China Power | Diplomacy | East Asia

Move Over, Hungary: Spain Is China’s New Best Friend in the EU

With Viktor Orban’s election loss, Pedro Sanchez is now Beijing’s most useful European leader.

Spain’s Prime Minister Pedro Sanchez meets with Chinese President during a visit to Beijing, China, Apr. 11, 2025.

As Hungarian Prime Minister Viktor Orban goes into political exile and China loses this close European friend, Spanish Prime Minister Pedro Sanchez was in Beijing for the fourth time, seeking investment deals and pushing for the European Union (EU) to consider China a “strategic partner.” Forget Hungary – it is Spain that is increasingly looking like China’s best friend in the EU.

Orban’s massive electoral loss to Peter Magyar last weekend was followed by analysis suggesting that this is a blow for China, representing the loss of its “best friend in the EU.” Hungary, for a long time, has been considered a gateway for Chinese investment into the EU. Beyond that, Hungary became a disruptive voice in the European Council, preventing a unified China policy, and an eager partner in China’s Global Security Initiative, welcoming joint patrols of Chinese police and adopting Chinese surveillance technology. While this certainly has been useful for Beijing, it also has a deepening relationship with Spain – which is arguably even more valuable for China. 

Spain’s enthusiastic overtures to China are well noted. Sanchez has visited Beijing once a year since 2023, and last year the Spanish King visited China alongside a business delegation for the first time. As with Hungary, Spain has been keen to welcome Chinese green investment, which has included Chinese automaker Chery building a European Operations Center and R&D Institute in Barcelona, Chinese battery manufacturer CATL building a lithium iron phosphate (LFP) battery gigafactory in Zaragoza, and plans for Chinese battery and stationary energy storage systems company Hithium to invest in Navarre. These projects are all part of Chinese firms’ efforts to localize their production inside the EU and bypass tariffs on Chinese electric vehicles. Sanchez also used his latest trip to Beijing to court Chinese wind-turbine manufacturer Ming Yang, who had just had a planned investment blocked in the United Kingdom on national security grounds.

Similarly, Spain has diverged from Germany, France, and the U.K., which have all imposed export controls on collaboration with China in the field of emerging technology. Instead, in April 2025, Spain launched a strategic agreement with Chinese quantum company Origin Quantum to develop Europe’s largest quantum computer.  

Chinese investment in Spain has grown by 50 percent in the last two years (2024-2025) compared to the previous two years (2022-2023). China’s investment in Spain now stands at $3 billion, according to data from the American Enterprise Institute. This is a significant increase, but still smaller than the $5.2 billion of Chinese investment Hungary received over the same period.

Despite the left-wing Sanchez government’s strong commitment to labor rights, Spain has been happy to accept China’s investment model, which depends on bringing Chinese workers to European sites, violating workers’ rights with exploitative hours and conditions, in order to meet tight margins and remain competitive. These investments are also backed by Beijing, making them unfairly competitive in contrast to European........

© The Diplomat