Hungary is helping Europe kiss decoupling goodbye

With the visit of Xi Jinping to Paris and Budapest last week, it’s clear that Europe and China are not breaking up—and that France and especially Hungary are keys to a productive relationship.

Behind the Chinese president’s visit to these two EU capitals, some analysts have suggested a sinister agenda to divide Europe within itself or separate it from the United States.

But today, the only division within Europe appears to be between those who recognize that European strength depends on connectivity and those who imagine that Europe can restrict its way to strength. In that contrast, the strategic leadership now belongs to Budapest.

In recent years, both Paris and Budapest have been advocating for a more articulate European role in the emerging multipolar world order. While France has prioritized the language of strategic autonomy, Hungary has focused on articulating a national strategy of connectivity.

On his visits to the two countries, the Chinese leader signed 18 agreements in each of the two locations. But industrial development through foreign investment—not only through China’s Belt and Road framework but from many other partners, as well—has begun to occur in Hungary on a different scale.

During the heyday of globalization in the 1990s, it was the departure of Western industry for China that became known as the “China Shock” phenomenon. But while European industry continues to lag—EU industrial production declined about 5.4% between February 2023 and 2024—Hungary has nearly doubled its FDI stock since 2010 and, according to the Hungarian Institute of International Affairs, is defying regional downtrends. Inward investment is now driving reindustrialization.

Because of Hungary’s history and geographic location, it