President Xi Jinping has promised more investment in Hungary’s railway and energy sectors to serve as China’s gateway to the European Union
Bloomberg writes, adding that he had the support of Prime Minister Viktor Orban for Beijing’s reaction against accusations of “excess capacity” by the West.
Xi, yesterday Thursday, April 9, visited in Budapest after stops in France and Serbia and promised to build infrastructure that will help spread products across the trading bloc from Chinese factories planned in the eastern European country. Hungary is short of money
The Chinese government has sought to secure funding and new stimulus for its economy beyond the billions of dollars from Chinese companies engaged in recent years, mainly in the electric vehicle sector.
The Chinese leader urged Europe to work with him to overcome trade tensions that threaten to derail the global economic recovery, backing Hungary as an EU member with which Beijing has managed to forge a strong relationship. “We will strengthen cooperation in our development strategies, deepening ties in trade, finance and our economies,” Xi said at a joint news conference with Orban.
“Hungary does not identify with the rhetoric of so-called overcapacity or risk reduction,” reads an official Chinese statement and quoted Orban during his talks with Xi. “Hungary’s determination to deepen cooperation with China is unshakable and will not be hindered by any force.”
The EU is getting tougher in its trade relationship with China, echoing US concerns about state-fueled overcapacity in the green sector. This rhetorical shift has already been put into practice with the launch of an investigation into Chinese electric vehicle subsidies in the fall of 2023. The blockade followed last month with a separate investigation into the procurement of medical devices.
Hungary has staked everything on economic ties with China under Orban’s leadership. BYD Co., the Chinese electric vehicle giant, has chosen Hungary as the site of its first European car factory, beating out Germany and France, which had also sought investment. Hungary is also a hub for car battery makers, with China’s Contemporary Amperex Technology Co. Ltd. currently building a 7.3 billion euro plant in the eastern city of Debrecen.
The Budapest meetings focused on expanding China’s economic footprint, just as they did in Serbia, Hungary’s southern neighbor. The deals include the costly modernization of the aging rail network and the construction of a long-delayed link between Budapest Airport and the capital’s centre, according to Foreign Minister Peter Szijjarto.
The operation is aimed at rendering “ineffective” the growing tension between Beijing and Brussels, with Western European leaders accusing Xi’s government of flooding their markets with cheap exports that threaten jobs. Xi’s support for Russia, despite the war in Ukraine, has further unbalanced the relationship.
Facts & Events editorial team
