China Hoping to Build Pragmatic Economic, Trade Cooperation With Hungary


Dayu Qi, China’s Ambassador to Hungary

Hungary was among the first countries to establish diplomatic relations with the People’s Republic of China, the two countries establishing formal ties on October 6, 1949. China’s Ambassador to Hungary Dayu Qi discusses the current state of relations with the Budapest Business Journal.

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

Dayu Qi: The “Opening to the East” policy is an independent choice made independently by the Hungarian government, in light of its own national conditions. The greatest characteristic of the “Belt and Road” initiative is its 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 to the East” and the “Belt and Road” initiative. It is in line with the direction of China-EU cooperation, while also being beneficial to promote the interconnectivity of the Eurasian continent.

Recently, during the China-CEE Countries Leaders’ Summit, China and Hungary jointly signed the “China-Hungary Belt and Road Initiative Priority Cooperation Project List.”

Both sides will focus on the economic development of the post-COVID era, consolidate the foundation of cooperation, and explore emerging areas in order to let the connection of the “Belt and Road” initiative and the “Opening to the East” policy produce more results.

BBJ: Recent 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 as Hungary’s third largest trading partner and second largest import source country. According to Chinese statistics, the bilateral trade volume reached USD 11.69 billion in 2020, an increase of 14.4%, despite headwinds; Hungary exported USD 4.28 bln to China, which is a year-on-year increase of 14.3%.

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

China’s exported goods to Hungary mainly consist of: electrical machinery, electrical equipment and parts; precision instruments and equipment; mechanical appliances; 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 “Central and Eastern European Goods Festival,” the Hungarian Tokaj wine achieved sales of nearly CNY 2 million in just a few hours.

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

BBJ: Do you foresee more investors from China entering Hungary?

DQ: Investment is an important driving force for economic growth. According to Hungarian statistics for 2020, for the first time, China became Hungary’s largest foreign investor. We are very pleased to see that more Chinese enterprises are investing in and setting up businesses in Hungary, creating more than 23,000 jobs. China’s cumulative investment in Hungary had exceeded USD 5.5 bln dollars by the end of 2020, accounting for half of China’s investment in CEE. Hungary has been China’s largest investment destination in the region for many years. Last year alone, at least 10 new Chinese corporate investment projects were launched.

There are numerous favorable factors attracting Chinese investors to Hungary, including the excellent bilateral friendship, Hungary’s good investment environment, high-quality labor force, excellent geographical location, logistics and infrastructure. Both China and Hungary will make joint efforts to promote pragmatic economic and trade cooperation, as well as to actively expand the digital economy and green cooperation.

BBJ: Compared to the United States and the EU, Hungary is more welcoming of Huawei’s investments and technology. Has Hungary receive special treatment from China as a result?

DQ: Huawei is the world’s largest telecommunications equipment supplier, and a leading enterprise in 5G technology. Some countries attempt to discredit Huawei in a completely baseless manner, which is a blatant act of discrimination. The Hungarian government attaches great importance to providing a fair, just, open, and transparent business environment for foreign companies. Therefore, it is natural for Huawei to be willing to come to Hungary to carry out investment and technical cooperation.

Since 2005, Huawei has been operating here on the principle of “in Hungary, for Hungary”, investing a total of USD 1.5 bln and creating more than 2,400 jobs. It also established a European Supply Center and its Budapest Research and Development Center. From 2015 to 2019, Huawei’s local tax payments reached USD 277 mln, promoting local economic growth through its own development and actively assuming social responsibilities. We believe that under the protection of Hungary’s market rules and business environment, Chinese enterprises such as Huawei will make further contributions to Hungary’s economic and social development, along with its digital transformation.

BBJ: China has been investing heavily into railway infrastructure in the region, particularly the high-speed rail link between Budapest and Belgrade. Why?

DQ: Due to out-of-date equipment and aging, the operating speed of the Budapest-Belgrade Railway is not compatible with the growing economic development needs of this region. As a Chinese saying goes, “If you want to get rich, first you need to build a road.” To achieve economic development, one must first develop transportation infrastructure. Hungary is committed to developing itself into a logistics center in the region. The Budapest-Belgrade railway will play an important role in enhancing Hungary’s location advantage. In this context, both Hungary and Serbia are willing to expand and reconstruct the railway connecting the two countries, but this requires a long-term, large-scale investment and the involvement of a third party. In recent years, China’s railway has developed rapidly, so its advantages in terms of 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 reached a memorandum of understanding, for the establishment of a Fudan University campus in Budapest, but recently it has caused controversy in certain areas. How would you comment on this?

DQ: Diversity spurs interaction among cultures, which in turn promotes mutual learning and their further development. As early as 2004, the Hungarian government set up a Hungarian-Chinese bilingual school in Hungary. This is the only public school in CEE that uses Chinese besides local languages in teaching and is popular among many primary and middle school students.

Over the years, there have been many international cooperative education projects in China such as New York University Shanghai, Duke Kunshan University, Xi’an Jiaotong-Liverpool University, University of Nottingham Ningbo China, Shenzhen MSU-BIT University. On February 9, President Xi Jinping gave his speech at the China-CEE Countries Leaders’ Summit, where he expressed China’s support for Fudan University opening a campus in Hungary. A common way for countries to develop international cooperation is through education, therefore it should not cause any controversy. I believe that the establishment of this campus will build a new platform for friendly exchanges between the youths of China and Hungary.

BBJ: Finally, what are your thoughts on vaccinations using Sinopharm’s coronavirus vaccine having begun in Hungary?

DQ: The first batch of Chinese COVID-19 vaccine arrived successfully in Budapest on February 16. Vaccination of registered persons began on February 24. As it stands, the vaccination work is carried out in an orderly manner, with no adverse reaction reported.

China has been implementing President Xi Jinping’s declaration on China’s vaccine as a global public product with practical actions and has taken the lead in joining the WHO’s COVAX global initiative to promote the fair 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 ever increasing numbers. Fighting the pandemic is a race against the virus and time. Accelerating 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 was first published in the Budapest Business Journal print issue of  March 12, 2021.

MNB Extends Green Capital Requirement Discount Program MNB

MNB Extends Green Capital Requirement Discount Program

EU Should Not Close Itself off From China, Says Minister EU

EU Should Not Close Itself off From China, Says Minister

Primark to Open 1st Hungarian Shop This Week Retail

Primark to Open 1st Hungarian Shop This Week

New Textile Collection Celebrates Hungary's Furmint Grape Wi... Art

New Textile Collection Celebrates Hungary's Furmint Grape Wi...


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.