Even More Chinese Companies Will Invest Billions of Forints in Hungary

  • 28 Jun 2023 10:15 AM
  • Hungary Matters
Even More Chinese Companies Will Invest Billions of Forints in Hungary
Agreements have been reached with two Chinese companies on their investments worth a combined 35 billion forints (EUR 94.7m) in Hungary, Péter Szijjártó, the foreign affairs and trade minister, said in Tianjin, in northern China.

The government aims to make Hungary the number one investment destination in the region for Chinese companies, Szijjártó said after talks with the Chinese business executives, according to a ministry statement.

The new investments will contribute significantly to maintaining Hungary’s economic growth and will create around 500 jobs, the minister said.

One investment will be a 28 billion forint packaging materials plant in eastern Hungary supplying the biggest European drinks makers, Szijjártó said, adding that the project would create around 300 jobs.

The government is also supporting the investment, he said, adding however that the size of the government’s grant would only be revealed after the project is approved by the European Commission.

The other company will invest 7 billion forints in producing interior parts for BMW’s electric vehicles produced in Debrecen, in eastern Hungary, he said, adding that the investment will create some 200 jobs.

Chinese companies continue to regard Hungary as an attractive investment destination, “and our aim is to maintain our position as the top investment destination of Chinese businesses in central Europe”, Szijjártó said.

He said Chinese investments had played a significant role in keeping the Hungarian economy on a growth path in the recent period.

After 2020, Chinese companies are once again the top investors in Hungary this year, he said, underlining their use of cutting-edge technology and contribution to protecting jobs.

“And these investments are mainly going towards the electric vehicle industry, which we know is the industry of the future,” Szijjártó said.

“The country that can attract EV industry investments will definitely be successful in the coming period.” Szijjártó said there was “no turning back” when it came to the car industry’s transition to electric vehicles, arguing that it would determine the development of the European and global economy in the coming period.

He said the reason why most Chinese auto industry investments were being made in Hungary was because of the capacities of the German carmakers present in the country.

Szijjártó: Cutting Europe-China Ties Would Be 'Brutal Economic Suicide'

Cutting Europe-China ties would equal Europe’s “brutal economic suicide”, Foreign Minister Péter Szijjártó said on Tuesday, insisting that the bloc’s competitiveness had “plummeted in recent years for numerous reasons”.

The ministry cited Szijjártó as telling a panel discussion at the World Economic Forum in Tianjin that “connectivity is good and the re-forming of blocks in the world is bad”, adding that this precept was the starting point for the government’s policy in terms of economic ties between Europe and China.

Judging from various trends, several European countries view China as a risk or a threat, he said. Contrary to this, Hungary believes that cooperation with China could bring about “tremendous results”, he added.

“It is in Europe’s interest to cooperate with China on the basis of mutual respect and interests,” he said. Hungary sees “great opportunity” in the division of labour between East and West and the only way to improve European competitiveness, he added.

For decades, the basis for predictable economic growth was the combination of developed western technologies with easily accessible and relatively cheap energy from the East, he said.

However, this is not the case anymore, noting lost European-Russian links owing to the war in Ukraine, he added.

“If we were to cut European-Chinese ties on top of that, it will be a blow to the European economy,” he said, noting that EU-China trade totalled 865 billion euros.

“Europe only stands to lose if we view China as a rival rather than as a partner for cooperation,” he said. The renewal of Europe’s crucial car making industry, he noted, required batteries, adding that “in this field they have become totally dependent on eastern, especially Chinese companies.”

Concerning the planned “Middle Corridor” linking Europe to China, Szijjártó said building new routes was a shared interest without which there could be no growth potential for Europe.

“Without physical paths everything is just perception and illusion,” he added. Szijjártó said the future of bilateral ties depended on whether “Europe is ready to return to rationality and common sense”.

“Europe has a certain tendency to lecture and judge others, to tell them how they should live, but there’s no point in this because countries have different cultures and different systems,” he said.

“Any one country should not force its political system onto others; ties can be mutually beneficial based on mutual respect; as is well demonstrated by Hungary, which has become a meeting point of Eastern and Western investments,” the minister said.

Concerning Hungary’s dependence on energy imports, Szijjártó said the government “has always considered energy as a physical issue rather than one of politics or ideology, one that requires resources and transport routes.”

The current energy infrastructure of central Europe is not up to delivering sufficient supplies to Hungary “whatever the political willingness”, he said, adding that by diversification, the government meant involving as many resources and routes as possible “rather than replacing one dependence by another”.

Central Asia is a potential energy source for Hungary, Szijjártó said, adding however that “as long as oil or gas cannot be brought back in a backpack”, pipelines must be constructed, he said.

“Europe must participate in construction because this is not a national but a European cause,” he insisted. “Purchasing gas from Russia is not a matter of political taste but one of physical reality,” Szijjártó said.

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