Top Spot for Chinese Investors in Central Europe is Now Hungary

  • 7 Nov 2023 1:18 PM
  • Hungary Matters
Top Spot for Chinese Investors in Central Europe is Now Hungary
Addressing the sixth China International Import Expo in Shanghai, Economic Development Minister Márton Nagy underlined Hungary’s opposition to policies supporting the formation of geopolitical blocs, saying the country strived for connectivity between East and West.

“We are proud that Hungary is the number one destination for Chinese investments in central Europe,” Nagy said, according to a ministry statement.

He said the fact that 34% of FDI now came from Eastern economies compared with less than 10% in 2010 was a testament to the success of Hungary’s strategy of opening to the East.

Hungary is in the process of developing the ecosystem tied to electric vehicle manufacturing, which will involve Eastern and Western companies working together to make electric motors, batteries, solar panels, electric chargers and complete vehicles, the minister said.

Nagy said Hungary’s current FDI stock of 100 billion euros could double by 2030, pointing out the advantages of strong FDI inflows.

He said that at a macro level, foreign direct investment bolstered production and foreign trade. By 2030, Hungary’s export-to-GDP ratio could reach 100%, with export complexity remaining among the highest in the world, he said.

All this could help Hungary’s development level reach 90% of the European Union average by the end of the decade, he added. At a micro level, Nagy said, FDI inflows had a multiplier effect on the development of Hungarian businesses when it came to R+D and technological advancement.

The government’s aim is for there to be as many Tier1 Hungarian suppliers in the supply chains of the plants operating in Hungary as possible, the minister said.

Thirdly, he said, more intense trade could also boost the logistics sector. The sector currently accounts for 5% of GDP, Nagy said, noting the government’s aim of doubling that share by the end of the decade.

Meanwhile, Nagy said Hungary’s ability to continue to attract FDI at the current rate depended on infrastructure developments, cheap energy and an adequate supply of skilled labour. The minister hailed China’s Belt and Road Initiative (BRI) as the world’s most comprehensive project.

He said that though Hungary and China had their joint priority investment projects like the Budapest-Belgrade railway line, Hungary’s participation in infrastructure development projects under BRI was relatively low compared with other countries.

He said Hungary should participate in bigger projects under the initiative in the interest of maintaining its level of Chinese FDI inflows, production and trade. On the sidelines of the expo, Nagy held talks with the leaders of the Industrial and Commercial Bank of China (ICBC), the world’s largest commercial lender, emphasising Hungary’s aim of becoming a regional financial hub in addition to being the meeting point for Eastern and Western capital and cutting-edge technology.

The government is committed to having the ICBC open a branch in Hungary, he said.

Nagy highlighted the strong development of Hungarian-Chinese relations in the recent period, noting Prime Minister Viktor Orbán and his delegation’s visit to China last month.

Germany is Now Second Largest Investor in Hungary Behind China

Péter Szijjártó, the minister of foreign affairs and trade, on Monday inaugurated an investment of German-owned Körber Hungária in Pécs, in southern Hungary, and said that bilateral ties between Hungary and Germany would continue to develop “as long as they are rooted in reality”.

The 5.6 billion forint (EUR 14.7m) investment will increase the German-owned food and tobacco maker’s capacity and improve effectiveness, Peter Szijjártó said.

The investment is supported by a 850 million forint government grant, he said. The plant is the second largest of over 25 Körber centres on four continents, he said.

Bilateral trade with Germany, Hungary’s “number-one economic ally”, hit a record 67 billion euros last year, and is expected to reach 70 billion this year, Szijjártó said.

Germany has been the second largest investor in Hungary behind China in 2023, he added. That is thanks to German executives, who “make decisions based on experience rather than media coverage.

As long as Hungarian-German economic cooperation is rooted in reality, it will thrive, as we can see here in Pécs,” he said.

  • How does this content make you feel?

XpatLoop Media Partner

Hungary Matters

Launched in January 2014, this newsletter published on week days covers 'everything you need to know about what’s going on in Hungary and beyond', according to its publisher the state media agency MTI.

Explore More Reports

  • 'Big Step Taken' Towards Green Energy in Hungary

    'Big Step Taken' Towards Green Energy in Hungary

    • 22 Nov 2023 6:17 AM

    The future of the Hungarian economy and environmental protection lies in green energy, and the country has taken a major step towards meeting the goals related to it with broad international cooperation, the foreign minister said.

  • Expat Entrepreneur Giacomo Pedranzini Wins Atlas Award in Hungary

    Expat Entrepreneur Giacomo Pedranzini Wins Atlas Award in Hungary

    • 14 Nov 2023 6:48 AM

    Giacomo Pedranzini took home this year's Atlas Award, established by ITL Group with the objective of recognizing accomplished business personalities who exemplify an Ethical, Sustainable, and Creative (ESC) approach, and whose companies, operating within Hungary, demonstrate a steadfast commitment to fostering a more promising world.

  • Hungary to Continue Phasing Out Sectoral Taxes

    Hungary to Continue Phasing Out Sectoral Taxes

    • 1 Nov 2023 2:19 PM

    The government will continue to gradually phase out special taxes on some sectors of the economy, the finance ministry said prior to submitting a bill on tax changes for next year to lawmakers.

  • Hungary & Germany Are 'Most Natural Allies' in Competitiveness, Declares Orbán

    Hungary & Germany Are 'Most Natural Allies' in Competitiveness, Declares Orbán

    • 21 Aug 2023 9:13 AM

    German businesses know very well how important Hungarian factories, skilled workers and engineers are to the global success of German brands from vehicle production to the defence industry, Prime Minister Viktor Orbán said at the inauguration of Rheinmetall Hungary’s plant in Zalaegerszeg.