Hungary will not scale back its economic ties with China, Economy Minister Marton Nagy announced in Budapest this week, signaling Prime Minister Viktor Orban’s government’s resolve to prioritize economic partnerships over America's calls to pivot away from Beijing. The statement underscores Hungary’s strategic balancing act as it navigates global superpower rivalries while fostering its growing role in the electric vehicle (EV) and technology sectors.
Nagy emphasized that Hungary sees no immediate U.S. investment prospects capable of rivaling the scale of Chinese projects. “We don’t see an investment potential from the US that would be on par with China,” he told reporters, pointing to the absence of a new tax treaty with the U.S. as a key barrier. The previous Biden administration terminated the existing agreement, complicating prospects for American companies. This lack of economic incentives, Nagy suggested, leaves Hungary with little reason to shift away from its Chinese partners.
China has become an important part of Hungary’s economic ambitions, particularly in the EV industry. Major Chinese firms like Contemporary Amperex Technology Co. (CATL), a global leader in battery manufacturing, and BYD Co, a dominant EV producer, have established significant operations in Hungary. Additionally, Hungary has deepened its tech ties with Huawei Technologies Co., partnering with the telecom giant and Hungarian firm 4iG Nyrt.—a defense and telecom company backed by Orban—to develop a joint cloud services platform. These investments align with Orban’s vision of positioning Hungary as a regional hub for advanced manufacturing and technology, while also cultivating national champions like 4iG.
Hungary gets investment from companies banned in the US
Incidentally, Huawei is banned in the US. The US President banned Huawei during his first term as the US President. Earlier this year, Pentagon, a Chinese EV battery giant Contemporary Amperex Technology Co, the world’s largest producer of lithium-iron-phosphate batteries, was added to its list of 134 “Chinese military companies”. The list was created by a 2021 defense spending bill. Tesla's Chinese rival BYD is not present in the US. BYD and other Chinese EVs are almost locked out of the US market due to tariffs.
US wants Europe to pick favourites in America vs China trade war
The U.S., under President Donald Trump’s administration, has intensified pressure on Hungary to reduce its reliance on China, viewing Beijing’s growing influence in Central Europe as a strategic threat. Recently, Donald Trump Jr. publicly urged Hungary and other Eastern European nations to pivot toward the U.S. as their primary economic partner, framing the choice as a matter of geopolitical alignment. This message was echoed by Robert Palladino, the U.S. Charge d’Affaires in Budapest, who described China as a “strategic challenge” requiring “vigilance, transparency, and unity” from Western allies.
Analysts divided on Hungary's pro-China policy
For Budapest, China offers tangible economic benefits—large-scale investments, job creation, and technological advancements—that align with Orban’s domestic priorities. Critics argue this approach risks long-term dependency on Beijing and could strain Hungary’s relations with Western allies, particularly as the U.S. and EU push for stricter oversight of Chinese investments in critical industries like telecommunications and energy.
Supporters of Orban’s strategy, however, see it as a savvy maneuver to diversify Hungary’s economic partnerships while maintaining autonomy. By leveraging Chinese capital, Hungary has bolstered its industrial base and positioned itself as a key player in the global EV supply chain. At the same time, Orban’s government has maintained ties with the U.S. and NATO, suggesting a calculated effort to balance competing interests without fully aligning with either side.
Nagy emphasized that Hungary sees no immediate U.S. investment prospects capable of rivaling the scale of Chinese projects. “We don’t see an investment potential from the US that would be on par with China,” he told reporters, pointing to the absence of a new tax treaty with the U.S. as a key barrier. The previous Biden administration terminated the existing agreement, complicating prospects for American companies. This lack of economic incentives, Nagy suggested, leaves Hungary with little reason to shift away from its Chinese partners.
China has become an important part of Hungary’s economic ambitions, particularly in the EV industry. Major Chinese firms like Contemporary Amperex Technology Co. (CATL), a global leader in battery manufacturing, and BYD Co, a dominant EV producer, have established significant operations in Hungary. Additionally, Hungary has deepened its tech ties with Huawei Technologies Co., partnering with the telecom giant and Hungarian firm 4iG Nyrt.—a defense and telecom company backed by Orban—to develop a joint cloud services platform. These investments align with Orban’s vision of positioning Hungary as a regional hub for advanced manufacturing and technology, while also cultivating national champions like 4iG.
Hungary gets investment from companies banned in the US
Incidentally, Huawei is banned in the US. The US President banned Huawei during his first term as the US President. Earlier this year, Pentagon, a Chinese EV battery giant Contemporary Amperex Technology Co, the world’s largest producer of lithium-iron-phosphate batteries, was added to its list of 134 “Chinese military companies”. The list was created by a 2021 defense spending bill. Tesla's Chinese rival BYD is not present in the US. BYD and other Chinese EVs are almost locked out of the US market due to tariffs.
US wants Europe to pick favourites in America vs China trade war
The U.S., under President Donald Trump’s administration, has intensified pressure on Hungary to reduce its reliance on China, viewing Beijing’s growing influence in Central Europe as a strategic threat. Recently, Donald Trump Jr. publicly urged Hungary and other Eastern European nations to pivot toward the U.S. as their primary economic partner, framing the choice as a matter of geopolitical alignment. This message was echoed by Robert Palladino, the U.S. Charge d’Affaires in Budapest, who described China as a “strategic challenge” requiring “vigilance, transparency, and unity” from Western allies.
Analysts divided on Hungary's pro-China policy
For Budapest, China offers tangible economic benefits—large-scale investments, job creation, and technological advancements—that align with Orban’s domestic priorities. Critics argue this approach risks long-term dependency on Beijing and could strain Hungary’s relations with Western allies, particularly as the U.S. and EU push for stricter oversight of Chinese investments in critical industries like telecommunications and energy.
Supporters of Orban’s strategy, however, see it as a savvy maneuver to diversify Hungary’s economic partnerships while maintaining autonomy. By leveraging Chinese capital, Hungary has bolstered its industrial base and positioned itself as a key player in the global EV supply chain. At the same time, Orban’s government has maintained ties with the U.S. and NATO, suggesting a calculated effort to balance competing interests without fully aligning with either side.
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