Hungary woos China tech investments

Central European nation touts political stability, low tax rates, cash incentives, non-discriminatory policies

Hungary is seeking more Chinese investments in its growing technology sector, in line with the central European country's goal of becoming a research and development hub in the region.

In an interview with China Daily, Péter Szijjártó, Hungary's Minister of Foreign Affairs and Trade, said China has been investing heavily in Hungarian chemicals and automotive industries for the past few years. But Szijjártó said Hungary hopes to attract more investments from "technological, highly-developed companies".

He was in Hong Kong for the 13th Asian Financial Forum. The Hong Kong government and the Hong Kong Trade Development Council organized the two-day event.

Szijjártó is confident that Hungary will be able to attract more investments from China and other countries given that the central European nation offers political stability, low tax rates, and a wide range of cash incentives and non-discriminatory policies.

"We are happy with the (current) bilateral trade and investment cooperation. We will do more. We have been in negotiations with various Chinese companies to make further investments in the country," he said.

Szijjártó said China is one of the biggest foreign investors in Hungary and is crucial to the country's economic transformation from being a manufacturing center to an innovation and development hub.

He cited Wanhua Industrial Group, which in 2011 acquired a 96 percent stake in BorsodChem, Hungary's largest chemical material manufacturer. BorsodChem is also one of the biggest companies in Central and Eastern Europe.

Shenzhen-based car maker BYD opened its first European factory in the northern Hungarian city of Komarom in 2017. Szijjártó said BYD's electric buses are in high-demand and that Hungary "is negotiating with BYD for further cooperation".

He said that Chinese telecoms giant Huawei is also present in Hungary and is building a high-speed 5G network in partnership with the British telecommunications company Vodafone and German firm Deutsche Telekom.

Szijjártó said these Chinese investments are proof of strong economic relations between China and Hungary. He added that Hungary is not bothered by the trade imbalance with China.

"Most of the products we import from China are being processed and re-exported from Hungary to many other parts of the world. We have to be aware of the fact that China is a much bigger economy than (the) Hungarian (economy), so we are not bothered by the trade imbalance," he said.

Szijjártó said Hungary would have been more concerned if the Chinese companies were not investing in the country.

"But the fact is, Chinese companies are investing very heavily in Hungary," he said. He added that Chinese, Japanese and Korean companies together accounted for 38 percent of new jobs created in 2019.

Szijjártó said relations between China and Hungary marked its 70th anniversary in 2019, noting that the "Chinese-Hungarian relationship has never been as good as now".

Hungary is the first European country to join the Belt and Road Initiative and the country expects to benefit from one of BRI's flagship projects – the 350-kilometer high-speed railway that will connect the Hungarian capital of Budapest with the Serbian capital of Belgrade.

Szijjártó said Hungary is also keen to increase tourism's contribution to the country's GDP. The central European country is also wooing Chinese tourists, who are now one of the biggest markets for outbound tourism.

A total of 256,000 Chinese tourists visited Hungary in 2018, 11.06 percent higher than the previous year, according to Xinhua.