Hungary's FDI (foreign direct investment) hits record high
- QT Advisory
- Mar 27, 2024
- 2 min read
Hungarian FDI reached more than EUR 13 billion in 2023, with EUR 7.6 billion coming from China.
According to data recently released by the Hungarian Investment Promotion Agency (HIPA), Hungary's foreign direct investment (FDI) in 2023 totalled more than 13 billion euros, doubling the 6.5 billion euros in 2022 to a record high. Among them, direct investment from China amounted to 7.6 billion euros, accounting for 58% of the total FDI in Hungary, creating more than 10,000 jobs, which is also after 2020 China once again became the largest source of foreign investment in Hungary.
In recent years, Hungary has revised and updated the Foreign Direct Investment Act several times, aiming to create a more favourable business environment for foreign investors. The Hungarian government has provided capital subsidies, tax breaks, rent discounts and other incentives for foreign companies to develop in Hungary, and the effect has been remarkable. 209 projects are involved in Hungarian FDI in 2023, creating more than 19,500 jobs, an increase of 20 per cent compared with 2022, which is also a new record.
In terms of the source of investment, investments from Asian countries and regions accounted for nearly 82 per cent of Hungary's total FDI, bringing in 67 per cent of new jobs. Istvan Zhu, head of the Hungarian Investment Promotion Agency (HIPA), said that countries in the Asian region have played an important role, which shows that the government's policy of "opening up to the east" has achieved initial results. Hungary put forward its "opening up to the east" policy in 2010, aiming to further promote the smooth flow of trade and economic relations between Europe and Asia.
Hungary was the first European country to sign the "Belt and Road" co-operation document with China, the first Central and Eastern European country to set up a RMB clearing bank and issue RMB bonds "Panda Bonds", as well as the first European country to open bilingual schools for teaching in local languages and Chinese. Hungary's Eurasia Magazine analyses that Hungary's mature industrial conditions, superior geographic location and longstanding cooperation with China have laid a solid foundation for attracting Chinese investment.
In recent years, China and Hungary have continued to heat up pragmatic cooperation in the fields of clean energy, infrastructure construction, and electric vehicles.2023 In December, BYD announced that it would build a new energy vehicle production base in Szeged, Hungary, which will be constructed in phases and is expected to create thousands of local jobs. According to statistics, this is the country's sixth Chinese car manufacturing plant and one of the largest investment projects in Hungary's history. Hungarian Foreign Minister Szijjardó said that automobile manufacturing is a local pillar industry, and attracting Chinese investment is crucial to the Hungarian economy, which will help strengthen Hungary's position in the global transition to new energy vehicles.
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