Even though the EU has introduced protectionist measures against China to protect its own car industry through cheap electric car imports, the Middle Kingdom apparently finds enough loopholes to still gain a foothold in Europe. This is happening with active support from Hungary, where a manufacturer of important basic components for electric motors is now going to build a factory.
In concrete terms, this concerns the . The work will reportedly be built in the northern Hungarian city of Hatvan. It is unclear whether the 900 employees will be Hungarians or Chinese guest workers.
“Hungary is leading the transition to electric cars”
The new company in Hatvan will be able to produce one million stator and rotor parts for electric motors annually. Hungary is at the forefront of the process of switching to electric cars, as it is considered a stronghold and a pioneer in the global renewal of the automotive industry, Szijjártó cheered.
Agreement also with Volkswagen
However, Hungary’s chief diplomat stressed that the investment was not only “good news for Hungary” but would also help reverse the “EU economic decline”. In fact, the European car industry would also benefit from the Chinese branch – especially in the field of research and development. In the summer of last year, Xinzhi announced that there was already an agreement with Volkswagen for the supply of stator and rotor parts. This was the first major order from a car manufacturer outside China.
Criticism of China’s involvement in Hungary
China is very active in Hungary. The electric car manufacturer BYD is building a large factory in Szeged, southern Hungary, and the battery cell manufacturer Catl is building a mega factory in Debrecen, eastern Hungary. Chinese companies are building the new railway line from Budapest to the Serbian capital Belgrade. For the construction of the Hungarian section, Hungary has taken out a loan of almost 900 million euros from the Chinese Exim Bank.
However, there are also voices of caution in Hungary, pointing out that Chinese companies often largely protect their value chains, leaving little of the pie in host countries. The leadership in Beijing is investing mainly to avoid EU punitive tariffs, because the cars are built in the European Union and not imported, according to the media. In this context, a headline on the Hungarian business portal “G7” was also appropriate: “More and more Chinese suppliers are building in Hungary, but is that good for us?”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
