Despite opposition, Hungary welcomes Chinese technology

Despite opposition, Hungary welcomes Chinese technology

Currently, Debrecen in eastern Hungary is the location of several new industries.

Regarding his nation's aspirational plans to produce batteries for electric vehicles, Hungary's foreign minister said in Beijing in October that "we do not intend to become the world leader because the world leader is China."

China leads the US with 6% of the world's lithium-ion battery production capacity, with an astounding 79% share. While in China, Peter Szijjarto gave an explanation of Hungary's current position, which is third with 4%, and its future goal of surpassing the Americans.

His statements were no mere brag, as he had 36 plants planned, under development, or already completed.

The Fidesz administration of Viktor Orban has bragged about its "opening to the East".

Budapest comes under heavy fire for continuing to have close commercial connections with Russia. The expanding connections with China and South Korea are more significant economically. The mainstay of that drive is the use of electric cars, and for once, rather than receiving approval from other EU countries, Hungary is becoming the envy of them.

There will be seventeen weekly flights between Budapest and Chinese cities by this summer. China surpassed all other investors in Hungary in 2023, contributing €10.7 billion.

Gazing southward from the Debrecen tower of the Reformed Great Church, the monolithic grey blocks that make up China's CATL plant are seen far in the distance. Eastern Hungary is a significant hub for the largest battery manufacturer in the world.

Sunflowers and oilseed rape have been painting the countryside green and golden until last year. The Chinese EcoPro cathode facility and the Chinese SemCorp separator foil factory have both recently emerged.

Beyond the building site of Debrecen's upcoming all-electric BMW facility is Eve Energy, another Chinese battery manufacturer.

On a 300 acre plot in southern Hungary, bulldozers are removing earth in order to make way for a Chinese "gigafactory" that will produce BYD electric vehicles.

Factories from South Korea and Japan have already begun producing batteries or battery parts here.

Noemi Sidlo of CATL's Hungarian branch said, "Hungary is in the center of Europe and in close proximity to the biggest industrial players in the automotive industry."

She clarified that it was an obvious destination and that both the national and local administrations were eager to assist.

In an effort to entice Chinese investment, Mr. Orban's Fidesz administration has gone above and above by offering CATL €800 million in tax breaks and infrastructure help to seal the deal—more than 10% of the €7.3 billion investment.

Budapest's eagerness for Chinese investment becomes even more evident when one considers the Chinese investment in a high-speed railway project that aims to link Central Europe to the ports of Thessaloniki and Piraeus.

That seems to be a shared sentiment. Just three nations will be on President Xi Jinping's May European tour: France, Serbia, and Hungary.

What risks remain for Viktor Orban's plans to fail?

Many, according to his detractors. Despite the near-complete lack of coverage on such issues in the Fidesz-controlled media, environmental protests against the large number of companies are developing.

Laszlo Papp, the mayor of Debrecen, has declined to speak with the BBC.

The Hungarian Investment Promotion Agency and the foreign ministry have not responded to many communications.

The projects' "enhanced national interest" designation, according to opponents, makes it unable to contest them locally.

The charming town of Mikepercs, located south of Debrecen, is becoming smaller and smaller due to the presence of building projects.

"None of us mothers are against green cars," says Eva Kozma, a local environmentalist, "but it is incredibly unfair they built such an enormous factory here, without asking the local people."

Her statement, "That's not a green future if everyone here gets cancer, just because people who are luckier than us can flit around in their nice green cars," draws attention to environmental problems brought on by battery manufacturing in other parts of Hungary.

CATL's Noemi Sidlo maintains that her concerns are unfounded.

Debrecen's water supply is another big issue.

Situated on the Great Hungarian plain, the region is seeing a decrease in rainfall, a depletion of subterranean water sources, and a lackluster government response to the retention of more water flowing via the Danube and Tisza rivers.

In an attempt to become a leader in electromobility, Hungary is willing to give up its position as a water powerhouse. Many of the country's present landmasses are shown as being submerged in water on maps from the 19th century.

Labor is another issue in a nation where the unemployment rate is less than 5%.

Even though CATL alone will need 9,000 workers, the Hungarian government has won election after election on the platform of "keeping migrants out."

The conservative Recently, Our Homeland Movement brought attention to the increasing number of Turkish laborers in Debrecen who are constructing the BMW factory.

Critics also fear that Hungary may become a "servant-state" for Chinese and South-East Asian corporations due to its inexpensive labor, cheap land, and substantial government incentives.

The administration understands that there is a chance that wages will remain low and that this will have an impact on local research and development.

"We need to persuade the investors to bring research as well as production here," the Prime Minister's Office's political director, Balazs Orban, told the BBC.

"How we combine their research with that of the Hungarian businesses." The most significant obstacle for the next ten years is this.