Viktor Orbán’s government scored a major diplomatic victory by being the first European host nation to the Chinese premier’s latest European walkabout. Besides signing a dozen agreements in various fields, Wen Jiabao expressed China’s willingness to invest in Hungarian state bonds.
Transport, logistics, business development and cultural cooperation, these were the main topics that were discussed at a top level bilateral meeting between Hungary and China. Kicking off his official European Tour, Chinese Prime Minister Wen Jiabao and his entourage of politicians and more than 300 businessmen arrived in Budapest for a formal gathering that resulted in the signing of 12 (more or less) specific agreements, which the government hopes will improve economic relations as well as the country’s general financial state.
The Chinese side and the memoranda signed during the visit underlined that China is genuinely considering Hungary as a beachhead in its EU expansion efforts, marked by the focus on logistics and transportation. The direction of the talks also supports speculation that China is interested in buying ownership in companies like troubled Hungarian national airlines Malév as well as state rail firm MÁV.
Jiabao also pointed out that his country’s government is open to buying “a certain sum” of Hungarian state bonds while the China Development Bank would make available a special €1 billion credit line meant to promote joint business investments. The move is anticipated to boost the aggregate of bilateral trade to $20 billion by 2015.
“We have received historic assistance from China,” PM Orbán said. He also highlighted that the commitment expressed by Jiabao to invest in state bonds will prove a huge milestone in achieving Hungary’s fiscal stability. “From my side, I see the mid-term uncertainties regarding the financing of the country disappearing,” he said.
The Chinese connection
Orbán’s government made no secret of how much it favors active and strong economic and political relations with the world’s most populous country. After taking office National Development Minister Tamás Fellegi’s very first official trip was to the Asian nation, something that was reportedly frowned upon by Hungary’s traditional partners in Europe.
And this forceful drive at friend-making is nothing new. Besides the extensive array of Chinese products, clothing and electronics mostly, sold at smaller retailers or marketplaces, and the eateries that seem to be found on every corner, China is now also one of the most important business investors.
With a financial presence through the Bank of China, companies like IT firm Lenovo, or telecoms suppliers Huawei and ZTE have also established a presence and represent serious job-creating potential. Even before the time of the second Orbán cabinet, Asia Center, the Asian-themed shopping complex in Budapest was tapped as the eventual headquarters of the country’s economic and business relations with the European Union.