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Hungary, China consult on Budapest ring rail line financing

Int’l Relations

Hungary has consulted with Chinese officials on how a €1 billion line of credit could be used to finance the construction of a rail line around Budapest, government commissioner for harmonizing Hungarian-Chinese bilateral ties Péter Szijjártó told MTI.

Szijjártó held talks on financing the "V0" ring rail line with vice commerce minister Jiang Yaoping and the heads of the China Development Bank and the Chinese Railway Construction Corporation in Beijing. Szijjártó told MTI that the Chinese government supports cooperation between China's and Hungary's eximbanks and between the two countries' development banks on financing the planned railway developments. Work groups will be set up at the banks in the interest of fostering cooperation, he added.

The China Development Bank agreed to open a €1 billion credit line to advance mutual investments with Hungarian partners a year ago. The 113km V0 line is slated to be completed by 2017, allowing freight trains to travel around the capital at speeds of 160km/h. In February, Szijjártó said the government was considering whether it would be more advantageous to tap development financing from the China Development Bank or use European Union funding. Last week, the heads of state-owned railway company MÁV and the Chinese Railway Construction Corporation signed a declaration of intent on the V0 line.

Szijjártó also met with the management of Chinese chemicals company Wanhua, which acquired Hungarian peer BorsodChem in 2011. Wanhua has already invested €1.5 billion in Hungary, including the cost of the acquisition, and it recently signed an agreement with the government on investing a further €1.6 billion in the country. During his visit to Beijing, Szijjártó collected the first applications for residency in Hungary by Chinese investors.

Hungary's Parliament approved legislation late last year that offers permanent residency permits to foreign citizens with at least €250,000 in Hungarian government securities. Szijjártó confirmed during his visit that Hungary will open a trade house in Beijing, in the second half of this year. A date for an official visit to China by Prime Minister Viktor Orban is being worked out, he added.

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