Hungary, Serbia pick sides with China

Hungary’s Minister of Economic Development, Marton Nagy, has reiterated Hungary’s position as the primary destination for Chinese investments in Central Europe. This statement comes at a time when many European Union (EU) states have differing approaches to Beijing, with some, such as Germany and the Netherlands, benefiting significantly from Chinese imports.

Nagy, during a forum in Shanghai, China, expressed his pride in Hungary’s status as the leading destination for Chinese business investments in Central Europe. He highlighted the success of Hungary’s eastward economic opening, stating that in 2023, more than one-third (34%) of foreign capital investment (FDI) will come to Hungary from eastern countries, a significant increase from less than 10% in 2010. Nagy also noted that the current FDI stock, valued at €100 billion ($107 billion), is expected to double by 2030.

However, he pointed out that infrastructure projects related to China’s Belt and Road Initiative (BRI), of which Hungary is a part, remain relatively small compared to other countries. Nagy suggested that Hungary should increase the scale of such projects to manage the growing inflow of Chinese FDI.

China has been actively expanding its influence in Central and Eastern Europe, particularly in sectors like infrastructure, logistics, and manufacturing. In 2012, China launched the China-CEEC initiative to promote and increase BRI investments in the region. This initiative has raised concerns among some Western European states, who fear it may divide and weaken the EU’s unified stance on China-related policies.

Separately, Serbian Prime Minister Ana Brnabic has expressed a desire to boost Chinese FDI in Serbia. In doing so, Belgrade has increased domestic surveillance measures and put pressure on Kosovo, a neighbouring region, to attract Chinese investments.