BUDAPEST, Hungary (AP) — Chinese leader Xi Jinping will spend most of his fortune Europe 5 day tour Operations took place this week in two small countries in the eastern half of mainland China, areas that Beijing is using as a springboard for its expanding economic ambitions in Europe.
Continue stop in paris On Monday, President Xi will begin his first visit to Europe in five years. Hungary and Serbiatwo countries with authoritarian leaders seen as pro-China and close to the Russian president. Vladimir Putin.
Nationalist conservative leaders Viktor Orbán of Hungary and Aleksander of Serbia come as mainstream European leaders pursue more protectionist policies to limit the reach of China and Russia on the continent.・Mr. Vučić’s government is courting him. Economic relations with Chinaattracting large-scale investment in infrastructure, manufacturing, energy and technology.
As the first European Union country to join President Xi’s signature One Belt One Road InitiativeHungary is a member of the European Union and NATO, straddling a middle ground with unusually tolerant diplomatic and trade relations with eastern autocracies.
Tamás Matula, a China expert and associate professor at Budapest’s Corvinus University, said Hungary hosts a major Chinese investment and production base and is reluctant to do business with countries with uneven democracy and human rights records. He said that agnosticism opened a decisive door to China. EU.
“The Hungarian government is China’s last true friend in the entire EU,” Matura said. “It is now very important for Chinese people to settle in a country that is within the borders of the EU and friendly to China’s political system.”
One of the big advantages for China of establishing bases in the EU is that it can avoid high tariffs. The European Commission, the European Union’s executive arm, is considering increasing import duties on: chinese electric car The rate will be lowered from the current 10% to protect the European car manufacturing market, which is a mainstay for Germany, the 27-nation bloc’s largest economy.
But in December, Hungary announced that China’s BYD, one of the world’s largest EV makers, would open a factory there. Europe’s first EV production factory In the country’s south, it’s an expansion that could upend the competitiveness of the continent’s auto industry.
The change is also visible in Budapest, where one car dealer has started reducing its supply of European cars and introducing BYD models.
Mark Schiller, director of strategy and marketing at family-owned Schiller Auto Group, said he believes European automakers are “already behind China” in the transition to EV production. His company recently stopped selling cars made by German automaker Opel and switched to BYD.
“This was a big change,” Schiller said.
Hungarian state television appeared to confirm earlier reports on Monday that Mr. Xi and Mr. Orbán were scheduled to visit the southern city of Pécs to announce new EV manufacturing investments involving China’s Great Wall Motors.
At a subsequent press conference, Hungarian Foreign Minister Péter Szijjártó said reporters who mentioned specific companies before a deal had been finalized were “clearly acting against Hungary’s national interests,” raising concerns about the possibility of a deal. criticized the journalists who reported on it.
Reports about Xi’s possible visit to Pécs have since been removed from state television’s website. Mr. Orbán’s office did not respond to multiple requests for information about Mr. Xi’s schedule.
In Serbia, south of Hungary, China operates mines and factories across the Balkans, while billions of dollars in infrastructure loans are funding roads, bridges and new facilities.
Hungary and Serbia are agreement with beijing It modernizes the railway between Budapest, the capital of both countries, and Belgrade, and is part of the One Belt, One Road initiative to connect the Chinese-controlled port of Piraeus in Greece as a gateway for Chinese goods to Central and Eastern Europe.
The bulk of the project, scheduled to be completed in 2026 after repeated delays, is being financed by loans from Chinese banks, and Hungary and Serbia have been keen to tap into that capital.
Chinese lenders issued more than $22 billion worth of loans to nine countries in Central and Eastern Europe from 2000 to 2021, according to the Aid Data Institute at the University of William and Mary in Virginia.
Of this, $9.4 billion went to Hungary and $5.7 billion went to Serbia, which dwarfs the totals for other regional countries.
Mr Vučić said he was “honored” that Mr Xi, whom he often described as a “friend”, would visit on Tuesday. Before his visit, he said Serbia would seek more investment from China, especially when it comes to advanced technology.
However, economic analyst Mijat Rakičević said he did not expect another major investment deal because “everything Serbia will do with China has already been agreed”.
Hungary has also provided Chinese companies with generous tax breaks, subsidies and infrastructure support, as well as helped them navigate the Hungarian bureaucracy, creating a favorable investment environment for China.
“They roll out the red carpet and have everything tailored to the government. That’s a big advantage,” said Mathura, the China analyst.
Near Debrecen, Hungary’s second largest city. construction is underway The approximately 550-acre (222-hectare) 7.3 billion euro ($7.9 billion) EV battery factory will be the largest foreign direct investment in Hungary’s history.
Orbán’s government says the factory, run by Chinese battery giant CATL, will help the country become a global hub for lithium-ion battery manufacturing as the government moves to curb greenhouse gas emissions by switching to electric vehicles. I hope that will happen.
Such investments come as Hungary’s struggling economy is further hampered by record inflation and the freeze on billions of dollars in EU funds that have been withheld because of Mr. Orbán’s record on democratic standards and the rule of law. It is being carried out in the midst of
Matura said China is active in filling holes in Hungary’s budget as EU funds are held up.
“The inflow of EU funds into the Hungarian economy has almost completely stopped and there is now a dire need for Hungary to look at other options, other sources of financial capital,” he said.
Prime Minister Orbán spoke frankly about the reasons for prioritizing Chinese investment. The belief is that Western economies are in decline and China is on the rise.
In a recent speech at the CPAC Hungarian Conservative Conference, Prime Minister Orbán outlined a vision of a “world economy that is ideologically agnostic and organized according to principles of mutual benefit.”
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Gec reported from Belgrade, Serbia.
