Viktor Orbán in the limelight: Wen Jiabao in Budapest

Politicians from the European Union might be talking among themselves about placing Viktor Orbán's Hungary under quarantine, but it is unlikely that the Hungarian prime minister lost too many sleepless night over this leaked piece of news. Even less is he worried about Adam Michnik, the famous Polish dissident, who frets about Orbán's dismantling of the democratic institutions in Hungary. Most likely he feels on the top of the world at the moment. Hungary's courtship of China that started in 2002, after Orbán's defeat at the polls, and continued all through the socialist-liberal period, at last bore fruit.

Viktor Orbán, who during 1998-2002 refused to do business with Russia or China, changed his mind by 2009-2010. One heard more and more about those "eastern winds" that will move Hungary's sail in the right direction. In fact, Orbán repeatedly asserted that the "decline of the West" is at hand and therefore he--as he made clear several times--will look around outside of Europe for economic opportunities.

The courtship of China has been intense in the last year. Tamás Fellegi, minister of economic resources, was made special commissioner in charge of the economic negotiations with China. He visited the country in December 2010 and again in March 2011, and bits and pieces of information were leaked about possible Chinese projects in Hungary. It was apparent almost from the beginning that Hungary was especially keen on China's buying Hungarian government bonds. Then there were rumors about Chinese companies being involved in a complete rebuilding of the Hungarian railway system, including a new super fast line from the Franz Liszt Airport to downtown Budapest. Perhaps, the rumors continued, China will be involved in the enlargement of the airport itself. There were also talks about a Chinese company buying the ailing Hungarian airline, Malév.

The intensive Hungarian efforts bore fruit. On June 6 it was announced that Prime Minister Wen Jiabao will include Hungary in his five-day European trip. It will be from Budapest that he will fly to London and then to Berlin. The Financial Times called the inclusion of Hungary in the itinerary "a big coup." But just as Fu Jing, deputy foreign minister of China, said in Budapest on June 17, "positive signals should be followed by a positive response." And there were many positive signals coming from Budapest. The details of these negotiations were not released, but we know that Chinese businessmen are very shrewd so the offers from the Hungarian side had to be quite attractive.

Let's see what we definitely know about Chinese investments in Hungary in the last year or so. On August 23, China's second biggest telecommunication company, ZTE Corp., signed an agreement to supply second, third, and fourth generation LTE cell phone systems to Telenor Magyarország. On September 13, a Chinese-Hungarian law office opened its doors to offer legal assistance to Chinese firms doing business in Hungary and Hungarian firms operating in China. A few days later, on September 20, Chinese investors purchased the Tisza Szálló in Szolnok. On January 31, 2011, the Chinese Wanhua Industrial Group bought BorsodChem Zrt. and now holds a 96% stake. On March 23, the Chinese invested two billion forints to build a factory (Chinese-Hungarian Orient Solar Kft.) in Berettyóújfalu that will produce solar collectors. The Chinese partners have the majority share in the business. Another Chinese company is setting up a pharmaceutical company in Gyula. The investment is worth 10 billion forints. In the same month another Chinese company signed a contract with the City of Szolnok to produce tricarballylic acid. The city is providing a 20-hectare site for the factory. In May Zsolt Páva, mayor of Pécs, visited Beijing and came home with a promise from Huawei, a leading telecom provider, that the company will establish its second largest distribution center in the southern Transdanubian city badly in need of foreign investment.

It was against this backdrop that the Chinese prime minister visited Budapest yesterday and today. The Hungarian authorities didn't leave anything to chance. A few weeks ago an e-mail was circulating on the Internet from the Department of Chinese Language and Literature at ELTE written to the students who study Chinese saying that they should all be present when Wen Jiabao meets with the students. The more the merrier, so if the students have friends who look like students, bring them along. The goal was to convince the Chinese prime minister to offer scholarships to Hungarian students, and a large group is certainly more impressive than a puny one.

Another problem was the presence of a fair number of Tibetan refugees in Hungary. They tried to demonstrate, but the police announced that they would interfere with traffic. To be on the safe side, all Tibetans were called into the Office of Immigration and Citizenship to have their IDs checked. And who can do anything about a long wait? Nobody. They couldn't leave and thus spent their time in the corridors of the office. The authorities didn't have to worry about an illegal demonstration. On the other hand, the Chinese inhabitants of the city were thrilled and greeted the prime minister with Chinese flags.

The meeting between the two prime ministers was exceedingly friendly. Both Wen and Orbán talked about the long-standing and close friendship between the two countries going back sixty years. Indeed, Mao Tse-tung's communist regime was established in 1949 and shortly afterwards there were yearly student exchanges between China and Hungary. According to Wen, ""friendship is always more important than business." The Chinese and the Hungarian prime minister walked along the bank of the Danube after a meeting lasting an hour and a half, after which Wen remarked that "the beautiful Danube River is flowing exactly the same way as it did twenty-four years ago when we first visited Hungary although great changes have taken place. But the friendship between the two countries remained the same."

If possible, Orbán was even more expansive. During the press conference Orbán was overflowing with compliments. For example: "Hungary is glad that it could welcome the prime minister of a state who not only contributed so much to the development of his own country but also splendidly benefitted the global well being of the world. We don't know of any such other instance in history when during such a short time so many people were lifted out of poverty and brought to levels worthy of human beings."

Or here is another example: "China's progress is not a short-lived phenomenon. In the future China will play an ever-growing role in the world. We want to have a long-lasting alliance [emphasis by ESB], longer than the time I will spend in politics, although that will not be short either." 

As for Wen, he was not too specific about the details of this strategic alliance. He did mention that the Chinese Development Bank will give a loan of one billion dollars for Hungarian investors in China. China also wants to double trade between the two countries that will be, according to plans, 20 billion dollars by 2015. Wen confirmed that China will purchase Hungarian government bonds but no amounts were mentioned.

It was known already yesterday that the two countries will sign twelve different bilateral agreements. Here they are: (1) an agreement on cooperation in matters of air- and water-transport between Foreign Minister Yang Jiechi and Tamás Fellegi; (2) a general agreement on cooperation between the Chinese Ministry of Commerce and the Hungarian Ministry of National Development signed by the two ministers; (3) an agreement on the development of the railway system signed by Gao Jian, the Chinese ambassador to Hungary, and Tamás Fellegi; (4) an agreement on the establishment of a Huawei European Supply Center signed by Peng Zhiping, vice president of Huawei, and Tamás Fellegi; (5) an agreement on the mutual establishment of cultural centers signed by Miklós Réthelyi, minister of national resources, and Gao Jian, Chinese ambassador in Budapest ; (6) an agreement on the establishment of a bilateral business council signed by Wan Jifei, the president of the Chinese Chamber of Commerce, and Sándor Demján, president of the National Association of Entrepreneurs and Employers; (7) an agreement on the establishment of the Chinese East-Central European logistical and commercial platform signed by government officials reponsible for Hungarian-Chinese relations; (8) an agreement between BorsodChem Zrt. and the Bank of China concerning the use of a 1.1 billion euro loan for the development of the company; (9) an agreement for strategic cooperation between the HNA Group and the Magyar Tőketársaság signed by Chen Feng, president of HNA, and Sándor Demján; (10) an agreement concerning the establishment of a Central European Hungarian-Chinese Commercial Logistic and Development Cooperation Zone signed by Li Fangrul, president of Shandong Imperial International Investment, and Ernő Takács, owner and president of Talentis Group; (11) an agreement about the establishment of the Szolnoki Citromsav Gyár to produce 60,000 tons of tricarballylic acid a year signed by Imre Andrási, the president of the Szolnok Industrial Park, and Chen Liping, financial director of BBCA, and finally (12) an agreement to establish a European base of Shenzhen Canyi Technology Co., Ltd. producing energy-saving lighting equipment signed by Du Wei, president of Wujiang CANYI New Lighting, and András Szollár, head of DML Europa Vállalat.

All this is very impressive, and I'm sure in the short run it will be useful to Hungary since the Chinese infusion of money and investment will offer great opportunities. But the devil is in the details, and I'm not sure whether such a close embrace of China may not have some unintended consequences.

Comments

[Paul]

Well, this might turn out to be a Faustian pact, but at the moment it looks like OV hasn't lost his touch. If this all works out, he could not only have saved Hungary from years of struggle, but could actually have given Hungary quite an edge over her Central European neighbours.

However, I don't know enough about any of this to assess the risk or try to work out what the Chinese are up to. I can't believe they're doing all this just because they like OV! (As so often, I wish Mark was still with us.)

The irony here is pretty ripe, though. All those years I've been hearing about outsiders buying up Hungary and how the Communists (irony upon irony!) sold Hungary to the Jews, and how Fidesz were going to put a stop to this and create a "Hungary for the Hungarians".

And now this!

[Hoping]

Any idea of the name of the Pharma company investing in Gyula? Having a certain connection to this sector I am curious and could maybe give some background.

[Ron]

I found a report analyzing the EU stance on China. It was prepared in 2007. And I believe it did not lost in value.

http://ecfr.3cdn.net/532cd91d0b5c9699ad_ozm6b9bz4.pdf

Based upon this document the EU relations with China can be divided in four groups, may be now with the new situation in Hungary in five groups. It is a 115 page document.

On page 41 an interesting line is mentioned. "Beijing is approaching the EU not as a partner to be wooed, but as an economic space to be used for its own development."

After reading this whole paper one thing is certain. China will not attack Hungary about Human Rights nor Hungary China.

[Wondercat]

When the texts of these agreements are web-posted, ma'am, please provide links. I should particularly like to learn what plans are afoot for the railways. With best thanks in advance --

[Some1]

I believe that the forced labour and the Chinese contracts are intertwined. I also find laughable how Orban is talking about the great progress in Chine (he is not only referring economical progress here). I remember when they had huge problem with previous governments dealing with communist countries or heaven forbid taking a vacation in communist countries. Then again these are the double standards that every intelligent human being would see miles away wit the exception of the loyal base of Fidesz. The story of the Emperor's new clothes will never get old.
Maybe what Orban really wants to learn from China is how to keep prices down. As we know China provides the third largest number of children who work. Even though they have laws that not allow child labour (under 16), they do not crack down on the large companies who rake in the dough and help with keeping the current government in power (sounds familiar). I think Hungary i already teaching a lesson or two for China, and that is how to install forced labour and circumvent the most basic human rights. THe two countries together will achieve a lot.

[TOVÁBB?]

horthy - hitler reich, orban - china reich, historical errors.

orban has no sympathy for the ordinary hungarians, and no interest in the average chinese citizen.

his suitcase was certainly filled up again, this time with rmb.

[GW]

Some1, you're absolutely right in making the connection between forced labor and the Chinese contracts. The forced labor plans take a page directly out of the PRC playbook, the "reform through labor" system or Laogai, which is now at least honestly labeled "prison."

[Mutt Damon]

I think the Chinese want to outsource the "Made In China" label manufacturing to Hungary. They cannot keep up with demand. Meanwhile Orban is trying to assemble the Hungarian bunk-o-matic in China.

It's hilarious reading the Fidesz mucky muck's pro-Tibet speeches in the past on the index.hu.

[Eva S. Balogh]

Mutt: "It's hilarious reading the Fidesz mucky muck's pro-Tibet speeches in the past on the index.hu."

Gábor Török also talked about that in his blog today (torokgaborelemez)and recalled Zoltán Balog waiving the Tibetan flag!

[pusztaranger]

Here he is: http://www.fidesz.hu/index.php?Cikk=113983

[GW]

The decline of Zoltán Balog, from his days as a progressive pastor to the German reformed protestant congregation in Budapest until today, is a real tragedy.

[Odin's lost eye]

Pusztaranger I would make your self a copy of that before some one deletes it!.

[Eva S. Balogh]

Because I was informed that there might be some problem with the blog because people had problems with posting, this is a test.

[Paul]

Reliable Typepad again! The blog was actually unavailable for an hour or two a couple of days ago.

[John T]

while Hungary is not alone in cozying up to Prime Minister Wen during his European trip, Orban's gushing words, bearing in mind his normal hardline anti-communist stance, do leave a somewhat nasty taste. The photo used here says a lot too, with a wall half covered with red flags.
That said, the Chinese are playing a blinder in terms of how they are using their economic strength and massive currency reserves, to exert their power. Their current moves in Europe build on their actions in Africa, where they have provided huge amounts of targeted investment to secure raw material contracts.
The deals signed in Budapest, will no doubt benefit Hungary, but make no mistake, China will gain, much, much more by turning the country into it's logistic's hub and central warehouse.
From a purely selfish point of view though, if they develop Vat airport, it may be a new destination for Ryanair (Budapest Airport for them :-) ), and give me a cheap option to travel to Szombathely / Torony from the UK!

[Johnny Boy]

I wonder when you'll give up your malicious attempts to falsely depict Hungary as a country that gets more and more isolated because of the government.

Publishing such news severely work against your "cause", but that's life.

Latest development is that Hillary Clinton will visit Hungary, despite your beloved treasonous individuals having done their best to deter her with lies.

I understand you must be very disappointed that things don't seem to unfold to fulfil your catastrophic wishes, and the day of seizing power again doesn't seem to get closer.

[Paul]

That's a thought - Debrecen could do with some development. EasyJet flights direct to Debrecen! Sod democracy, I'd vote Fidesz for that!

[GW]

Johnny Boy, stick to the article. Do you support the detention of ethnic Tibetans in the Office of Immigration during the visit of the Chinese Premier? Do you support the denial of their right to protest Chinese policy in Tibet? Do you support the plans to use police, called back from pension, to supervise unemployed people in forced labor? Do you recognize a parallel between this plan and the PRC's use of prison labor? Do you think that unemployment should be criminalized in Hungary?

[Eva S. Balogh]

JB: "Latest development is that Hillary Clinton will visit Hungary, despite your beloved treasonous individuals having done their best to deter her with lies."

If the information that reaches me from quite reliable sources is accurate, Viktor Orbán will not be very happy during his meeting with Hillary Clinton

[Ivan]

"Hungary is glad that it could welcome the prime minister of a state who not only contributed so much to the development of his own country but also splendidly benefitted the global well being of the world. We don't know of any such other instance in history when during such a short time so many people were lifted out of poverty and brought to levels worthy of human beings." - OV

This, then, I take it, is the true Fidesz view on Communism?

OV's view, not mine.

Well?

Well?

Johnny Boy?

[Paul]

I'm puzzled as to why SB never posts at weekends. Does he not have a PC at home?

Or is it that he's not allowed to post when his Fidesz controller isn't around in case he goes 'off piste'?

[Ivan]

"Latest development is that Hillary Clinton will visit Hungary, despite your beloved treasonous individuals having done their best to deter her with lies." - JB

Please substantiate.

That's quite an allegation.

So. Add some beef to the trolling, sir.

[John T]

Johnny Boy - As I said in my opening sentence, Hungary is not alone in cozying up to the Chinese. Prime Minister Wen is currently getting similar treatment in the UK. But unless something changed overnight while I was asleep, China is a one party,totalitarian regime that censors it's citizens and clamps down on dissidents. I thought that Orban hated this type of regime? Or is the Chinese model one that both he and you would now like to follow? Seems like principles about human rights go right out of the window as soon as a bit of money is involved.

Paul - the Ryanair comment was meant to be tongue in cheek :-)

[Paul]

I think it's time we tackled SB's over-use of the word 'lie' too.

The word is quite easily defined and the definition seems to be universally accepted. At least it is outside of Fidesz.

A 'lie' has three components - it must be: a) not true, b) known to be not true by the person saying it, and c) said by that person for malicious reasons.

In other words, for it to be a lie, you have to know it's not true AND you have to be saying it maliciously.

If it's just a difference of opinion it's not a lie. If it's wrong but the person saying it believes it to be right, it's not a lie.

In fact it's very rare to find any lies on HS. The only ones I can think off offhand are in SB's own posts, where he deliberately (and maliciously) sets out to paint people in a negative way, knowing that his portrayal isn't true.

[Ivan]

He doesn't answer questions. He doesn't engage in civilised debate. He doesn't substantiate any allegation. He presents no evidence. He distracts.

Most of all, he distracts:

from the concerns of those who love Hungary, from the concerns of those who suffer under the current mindset and policy, from those who actually think and care about Hungary and the wider world.

Yes, he represents (unfortunately) a huge proportion of the ignorant mindset.

But yes, also, I've changed my mind - the level of scattergun offence is such that he SHOULD be banned. Mainly because he adds nothing.

(or, y'know, he could actually change his mind and have a debate - at the moment he is not a good ambassador, either for his mindset OR this site)