Reference News website reported on June 11 according to a report on the Hong Kong South China Morning Post website on June 10 that in recent years, Hungary has surpassed some of Europe's largest economies and become the preferred destination for Chinese companies seeking to set up factories in Europe. The report jointly released by Mercator Institute for China Studies and Rhodium Group said that last year, more than 30% of China's foreign direct investment in Europe - 3.1 billion euros (3.5 billion US dollars) - was invested in Hungary. This exceeds the total investment received by France, Germany, and the UK combined. Most of the investments have been concentrated in the battery and electric vehicle industries. Chinese companies are eager to achieve localization production as they seek to expand into the European market and avoid high new tariffs imposed by the EU. The report said that four out of the five largest Chinese investment projects in Europe last year were battery or electric vehicle projects located in Hungary. Chinese company insiders doing business in Hungary said that Hungary successfully attracted these projects based on a series of factors. The close relationship between Budapest and Beijing was helpful, but Hungary's substantial subsidies, competitive labor costs, and good infrastructure were even more important. An insider from the Chinese business community in Europe said: "Firstly, local investment and industrial policies and other commercial factors are key; any enterprise's primary goal is profitability." "Of course, a stable political environment and friendly attitude towards China are also part of the reason. If the local government is not welcoming or interested during initial investigations, enterprises will naturally be less willing to invest." Hungary's wage levels are much lower than those in Western Europe: the average labor cost locally is only one-third of that in Germany. However, unlike most neighboring countries in Eastern Europe, Hungary has fairly decent infrastructure and a government friendly to China. Due to decades of cooperation with the German automotive industry, Hungary has a strong automotive manufacturing foundation, making it an ideal destination for Chinese electric vehicle companies seeking to enter the European market. Budapest is also generous when providing investment incentives. This insider said: "Hungary has significant advantages in terms of subsidies." Analysts say that in recent years, Hungary has become more friendly towards China and Chinese investors. The simultaneous deterioration of relations between Brussels, Budapest, and Beijing has actually brought the latter two closer together. Since Hungary joined the Belt and Road Initiative in 2015, iron-fisted Prime Minister Viktor Orban has been rolling out the red carpet for Beijing. Analysts say that initially, Hungary was merely trying to maintain its solid relationship with China. However, in recent years, it has increasingly defended Beijing's interests within Europe in ways that exceed expectations. Hungarian Central European University Asia Research Institute researcher Szép Tímea said: "The Hungarian government clearly indicates its desire to maintain relations with China. Hungary consistently opposes tariffs or any form of sanctions targeting China." By 2024, McKinsey & Company described China's overseas investment as an "irreversible trend." In the coming years, it is expected that Hungary's investor base will continue to expand, moving from a few flagship projects to a broader range of businesses. The owner of a southern Chinese company specializing in the production of electric vehicle parts said that due to the high concentration of potential customers, he is considering building a factory in Hungary. He said: "Before making a final decision, we will examine the customer base of Hungary's automotive parts industry in the future." (Translated by Yang Xinpeng) Original source: https://www.toutiao.com/article/7514518770795168271/ Disclaimer: The article only represents the views of the author. Please express your opinions in the buttons below by voting up or down.