Chinese pressure, will not be impressed either. 

Why it matters: Chinese spies loot intellectual property from Western universities and also, increasingly, try to shut down critical research and student protests. Far more than the South China Sea, this is the real front line of the West’s conflict with the party-state in Beijing. 

Talking point: the foremost academic critic of Chinese influence operations is the New Zealand professor Anne-Marie Brady. She’s been silenced by her university, and may be dismissed. Some friends are trying to drum up support (and money for her legal fees). The response so far is, to put it politely, muted. 

Wolf warrior watch

China has slapped down Finland for suspending its extradition arrangements with Hong Kong. A characteristically splenetic statement from the embassy in Helsinki said that the move violated international law (it didn’t explain why) and represented interference in Hong Kong’s and China’s internal affairs. 

Talking point: Will Finland respond to Chinese pressure by kowtowing like Norway, or standing up like Sweden? 

Sports news 

Mesut Özil’s career at Arsenal is over. The Germany-born football star drew controversy last year for tweeting his support for the persecuted Uyghurs. His club, which has commercial interests in China, hastily distanced itself from his views. 

What we’re reading

Anne Applebaum has a terrific piece in the Atlantic about how China is filling the global leadership gap left by the United States. And the Warsaw Institute has a complementary report about China’s growing influence in international organizations. 

Thank you for reading. Until next week,

Edward Lucas