Hungary’s Orbán Cabinet Boasts Status as Top Choice for Chinese Investments in CCE Domain
Hungary Strives for Connectivity Between East and West, Rejects Geopolitical Blocs
At the sixth China International Import Expo in Shanghai, Hungary’s Economic Development Minister Márton Nagy expressed the country’s opposition to policies supporting the formation of geopolitical blocs. Instead, Hungary aims for connectivity between the East and West, emphasizing its commitment to fostering strong relationships with both regions.
Nagy proudly stated that Hungary is the leading destination for Chinese investments in central Europe. He highlighted that 34 percent of Foreign Direct Investment (FDI) now comes from Eastern economies, compared to less than 10 percent in 2010. This growth is a testament to Hungary’s successful strategy of opening up to the East.
One of Hungary’s current focuses is the development of an ecosystem tied to electric vehicle manufacturing. The minister emphasized that this initiative involves collaboration between Eastern and Western companies to produce electric motors, batteries, solar panels, electric chargers, and complete vehicles.
Nagy further projected that Hungary’s FDI stock, currently standing at 100 billion euros, could double by 2030. He emphasized the advantages of strong FDI inflows, stating that foreign direct investment bolsters production and foreign trade. Furthermore, he anticipated that Hungary’s export-to-GDP ratio could reach 100 percent by 2030, with export complexity remaining among the highest in the world. This, in turn, could contribute to Hungary’s development level reaching 90 percent of the European Union average by the end of the decade.
The minister also highlighted the multiplier effect of FDI inflows on the development of Hungarian businesses, particularly in terms of research and development (R+D) and technological advancement. The government’s objective is to have as many Tier1 Hungarian suppliers in the supply chains of the plants operating in Hungary as possible.
Additionally, Nagy emphasized that increased trade could enhance the logistics sector’s growth. Currently accounting for 5 percent of GDP, the government aims to double that share by the end of the decade.
However, Hungary’s ability to continue attracting FDI at the current rate relies on infrastructure developments, affordable energy, and an adequate supply of skilled labor, according to Nagy.
The minister hailed China’s Belt and Road Initiative (BRI) as the world’s most comprehensive project. While Hungary has joint priority investment projects with China, such as the Budapest-Belgrade railway line, Nagy noted that Hungary’s participation in infrastructure development projects under the BRI is relatively low compared to other countries. He advocated for Hungary’s involvement in larger projects under the initiative to sustain Chinese FDI inflows, production, and trade.
During the expo, Nagy held talks with the leaders of the Industrial and Commercial Bank of China (ICBC) to discuss Hungary’s ambition of becoming a regional financial hub. In addition to acting as a meeting point for Eastern and Western capital and cutting-edge technology, the government is committed to persuading the ICBC to open a branch in Hungary.
Nagy concluded his remarks by highlighting the recent strengthening of Hungarian-Chinese relations, citing Prime Minister Viktor Orban’s visit to China last month.
In summary, Hungary’s presence at the China International Import Expo showcased its commitment to fostering connectivity between the East and West while maximizing the benefits of FDI inflows. The country’s focus on electric vehicle manufacturing, participation in the Belt and Road Initiative, and ambition to become a regional financial hub demonstrate its determination to maintain strong economic growth and development.
