China hopes to establish pragmatic economic and trade cooperation with Hungary

BBJ: In recent years, Hungary has pursued a foreign trade policy of “opening up to the East”, while China has its own “Belt and Road” initiative. Are these links related?

Dayu Qi: The policy of “opening up to the East” is an independent choice made independently by the Hungarian government, in the light of its own national conditions. The main feature of the Belt and Road initiative is the emphasis on openness and cooperation. Hungary is the first country in Europe to sign a cooperation agreement with China on the joint construction of the “Belt and Road”. This is a tangible manifestation of the convergence between Hungary’s “opening up to the east” and the “Belt and Road” initiative. It is in line with the orientation of China-EU cooperation, while also being beneficial in promoting the interconnectivity of the Eurasian continent.

Recently, at the China-CEEC Leaders’ Summit, China and Hungary jointly signed the “List of Priority Cooperation Projects of the China-Hungary Belt and Road Initiative”.

The two sides will focus on the economic development of the post-COVID era, consolidate the basis for cooperation and explore emerging areas to enable the connection of the Belt and Road initiative and the “Openness” policy. to the East ”to produce more results.

BBJ: The last few years have seen a rapid development of bilateral trade between China and Hungary. What is the current situation and what are the categories of goods currently imported and exported between China and Hungary?

DQ: In 2020, China became the EU’s largest trading partner, while also ranking Hungary’s third largest trading partner and second largest source of imports. According to Chinese statistics, bilateral trade volume reached USD 11.69 billion in 2020, an increase of 14.4%, despite headwinds; Hungary exported $ 4.28 billion to China, an increase of 14.3% year-on-year.

The five main categories of goods imported from Hungary to China are: electrical machinery, electrical equipment and parts; vehicles and accessories (except railway vehicles); mechanical devices; precision instruments; and pharmaceuticals.

The goods exported from China to Hungary mainly consist of: electrical machinery, electrical equipment and parts; precision instruments and equipment; mechanical devices; vehicles and accessories (except railway vehicles); and other textile products.

Hungarian agricultural products are also very popular in the Chinese market. On February 8, during the special live broadcast of the “Festival of Central and Eastern European Products”, Hungarian wine Tokaj achieved sales of nearly CNY 2 million in just a few hours.

The Chinese Embassy also actively serves as a bridge to facilitate local cooperation between China and Hungary. I believe that in the post-COVID era, China’s new business models, such as online conferencing and live commerce, will promote the steady growth of cross-border e-commerce transactions between China and Hungary.

BBJ: Do you expect more Chinese investors to enter Hungary?

DQ: Investment is an important engine of economic growth. According to Hungarian statistics for 2020, for the first time, China has become Hungary’s largest foreign investor. We are very happy to see that more Chinese companies are investing and setting up businesses in Hungary, creating more than 23,000 jobs. China’s cumulative investment in Hungary had exceeded $ 5.5 billion by the end of 2020, accounting for half of China’s investment in CEECs. Hungary has been China’s main investment destination in the region for many years. In the last year alone, at least 10 new investment projects of Chinese companies were launched.

There are many favorable factors that attract Chinese investors to Hungary, including excellent bilateral friendship, good Hungary investment environment, high quality workforce, excellent geographic location, logistics and infrastructure. China and Hungary will make joint efforts to promote pragmatic economic and trade cooperation, as well as actively develop the digital economy and green cooperation.

BBJ: Compared to the US and the EU, Hungary is more favorable to Huawei’s investment and technology. Has Hungary received special treatment from China as a result?

DQ: Huawei is the world’s largest supplier of telecommunications equipment and a leading company in 5G technology. Some countries are trying to discredit Huawei in a completely unfounded way, which is a blatant act of discrimination. The Hungarian government attaches great importance to providing a fair, open and transparent business environment for foreign companies. Therefore, it is natural that Huawei is willing to come to Hungary for investment and technical cooperation.

Since 2005, Huawei has been operating here on the “in Hungary, for Hungary” principle, investing a total of $ 1.5 billion and creating more than 2,400 jobs. It has also established a European supply center and its research and development center in Budapest. From 2015 to 2019, Huawei’s local tax payments reached $ 277 million, promoting local economic growth through its own development and actively fulfilling its social responsibilities. We believe that under the protection of Hungarian market rules and business environment, Chinese companies such as Huawei will further contribute to Hungary’s economic and social development, as well as its digital transformation.

BBJ: China has invested heavily in the region’s rail infrastructure, especially the high-speed rail link between Budapest and Belgrade. Why?

DQ: Due to the obsolescence of equipment and aging, the operating speed of the Budapest-Belgrade railway is not compatible with the growing needs for economic development in this region. As a Chinese saying goes, “If you want to get rich, you must first build a road. To achieve economic development, we must first develop transport infrastructure. Hungary is committed to becoming a logistics center in the region. The Budapest-Belgrade railway will play an important role in enhancing Hungary’s geographical advantage. In this context, Hungary and Serbia are ready to expand and rebuild the railway connecting the two countries, but this requires long-term, large-scale investment and the involvement of a third party. In recent years, the Chinese railway has developed rapidly, so its advantages in technology, equipment, construction experience, etc. are obvious. It is believed that this project will play a positive role in promoting the interconnection and development of the region.

BBJ: In 2019, Hungary and China entered into a memorandum of understanding for the establishment of a Fudan University campus in Budapest, but recently this has sparked controversy in some areas. How would you comment on that?

DQ: Diversity stimulates the interaction between cultures, which in turn promotes mutual learning and their further development. As early as 2004, the Hungarian government set up a bilingual Hungarian-Chinese school in Hungary. It is the only public school in ECO that uses Chinese in addition to local languages ​​in education and is popular among many primary and secondary students.

Over the years, there have been many international cooperative education projects in China, such as New York University in Shanghai, Duke Kunshan University, Xi’an Jiaotong-Liverpool University, University from Nottingham Ningbo China, Shenzhen University MSU-BIT. On February 9, President Xi Jinping delivered his speech at the China-CEEC Leaders Summit, where he expressed China’s support for the opening of a campus by Fudan University in Hungary. Education is a common way for countries to develop international cooperation. Therefore, it should not be controversial. I believe that the creation of this campus will build a new platform for friendly exchanges between young people from China and Hungary.

BBJ: Finally, what do you think of the vaccinations using Sinopharm’s coronavirus vaccine that started in Hungary?

DQ: The first batch of Chinese COVID-19 vaccine successfully arrived in Budapest on February 16. Vaccination of registered people began on February 24. At present, the vaccination work is carried out in an orderly fashion, with no reported side effects.

China implemented President Xi Jinping’s statement on Chinese vaccine as a global public product with practical actions and took the initiative to join WHO’s COVAX global initiative to promote equitable distribution of vaccines . As of March 7, China had provided vaccine assistance to 69 countries and two international organizations and exported vaccines to 43 countries, with the numbers still growing. Tackling the pandemic is a race against the virus and against time. Speeding up the vaccination process means protecting more lives from the virus. We hope that these vaccines will play an important role in fighting the epidemic, restoring the economy and protecting life and health.

This article first appeared in the print issue of the Budapest Business Journal on March 12, 2021.