The Hungarian-Chinese Chamber of Economy (ChinaCham) aims to enhance Hungary’s role as a logistics and distribution center of Chinese goods for the region.
In a previous interview with Diplomacy&Trade, ChinaCham President Ernő Pető stressed that “Europe needs China very much and China also needs Europe.” When asked whether he still stands by this statement, the answer is a definite ‘yes’. “It is increasingly so in the economic policy situation that rules the world nowadays. It is especially true in the times of the American-Chinese trade war, when the American administration is in a trade war with all major trade partners (EU, Canada, Mexico, etc.). In light of all this, it is an increasingly prevalent development that China is looking for new markets and that the Chinese market has become more open to Europeans.”
A professional voice
One of the declared aims of ChinaCham Hungary is the enhancement of business relations between Hungary and the People’s Republic of China. “ChinaCham is an independent legal entity. As a bilateral chamber, it has special tools and special possibilities to take part in enhancing economic relations between the two countries. It is a politics-free professional organization whose board and members are individuals and corporate players who bring in – and are able to use – their experience of long years gained on the Chinese market and by conducting business relations with the Chinese. As a non-official governmental actor if you like, we can ‘afford’ telling more to – and talking in a different way with – the governmental bodies of both countries. We are the professional voice to tell them things that concern, in one way or another, all actors in economic relations between the two countries,” the President adds.
Establishing a foothold in the EU
There is a large number of Chinese firms in Hungary employing over 15,000 people and the number is increasing. “Looking at the number of Chinese companies and their employees, I can say is that there was a first chapter in 1991-92 when 40-50,000 Chinese people came to Hungary and since then, this country has had the largest Chinese community in East Central Europe. Interestingly enough, most of those who came then did not open a Chinese fast food kitchen but started commercial activities: retail and then wholesale businesses, thereby giving Hungary a distribution role in the trade of Chinese goods. Nowadays, there is another wave when we begin to reap the benefits of the encounter between the Eastern Opening policy of the Hungarian government and those of the ‘Belt and Road Initiative' – that I would call ‘Western Opening’ – of the Chinese government,” Ernő Pető says. He emphasizes that Hungary provides a great opportunity for Chinese ventures to set up businesses inside the European Union. “What politicians always emphasize is that political relations have never been so good between the two countries as today and that naturally has an impact on economic relations as well. One particular field is that of electric vehicles (cars, trucks, motorbikes, bicycles). The Chinese are looking for Hungarian companies who have a routine and experience, skilled workforce in the manufacturing of vehicles – not necessarily electronic ones because they can add their own technology.” He predicts that the number of Chinese companies in Hungary will grow in the near future and he is hopeful that they will find the proper workforce so that the number of Hungarians employed by Chinese companies will also increase.
ChinaCham Hungary also undertakes the task of helping Hungarian enterprises appear on the Chinese market, although, Ernő Pető admits that “this is the harder part of the work we do at the chamber.” They try to make Hungarian entrepreneurs understand how big China is, what this huge market means, what the possibilities are to enter the Chinese market. “Appearing on the Chinese market is not a short term investment, it will require time, effort and money. At the same time, for those who are able to establish a foothold on the Chinese market, it will mean an unmissable opportunity. The difficulty that we try to explain to Hungarian firms is that their production potential is way too small compared to the size of the Chinese market and thus, they will have to join forces and cooperate with other Hungarian or regional companies in order to increase the production volume. A good opportunity to forge such partnerships was the China Brand Expo, which was held this year in Budapest, for Central and Eastern European companies. This September, there was a fair in Shandong Province where the Budapest-based CECZ (Central European Trade and Logistics Cooperation Zone) and ChinaCham had a booth for firms from seven CEE countries to present food industry products. This November, the China International Import Expo, where Hungary enjoyed great success in 2018, will take place for the second time. This year, there will be, in addition to the official Hungary pavilion and a Hungarian agricultural pavilion, a separate logistics pavilion where we expect companies that play a significant role to make Hungary a logistics and distribution center in Central Europe.”
The President admits that, given its size, Hungary will never be an important export destination country for Chinese goods nor will it mean an important manufacturing potential for China. If Hungarian firms join forces with companies in the neighboring countries, they could probably produce a quantity that is worth transporting to China but, he says the real opportunity for Hungary lies in logistics services. “The country’s geographical location is a great advantage for Hungary with a lot of international trade routes crossing here. One of the aims of the Hungarian-Chinese Chamber of Economy is to make Hungary a ‘stop-andgo' transit country that reaps the benefits of performing value added services like customs clearance, storage, repackaging into smaller quantities, labeling, etc. that generate much more income and higher employment for this country than simply income from transporting goods through the country.”
‘Culture brings us together’
For over five years, ChinaCham has been the organizer and supporter of the ‘Bridge of Music’ international choir festival that features Hungarian and Chinese participants as well as, more recently, choirs from neighboring countries. “It is wonderful how, after a tough competition, 300-500 people can sing together. It is important because culture brings us together, culture is a language that creates harmony among different nations and we can achieve a lot through culture. We also share in enhancing cooperation in education. One should note here that Europe’s only (elementary and secondary) school with the curriculum taught in the local language and Chinese is in Hungary. There are five Confucius Institutes in Hungary offering Chinese language courses. Hungary is one of the few countries – possibly the only in Europe – where Chinese is taught from elementary to university level,” Ernő Pető concludes.