Hungary Insight

Chinese espionage in Hungary: “The price of friendship”


Budapest, Hungary – A few months before Viktor Orbán’s landslide victory in May 2010, I wrote an article about “the Hungarian right’s foreign policy offensive.” At the time, Orbán’s return to power seemed pretty well assured, and I sensed that not too many governments were looking forward to his reemergence on the international scene.

Even before he became prime minister, there were signs that Viktor Orbán would be a troublesome western ally and an uncooperative member of the European Union. In late 2009, in quick succession, he visited St. Petersburg to meet Vladimir Putin and then Beijing, where, according to the official announcement, he was to discuss economic cooperation between the two countries.

Orban’s Hungary looks east

Rereading my notes on these two meetings, it looks as if the Hungarian media didn’t take these visits seriously, although in retrospect we can see that Orbán was methodically building close relationships, both political and economic, with these two countries and thus changing Hungarian foreign policy in a spectacular fashion. Even the contours of Chinese-Hungarian cooperation were laid out: the small Hungarian delegation of politicians and businessmen visited “the ministry of economics, the foreign ministry, and the ministry in charge of energy and railways.” What was even more significant was that the Chinese state television announced that Fidesz and the Chinese Communist Party had formally recognized each other, which later Orbán described as “the most important result” of the trip.

Orbán, who by late 2008 was fairly certain of a large Fidesz victory, apparently worried about the financial future of the country under his watch. He suspected that he would not be allowed to run the 6% budget deficit he so badly wanted, and therefore he needed to ensure other sources of capital. The money from Chinese and Russian sources didn’t arrive quickly, however, and when it finally did, it didn’t come cheap. From that moment on, his administration devoted considerable effort and money to courting the Chinese, resulting in a large cultural infiltration of the country but only meager economic benefits. Moreover, with the cultural infiltration and the large number of permanent Chinese residents and university students, Chinese espionage has apparently also grown, making a great deal of work for Hungarian counter-intelligence.

Direkt36 reporter Szabolcs Panyi’s fascinating article, titled “Chinese Spy Games in Orbán’s Hungary,” begins with a humorous story from June 2011, when Viktor Orbán’s efforts bore fruit and Chinese Prime Minister We Jiabao visited Hungary. In those days, there was a classical music radio station that was financially dependent on Chinese Radio International. When the Chinese prime minister’s plane landed in Hungary, its normal programming had to be interrupted to broadcast some traditional Chinese music, introduced by Chinese people trying to speak Hungarian. This interruption was timed to coincide with We Jiabao’s drive from the airport to the center of the city.

Chinese students and scholars in spy games

The story I liked best concerns István Ujhelyi, MSZP vice-president of the Hungarian Parliament. Ujhelyi visited China many times and had extensive contacts with Chinese citizens. One day, sometime in 2013, Hungarian counter-intelligence officers arrived at his office asking for permission to place a special X-ray machine on his desk. They began scanning all the gifts Ujhelyi had received from his Chinese “friends.” Since he was not allowed to be in the room while the screening took place, he doesn’t know what they found. But a few months later, he was told that “a Chinese person visiting me in Parliament on several occasions … was problematic” and that he should be shunned in the future.

One group used for espionage purposes is the large pool of Chinese students in Hungary. In 2013, only 446 Chinese students were enrolled in Hungarian universities, while in 2019 there were almost 3,000. Most likely in China today, just as during the Kádár regime, scholars and students who are allowed to travel, study, or teach for any extended period are supposed to report on their contacts. One could say that the information offered by these students cannot be terribly valuable, but even bits and pieces of information might be useful if thousands report from the country.

Over the years, more and more Chinese businesses have set up shop in Hungary. The banking sector is especially well represented. There are two Chinese banks in Budapest already, the Bank of China and the Agricultural Bank of China. And it was just announced that a “gigantic Chinese bank is coming to Hungary,” the China Construction Bank Corporation. According to napi.hueach of these three banks is larger than any U.S., British, German, or French bank. In fact, in terms of total assets, the China Construction Bank, the Agricultural Bank of China, and the Bank of China are the second, third, and fourth largest banks in the world.

Chinese espionage in Hungary and “the price of friendship”

In addition, 16,000 Chinese citizens bought settlement bonds, which entitled them to settle in Hungary and enjoy all EU privileges. Many of them bought overpriced real estate in fashionable districts of Budapest. According to Panyi, Interior Minister Sándor Pintér, who supervises the Constitutional Protection Office, an internal security intelligence agency, was not at all happy with the introduction of the settlement bond program in 2012, specifically because of the opportunities it offered for espionage activities legally attained.

In brief, Panyi claims, Hungary is teeming with Chinese agents, and Beijing knows that conducting espionage activities on foreign visitors can go on with impunity in the Hungarian capital. Panyi recalls the case of an American who was surveilled by Chinese intelligence in the United States, but he was surprised to see that Chinese agents followed his movements in Budapest when he visited the Hungarian capital.

Apparently, the local Chinese intelligence officers in Hungary, as in Switzerland and Austria, are “mostly wrestling the United States.” But Fidesz politicians are not immune to Chinese espionage either. At the end of last year, a Chinese surveillance database became public, which contained 710 Hungarian names, “including leading and local politicians, as well as their family members, company executives, and military officers, programmers, financial professionals, and church leaders.” As one of Panyi’s subheads says, this is “the price of friendship.”

By the Hungarian Spectrum, a Kafkadesk partner.

Coordinated by Ábel Bede, Kafkadesk's Budapest office is made up of a growing team of freelance journalists, editors and fact-checkers passionate about Hungarian affairs and dedicated to bringing you all the latest news, events and insights from Hungary.

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