Chinese President Xi Jinping is scheduled to meet with Hungarian Prime Minister Viktor Orban on Thursday, with discussions revolving around various topics including the ongoing war in Ukraine and infrastructure projects.
This meeting marks the third stop on Xi’s first European tour in five years, as Reuters reports.
Xi’s arrival in Budapest on Wednesday evening has been met with a hospitable reception, given Hungary’s significant role as a partner in trade and investment.
This stands in contrast to some other European Union (EU) member states, which are contemplating strategies to diversify away from China and reduce dependence on the world’s second-largest economy.
In an article published in the pro-government daily Magyar Nemzet, Xi highlighted the strong relationships he has fostered with Hungarian politicians, noting Hungary as a primary focus for Chinese investment in the Central Eastern European region.
Prior to his arrival in Hungary, Xi visited France and Serbia.
During his time in Paris, President Emmanuel Macron and EU Commission chief Ursula von der Leyen urged Xi to promote more balanced trade relations with Europe and leverage his influence to encourage Russia to seek an end to the conflict in Ukraine.
Foreign Minister Peter Szijjarto indicated that Ukraine would remain a prominent topic during the discussions in Budapest.
Celebrating 75 years of diplomatic ties, Hungary and China are expected to formalize 16 to 18 new cooperation agreements, potentially including a significant infrastructure project aligned with China’s expansive Belt and Road initiative.
Much like Serbia, Hungary has been supportive of China’s Belt and Road Initiative, a grand endeavor initiated by Xi a decade ago aimed at establishing extensive global infrastructure and energy networks linking Asia, Africa, and Europe.
The collaboration between Hungary and China extends beyond economic interests. In February, China extended cooperation to Hungary in the realms of public security and law enforcement.
Orban’s efforts to strengthen ties with Beijing date back to his assumption of power in 2010. What began as warm political relations has evolved into substantial investments, particularly in the field of battery and electric vehicle manufacturing.
Major Chinese companies such as CATL have committed significant investments, with plans for a multi-billion-euro battery plant in Debrecen, while Chinese electric vehicle manufacturer BYD announced intentions to establish its first European plant in Szeged.
The decision to establish battery production in Europe aligns with logistical considerations, aiming to reduce shipping costs given the weight of batteries.
Tamas Matura, an assistant professor at Corvinus University, noted that proximity to key automotive manufacturers like Daimler and BMW facilitated this move.
Looking ahead, there are indications that Chinese electric vehicle production in Hungary may increase, particularly in light of potential EU protectionist measures that could impede expansion plans.
Establishing production facilities within the EU could mitigate the impact of such measures, ensuring smoother operations and market access.
Discussions between Xi Jinping and Orban are expected to address various shared interests, including trade, investment, infrastructure development, and geopolitical considerations, against the backdrop of a dynamic global landscape.
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