Hungary keen to attract more Chinese tech investments

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 exclusive interview, Peter Szijjarto, Hungary's minister of foreign affairs and trade, said Hungary hopes to attract more investments from "technological, highly-developed companies". China has been investing heavily in Hungarian chemicals and automotive industries for the past few years.

Szijjarto is confident that Hungary will be able to attract more investments from China and other countries because Hungary offers political stability, low tax rates, and a wide range of cash incentives and nondiscriminatory 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.

The minister was in Hong Kong for the 13th Asian Financial Forum, an event organized by the government of the Hong Kong Special Administrative Region and the Hong Kong Trade Development Council.

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

Hungary was the first European country to join the Belt and Road Initiative, or BRI, 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.

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 said.

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

Shenzhen-based carmaker BYD opened its first European factory in the northern Hungarian city of Komarom in 2017.

Szijjarto said BYD's electric buses are in high demand and that Hungary "is negotiating with BYD for further cooperation".

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.

Szijjarto 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 our imports 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.

Szijjarto 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 South Korean companies together accounted for 38 percent of new jobs created in 2019.

Szijjarto said Hungary is also keen to increase tourism's contribution to the country's GDP. And 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 percent higher than the previous year.

Szijjarto said Hungary has launched more direct flights from Budapest to China in order to attract Chinese tourists. And there are now direct flights from Budapest to the Chinese cities of Beijing, Xi'an, Chengdu, Chongqing and Shanghai.