Warm Ties, Low Taxes Make Hungary Attractive to Chinese Firms, Experts Say

By Zhao Xuan, Liu Peilin and Wang Xintong

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A BYD car showroom in Budapest on May 27, 2019. Photo: VCG

Hungary is increasingly attractive to Chinese companies’ as a gateway to Europe due to its warm relationship with Beijing and business-friendly policies, leaders of government-backed trade bodies said.

China has become Hungary’s most important trading partner outside Europe, with bilateral trade nearly doubling since 2015, the Hungarian Export Promotion Agency’s CEO Gabor Jenei told the China International Supply Chain Expo on Tuesday.

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Hungary serves as a strategic gateway for Chinese businesses to Europe, leveraging Beijing-friendly policies and robust infrastructure.
Chinese investment in Hungary reached 7.6 billion euros in 2022, with 95% focusing on the electric vehicle sector.
Hungary offers the EU's lowest corporate tax at 9% and maintains strong connectivity with China, attracting investment amid growing Europe-China relations.

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Who’s Who

Contemporary Amperex Technology Co. Ltd. (CATL): Contemporary Amperex Technology Co. Ltd. (CATL) is a Chinese battery maker investing in Hungary since 2022, focusing on electric vehicle-related sectors like batteries and electronics. Their plant in Hungary’s second-largest city will begin production next year, with Mercedes-Benz as its first customer. CATL's investments align with market opportunities created by the EU’s 2035 fossil fuel vehicle ban, as overseas orders become increasingly crucial.

BYD Co. Ltd.: BYD Co. Ltd. is a Chinese battery-maker that has invested in manufacturing facilities in Hungary since 2022. The focus of their investment aligns with the electric vehicle-related sectors, particularly targeting opportunities created by the EU’s 2035 fossil fuel vehicle ban.

EVE Energy Co. Ltd.: EVE Energy Co. Ltd. (300014.SZ) is a Chinese company that has invested in manufacturing facilities in Hungary since 2022, focusing on the electric vehicle sector, particularly batteries. This investment aligns with the EU's 2035 fossil fuel vehicle ban, creating market opportunities.

Mercedes-Benz Group AG: Mercedes-Benz Group AG is mentioned in the article as the first customer for the production at a new plant in Hungary’s second-largest city, established by Chinese battery-maker CATL. This indicates a partnership related to electric vehicle initiatives, aligning with the EU’s 2035 fossil fuel vehicle ban and representing a strategic collaboration in the green and low-carbon development sector.

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What Happened When

2015：: Bilateral trade between China and Hungary nearly doubled

2022：: Chinese battery-makers such as CATL, BYD Co. Ltd., and EVE Energy Co. Ltd. have invested in manufacturing facilities in Hungary

2023：: Chinese direct investment in Hungary reached 7.6 billion euros, amounting to 58% of the country's total foreign direct investment

May 2024：: China and Hungary decided to elevate bilateral relations to an "all-weather comprehensive strategic partnership"

2024：: Hungary absorbed nearly half of China's investment in Europe

2024-11-26：: Multiple events occurred: Gabor Jenei spoke at China International Supply Chain Expo; Hungarian foreign minister made statement about China's investment; Hungary's Minister for National Economy met with Xin Guobin

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