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        Reinvigorated friendship

        Hungary does not approach relations with China from an ideological point of view and views it as a friendly cooperative partner

        By LEVENTE HORVATH | China Daily Global | Updated: 2024-09-30 08:04
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        WANG XIAOYING/CHINA DAILY

        This year marks the 75th anniversary of the establishment of diplomatic relations between China and Hungary. Chinese President Xi Jinping visited Hungary on May 8 to 10, and agreed with Hungarian Prime Minister Viktor Orban to elevate Hungarian-Chinese cooperation to an all-weather comprehensive strategic partnership for the new era. The two countries also signed 18 economic agreements during his visit. And in July, Hungarian Prime Minister Viktor Orban visited Beijing as part of a "peace mission", where he said during the Chinese president's visit to Budapest serious agreements were made, but more importantly, the friendship between the two peoples was established for several generations, as President Xi's visit was convincing and cordial, demonstrating China's goodwill and respect toward Hungary. "Several generations will still benefit from that visit, from the memory of your visit to Budapest," he said.

        So Hungarian-Chinese relations have "embarked on a golden voyage", but in fact we can speak of a friendly relationship over the past 75 years. China has observed and studied events in Hungary on many occasions, so the country has never been unknown to the Chinese political leadership. Chinese ministerial and professional delegations have regularly visited Budapest.

        The good political relationship continued after the regime change in Hungary and was further deepened in the early 2000s, but the real boom came with the launch of the Orban administration's Eastern Opening policy in 2010. The Hungarian government and the Central Bank of Hungary have developed an increasingly close and fruitful relationship with China, based on the diversification of the Hungarian economy in a changing global economy.

        In recent decades, the largest Chinese banks have established themselves in Hungary, with the Bank of China and China Construction Bank setting up their branches here. The biggest Chinese companies have also invested in Hungary: ZTE has been present since 2004 and Huawei since 2005. In 2009, Huawei set up its European Supply and Logistics Center in Hungary, which has grown into the company's largest manufacturing and logistics base outside China, now serving more than 50 countries in Europe and near Europe. CATL, Huayou Cobalt and BYD are also building their largest European factories in Hungary. CATL's investment in Hungary is even the largest single Belt and Road project, and its 7.3 billion euros ($8.1 billion) investment is the largest project in the history of Hungary. In the past 10 years, the Chinese investment jumped from 1 percent to 58 percent of the Hungarian foreign direct investment in 2023.

        In 2015, Hungary became the first European country to join the Belt and Road Initiative, and later became a member of the Asian Infrastructure Investment Bank.

        There are also significant cultural links, with six Confucius institutes operating in Hungary and the Hungarian-Chinese Bilingual School now in its 20th year. Hungary is a regular guest of honor at major Chinese trade fairs, most recently at China International Fair for Investment and Trade in Xiamen, Fujian province.

        However, Western politicians, and with it the Western media, have a negative view of the Hungarian government's relations with China. But is Hungary really pursuing a maverick policy toward China?

        From Sept 8 to 11, the Spanish and Norwegian prime ministers almost simultaneously paid official visits to China, and in July, Italian Prime Minister Giorgia Meloni visited Beijing. In December last year, Italy announced its withdrawal from the BRI with great fanfare, but in July they signed an action plan to deepen the strategic partnership. In June, the Polish president held talks in China, and in May, President Xi visited not only Hungary but also France, where President Emmanuel Macron took him to one of the places of his childhood. In April, German Chancellor Olaf Scholz led a delegation of prominent business leaders to Beijing — and the list goes on, with the Dutch and Belgian heads of government and many others also holding talks in China.

        It is also worth looking at the economic data. In the West, there is great concern about Chinese investment in Hungary, especially as 44 percent of China's European investment in 2023 was directed to the country — thanks to greenfield investments by some large Chinese companies. But they forget that on average, 50 percent of Chinese investment has gone to Germany, France and the United Kingdom in each of the past 10 years, while Hungary has been of particular interest in 2022 and 2023. It is also worth considering that while Hungary has greenfield investments, Germany, France, the Netherlands, Belgium, Spain, Italy and Greece, among others, have all attracted Chinese investment in strategically important ports over the past decade or so. Most recently, in 2023, the German government allowed China's COSCO to acquire a 24.99 percent stake in the port of Hamburg. In addition, several Western European tech companies have been acquired by China.

        To sum up, Hungary, like other European countries, is developing ever closer ties with one of the world's fastest growing economies. Strengthening cooperation between China and Europe benefits both sides and aligns with their long-term interests.

        The author is director of Eurasia Center at John von Neumann University in Hungary and former consul general of Hungary in Shanghai. The author contributed this article to China Watch, a think tank powered by China Daily.

        Contact the editor at editor@chinawatch.cn.

         

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