Premier Li's visit to Hungary: a 'new era friendship' begins

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Europe

After attending the 6th Summit of China and Central and Eastern European Countries, Chinese Premier Li Keqiang arrived in Budapest, Hungary on Sunday local time for an official visit.

Li's visit will be the first visit by a Chinese leader to Hungary since the establishment of a comprehensive strategic partnership between the two countries.

After Hungarian Prime Minister Viktor Orban's visit to China on May 13, 2017, what achievements and challenges can be expected in this visit, and will a new era between the two countries begin with the China's New Era?

Friendship since 1949

The friendship between China and Hungary can be traced back to the year of 1949, when the People’s Republic of China was newly founded. Hungary was among the first countries that recognized China, on October 3, 1949. Two days later, on October 6 the two countries established diplomatic relations.

Hungarian Prime Minister Viktor Orban (R) and visiting Chinese Foreign Minister Wang Yi shake hands during a meeting in the Hungarian Parliament in Budapest, Hungary on June 6, 2015. /Xinhua Photo

Hungarian-Chinese friendship developed throughout the 1950’s, with frequent mutual visits and cooperation in various areas. In April 1959, the two countries signed the treaty of friendship and cooperation. During 1960's to 1970's, the relationship between the two countries was negatively influenced by the Chinese-Soviet nexus. The friendly relations were normalized in 1980s.

The friendship kept deepening during 1990's and a new stage of development came in the 20th century. On May 13, 2017, Chinese President Xi Jinping met with Hungarian Prime Minister Viktor Orba, announcing the establishment of a comprehensive strategic partnership between the two countries.

Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto(1st R), China's Ambassador to Hungary Duan Jielong (2nd L) unveil the new plate of the Hungarian-Chinese Bilingual Primary and Secondary School in Budapest, Hungary on Nov. 10, 2016. /Xinhua Photo

Hungary is committed to deepening cooperation with China in infrastructure and agriculture, and supports the development of China-CEE cooperation and China-EU relations, Orban said.

Important partner in economy

"When the Chinese think about the economy and Europe, then it is Hungary that mostly comes to their minds now," Hungarian foreign Minister Peter Szijjarto said in 2016.

He told public media in Beijing on May 12, 2017 that Hungary has grown to become China’s number one economic partner in Central Europe today.

"Hungary is the Central European country that exports most to China, including the most food based on the number of import licenses issued," Szijjarto said.

"Compared to others in Central Europe, the most investments on the part of China are made in Hungary, and the number of Chinese tourists to Hungary is also growing at the highest rate within the region”, he added.

Chinese Premier Li Keqiang (R) holds a welcome ceremony for Hungarian Prime Minister Viktor Orban before their talks at the Great Hall of the People in Beijing, capital of China, Feb. 12, 2014. /Xinhua Photo‍

According to the website of Hungarian government, the export-import banks of Hungary and China have agreed to establish a one billion dollar investment fund to which the Hungarian financial institution will be contributing 70 million dollars of investment, in return for which the fund will be realizing 140 million US dollars’ worth of investments in Hungary.

Szijjarto also pointed out that "Hungarian exports had broken all previous records in 2016". In 2016 Hungary exported 2.25 billion US dollars’ worth of goods to China, an increase of 25 percent year on year, and it was a 31 percent increase during the first two months of 2016, from the same period one year ago.

Pressure and challenge

According to Forbes, some analysts consider that China cares more about what happens in London, Paris and Berlin than Budapest. They take the fact that Hungary’s annual GDP is roughly a quarter of London’s economic output as supporting evidence.

Chinese Premier Li Keqiang (C rear), Hungarian Prime Minister Viktor Orban (L rear), and Serbian Prime Minister Aleksandar Vucic (R rear) attend a signing ceremony of high-speed rail construction deals in Suzhou, east China's Jiangsu Province, Nov. 24, 2015. ‍/Xinhua Photo

Another opinion indicates the pressure over the relationship between China and Hungary comes from the reinforcement of the EU and China relationship while Hungary is moving further away from the EU.

The construction of the Hungary-Serbia railway is another aspect that brings pressure and challenges. The railway linking the capitals of Hungary and Serbia, Budapest and Belgrade, has a total length of 350 km, with 184 km in Serbia, and is expected to open in 2018. There is no doubt that the railway will deepen China-Europe reciprocal and win-win cooperation in production capacity, investment and other areas.

But in February 2017, construction of the railway got suffocated by the European Commission investigation into whether Hungary violated the EU’s procurement rules.

Hungarian Prime Minister Viktor Orban (R) welcomes Chinese Prime Minister Li Keqiang (L) on the tarmac of Budapest Liszt Ferenc International Airport in Budapest, Hungary,November 26, 2017. /AP Photo

Some experts believed the investigation is a risk and challenge which must be considered and resolved when Chinese enterprises want to go out and get involved in central and eastern European countries

What to be expected?

During Li's visit to Hungary, he will meet with Hungarian Prime Minister Viktor Orban and discuss bilateral ties, the Belt and Road Initiative, China-CEE cooperation and other issues of common concern, Wang said, the Vice-Foreign Minister Wang Chao at a news briefing on November 21, 2017.

The two countries will sign a series of governmental and commercial cooperative agreements involving strategic integration, trade and economy, ecommerce, finance and production capacity, he said.

Flagship projects like the Hungary-Serbia railway, the China-Serbia Friendship Bridge across the Danube in Belgrade, and highway projects in Macedonia and Montenegro will also be discussed, according to Xinhua.

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