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Hungary hungry for bigger slice of Chinese business

Updated: 2014-11-02 13:47
By Chen Yingqun (China Daily Europe)

 Hungary hungry for bigger slice of Chinese business

Hungary is putting in a huge effort to attract Chinese capital to Central and Eastern Europe. Zou Hong / China Daily

China's trade with cee nations is a tenth of its total eu commerce

Peter Szijjarto has an unusual yardstick in measuring the trade relationship between China and Central and Eastern European countries: Italy.

Bilateral trade between China and 16 of those countries "is less than the bilateral trade between China and Italy, so we have to show some improvement in the future", says Szijjarto, who was recently appointed Hungary's minister of foreign affairs and trade.

"We are not satisfied with the situation," he told officials and scholars in a speech at the Chinese Academy of Social Sciences in Beijing on Oct 27.

Trade between China and CEE countries was worth $55 billion (43 billion euros) last year; in the same period, China's trade with the European Union was worth $559 billion. China-CEE trade is expected to be worth more than $60 billion this year.

Szijjarto was on his fifth visit to China and his first to Beijing since his latest appointment in September.

Amid international political and economic upheavals in the past few years, Europe has lost much of its competitiveness, and one of the biggest challenges it faces is how to regain that, even if only in part, he says.

The EU needs to be open in its dealings with the rest of the world, and the 16 Central and Eastern countries are trying to take a lead in doing that, he says.

"The success of collaboration between Central and Eastern Europe and China is of true European interest," he says.

The CEE countries and China need to adhere to the Bucharest Guidelines for Cooperation between China and Central and Eastern European Countries signed in the Romanian capital, Bucharest, a year ago by CEE leaders and China's Premier Li Keqiang, he says.

Under the guidelines, both sides agreed to establish six regional centers in Central and Eastern Europe in fields including cultural exchanges, economics, finance, nuclear energy, tourism and trade. Signatories said they would double their trade over the next five years and discuss plans to build a new railway connecting the countries.

The first of the centers, covering regional tourism, has been set up in Hungary, and a center covering regional cooperation, will be set up in the Czech Republic soon, Szijjarto says.

"Once all the six centers have been established, our cooperation will be much more effective," he says.

Of the CEE countries, Hungary is China's third-largest trading partner. Hungary has adopted a foreign strategy concentrating on building partnerships with countries to its east, Szijjarto says.

Over the past 10 years bilateral trade between Hungary and China has increased six fold. Last year it was worth $7.2 billion, 10 percent higher than in 2012, Szijjarto says, and Hungary's exports to China were worth a record $2 billion.

Szijjarto says he expects records to be broken again this year.

Hungary is putting in a huge effort to attract Chinese capital into the CEE region, negotiations on which are now taking place between the Hungarian government and Chinese investors, he says.

The chemicals manufacturer Wanhua of Yantai, Shandong province, has been one of the largest foreign investors in Hungary, buying another chemicals manufacturer, BorsodChem in 2011. The Chinese company now accounts for half of the 5,000 jobs Chinese companies have created in the country.

Chinese telecom equipment maker ZTE Corp, which has a service center in Hungary, has helped the Hungarian telecoms operator Telenor to upgrade a national network with a view to becoming the sole equipment maker of Telenor Hungary within five years. ZTE says it plans to provide equipment to build 6,000 base stations in the country, including 4G stations using long-term evolution technology.

The Bank of China has decided to establish a center in Hungary that will serve as a staging post for expanding into surrounding areas.

Szijjarto says infrastructure development will be a key area of collaboration between China and Europe, and the automotive and electronics industries will be among the other areas that will present possibilities to Chinese investors.

Energy dependency is one of the top challenges the EU faces, he says. Central and Eastern Europe's countries are especially affected, he says, given that they rely heavily on gas and energy that Russia supplies.

"It is high time Europe considered some investment energy projects of strategic importance. We have to create a North-South energy and infrastructure corridor in Eastern Europe to increase our energy."

Hungary has been highly dependent on exports to the rest of the EU. Now it wants to export more, such as foodstuffs, to China, he says.

He hopes import licenses that China has granted to six Hungarian companies that produce beef, pork, goose and duck meat can be granted to more Hungarian companies.

"These products are strong points for our country, but have been the weakest parts of our exports to China. With licenses in the pipeline we believe the exports can reach a record high this year.

Hungary's exports to China were worth more than $2 billion last year, but food accounted for just $2 million of that, Szijjarto says.

"Hungary's economy is very open, and exports account for more than 9.6 percent of GDP. That means our success with general exports determines the country's success generally. At the same time, we need investment, that's why we need a balanced strategy of international economic collaboration."

Apart from business partnerships, Hungary is also keen on cultural collaboration, because it believes long-term economic collaboration that benefits both sides can work only if person-to-person contact has been established.

"That is why we were proud to be the third European Union member state to establish a cultural institution in Beijing last year. We are also delighted that we have three Confucius Institutes in Hungary."

A Confucius Institute regional center where Chinese language teachers can be trained is due to open in November, and a Hungarian-Chinese dictionary is now being compiled.



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