Embassy of Hungary Beijing

1. General Information

· Capital: Beijing

· Territory: 9.596.961 km2

· Population: 1.374,6 million people

· Currency: Renminbi (CNY)

· Language: Mandarin Chinese

2. Economic Indicators (2015)

· GDP (billion USD): 10,410.9

· GDP (USD/capita): 8,141

· GDP growth (%): 6.9

· Inflation rate (%): 1.4

· Unemployment rate (%): 4.05

· International credit rating: AA- (stable, S&P)

Sources: IMF, National Bureau of Statistics of China, Standard & Poor’s, Dagong

General economic situation

Since the Reform and opening up policy, which was introduced in 1978, within the last three decades the economy of the People's Republic of China became the world's second greatest economic power after the United States. By 2011 the annual GDP growth was more than 9%.

The current leadership, which has been governing the country since 2013, declared its intention to continue the reforms necessary to maintain a sustainable and balanced economic growth. The 13th five-year-plan, announced in October 2015, sets a less ambitious growth target and focuses on the modification of the previous export-oriented economic system and the stimulation of domestic demand. After the 7.4% GDP growth in 2014 and the 6.9% growth in 2015, the Chinese leadership presumes an annual 6-7% GDP growth in the next few years. This projected economic development is also referred as the ‘New Normal’ by the leadership, which emphasizes the better quality of the economic indicators. It includes the following factors: declining inflation, more rigorous environmental standards, slowing increase of raw material and energy demand, etc.

The goal of the recently announced "Made in China 2025" program, based on the German „Industry 4.0” program is to increase the global competitiveness of Chinese enterprises, to decrease the governmental role within the economy, to enhance the role of innovative technologies and creative workforce by developing a knowledge-based society. FDI outflows from China is expected to exceed 1250 billion USD over the next decade.

The economic development of the country shows regional differences. The coastal area of the country is more developed, industrialized and its GDP/capita is higher than the inland areas. The Chinese government supports the development of these inland areas by creating special economic zones and encouraging large-scale infrastructure investments. The ‘New Silk Road’ initiative, announced in 2013, also aims to further increase the pace of modernization.

3. Priority Sectors of Bilateral Cooperation

· Knowledge and technology intensive sectors

· Research & Development

· Tourism

· Agriculture

· Food Industry

· Water Management

· Environment Protection

· Energy

· Infrastructure

· Health Industry

· Education

4. Main Bilateral Economic Agreements

· Investment Guarantee and Double Taxation Agreement (1991)

· Treaty on Mutual Civilian and Commercial Legal Aid (1995)

· Agreement on the Approved Destination Status of Hungary (2003)

· Economic Cooperation Agreement (2004)

· Credit Line Agreement between EXIMBANK and China EXIM (2013)

· Bilateral Swapline Agreement between Central Bank of Hungary and People’s Bank of China (2013, renewal: 2016)

· Memorandum of Understanding between the Government of Hungary and he Government of the People’s Republic of China on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road (2015)

5. China’s Main Trade Partners

Export (%, 2015 data)

· 1. USA 18.0

· 2. Hong Kong 14.7

· 3. Japan 6.0

Import (%, 2015 data)

· 1. Republic of Korea 10.4

· 2. USA 9.0

· 3. Taiwan province 8.6

Source: UNCTAD

6. Bilateral economic relations

· Export to China: 1796.8 million dollar

· Import from China: 4776.9 million dollar

· Total trade: 6573.7 million dollar

Source: KSH (2015 data)

Economic relations with China have gained new impetus with the announcement of the ‘Opening to the East’ policy of Hungary, and the past few years have been marked by countless results. Central banks of the two countries signed a currency swap agreement, while the two export-import banks also inked a credit line agreement. One of the most important infrastructure development project of our region, the modernization of the Budapest-Belgrade railway line would be realized with mainly Chinese financial assistance. Another major development was the re-opening of the Budapest-Beijing direct flight in 2015 May, which helped to achieve a nearly 40% increase in the number Chinese visitors to Hungary in 2015.

Chinese investments in our country have also shown steady growth recently. Bank of China, one of China’s biggest commercial bank, established its Central and Eastern European regional center in Budapest, which operates as Europe’s fifth Renminbi clearing center as well. Leading chemical industry player Borsodchem’s acquisition by Wanhua Industrial Group has created the third biggest isocyanate-producer of the world, and the largest TDI manufacturer of Europe. Huawei has created both its European supply center and its logistic center in Hungary, the latter responsible for the whole European and Middle Eastern region. The world’s largest manufacturer of tire mold, Himile established its European manufacturing base in our country near Székesfehérvár, and both leading telecommunication equipment producer Lenovo and automotive interior manufacturer Yanfeng expanded their production capacities. It is also important to mention the projects of China BBCA Group Corporation’s citric-acid plant in Szolnok and BYD’s first European electric bus factory in Komárom.

7. Main Economic and Trade Related Events

· The Health Industry Summit

http://www.thishealthsummit.com/en/index.jhtml

· Beijing/Shanghai International Auto Industry Expo

http://www.autochinashow.org/index/en/index.html

· Tangshan International Horticultural Expo

http://www.tangshanexpo2016.com/english/

· China Hi-Tech Fair

http://www.chtf.com/english/

· China-Eurasia Expo (CAEEXPO)

http://en.caeexpo.org/

· China Import and Export Fair (Canton Fair – tavasszal és ősszel)