It was billed as a glitzy investment that would bring Chinese investment and research to Hungary, and provide courses for thousands of students. 

But instead the proposed Budapest campus of Shanghai’s Fudan University has become the latest battle over the apparent malign effects of Chinese investment in Central Europe.  

Protests in the Hungarian capital earlier this week against the £1.2-billion campus, forced the Right-wing government of Viktor Orban into a rare retreat on Thursday by promising to put the proposal to a referendum in 2023.

This, however, has failed to appease Gergely Karacsony, the 41-year-old mayor of Budapest who is at the forefront in the fight against the campus.

“The government proposes a referendum in 2023 but we want one now,” Mr Karacsony demanded in an interview with The Telegraph. “It is irrelevant whether the government supports a Fudan-referendum or not, because there will be one. And not at a time when the government graciously allows it, but when we want to do it.”

Demonstrators gather in front of the parliament in Budapest to oppose the campus

Mr Karacsony has joined the growing ranks in Central Europe uneasy about Chinese investment in the region.

While Chinese money offers the tantalising prospect of a quick way to reinvigorate regional infrastructure still recovering from decades of neglect, it can also bring unwanted catches such as high interest rates and the unedifying sight of governments cosying up to an authoritarian regime.

The university project could cost more than Hungary’s entire education budget for 2019.

Mr Orban has already come under fire for a deal he struck with China over the construction of a new Budapest-Belgrade railway line.

While the new line could slash journey times by hours it also comes with a hefty £148 million loan.

“The Hungarian government wants to take a loan of 500 billion forints [£1.2 billion], which will leave even our grandchildren in debt,” Mr Karacsony said.

“It is completely understandable that China strives to increase its political and economic influence; however, the Hungarian government preferring Chinese interests over Hungarian interests is absolutely unacceptable. As I said earlier, our demonstration last weekend was not against China, but against the selling of Hungarian sovereignty.”

He added that the huge sum of money that would be involved in getting the campus up and running would be better spent on a “student city” that would provide housing for Budapest’s student population.

“We are for student housing and against Chinese loans,” said the mayor.

Last year Zdenek Hrib, the mayor of Prague, willingly courted Chinese fury after he labelled China a “bully” and an “unreliable business partner”, while adding that many of the promises about the benefits Chinese investment would bring “had not been fulfilled”.

In May, Lithuania pulled out of China’s “17+1” initiative aimed at fostering ties between Beijing and 17 Central and Eastern European states, and urged other countries to follow suit.

Meanwhile Montenegro is facing the prospect of bankruptcy as it struggles to service the debt of a massive Chinese loan to build a motorway that forms part of Beijing’s Belt and Road Initiative.

Its economic problems are now so severe that it even asked the EU for help.

“These are not investments, they are loans that the local taxpayer has to pay at much higher interest rates than other options that we have such as from the market or the EU,” said Wojciech Przybylski, from the Visegrad Insight, Res Publica Foundation, which provides in-depth coverage of political affairs in Central Europe.

“These should not even be considered an investment; it’s a scheme and this scheme for any sound and democratic government is not acceptable,” he added.

“This is the main thing, the protests usually take place where the government doesn’t want to comply with their democratic mandates to serve the people but they have their own crony and transparent interests, and people don’t want this.”

There is also the fear that the loans come with political conditions written in by China that clash with democratic values.

“I think Hungarian national sovereignty is endangered by China owing to the plans to invest in the university,” Peter Sarosi, a 43-year-old Budapest resident who took part in the anti-campus protests, told The Telegraph.

“This will be a private university built with taxpayer’s money which will be controlled by the one-party state, and we know that at the university there is strict control of academic freedom and freedom of speech.”