China and Hungary have had a strong relationship since 1949, with significant exchanges in energy and infrastructure. Hungary plays a key role in economic ties between China and Central and Eastern European countries. The two nations support each other’s interests and cooperate in various areas, with bilateral trade reaching $14.52 billion in 2023. Major projects include a high-speed rail connecting Budapest and Belgrade, with Hungary welcoming increased Chinese investment in key sectors.

The relationship between China and Hungary dates to October 1949, during the first week of the formation of the People’s Republic of China. Over the years, this bilateral relationship has fostered significant exchanges in energy and infrastructure. Diplomatic ties between the two nations remain strong, characterized by regular high-level visits and dialogues. Both countries actively support each other’s core interests and cooperate within multilateral frameworks, including the United Nations and the China-Central and Eastern European Countries (China-CEEC) cooperation mechanism.

As a member of the 17+1 cooperation framework, Hungary plays a pivotal role in facilitating economic ties between China and Central and Eastern European countries. Hungary was the first European country to sign the BRI cooperation document with China, which aligned with Budapest’s “Eastern Opening” strategy. This enhanced bilateral practical cooperation in trade, investment, finance, and other areas. In fact, Hungary is the third-largest trade partner of China in the Central and Eastern European area, while China remains Hungary’s largest trade partner outside the European Union. In 2023, bilateral trade volume surged to US$14.52 billion, marking a remarkable 73 percent increase since 2013.

A major highlight of their cooperation is China’s financing of a high-speed rail project connecting the capitals of Hungary (Budapest) and Serbia (Belgrade).

Furthermore, the China (Xi’an) – Hungary Economic and Trade Cooperation Exchange Meeting, held in Budapest in June 2024, reflects Hungary’s eagerness for increased Chinese investment in sectors like modern agriculture, food processing, machinery manufacturing, geothermal and photovoltaic energy, and tourism.

China and Hungary have maintained robust bilateral trade cooperation, overcoming challenges and achieving substantial growth over the years. According to the China Economic Information Service (CEIS), bilateral trade between the two countries reached US$14.52 billion in 2023, representing a 73 percent increase compared to 2013.

The focus of this trade relationship lies in high-value-added machinery, electrical equipment, and advanced technology products. Specifically, the following categories of items account for over 80 percent of the bilateral trade volume: electric motors, electrical equipment and components; boilers, machinery and parts; vehicles and parts; and optical, photographic, and medical equipment and components.

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China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

The State Council released Fair Competition Review Regulations to ensure a level playing field for state-owned and private companies. Administrative authorities must conduct fair competition reviews of policy measures to prevent favoritism. Policy measures that restrict market access, flow of goods, or increase production costs will not be issued.

On June 6, 2024, the State Council released the final version of the Fair Competition Review Regulations (the “regulations), in an effort to “unify the domestic environment” and level the playing field between state-owned and private companies.

The regulations, which are based on China’s Anti-Monopoly Law, will require administrative authorities to conduct fair competition reviews when drafting laws, administrative regulations, local regulations, rules, normative documents, and policy measures (hereinafter collectively referred to as policy measures), to ensure that they do not unfairly favor certain market entities.

The regulations prohibit drafting authorities from including any content in policy measures that may negatively impact market access, the free flow of goods and resources, production and business costs, or production and business activities. Policy measures found to contain any such content during the review process (or that do not qualify for the exemptions, see below) will not be issued.

Specifically, the following content that may directly or indirectly restrict market access and exit cannot be included:

They also cannot include the following content that may restrict the free flow of goods and resources:

Without a legal or administrative regulatory basis or State Council approval, they also cannot include the following content that affects production and business costs:

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China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Industrial output growth in China has slowed, with robust performance in some manufacturing sectors but an increase in consumption driven by services, retail sales, and imports. Despite a slowdown, equipment manufacturing has been crucial in stabilizing overall industrial growth. Certain high-tech and electronic equipment manufacturing sectors have shown strong performance, while the automobile manufacturing sector has decelerated due to falling domestic demand.

The data indicates a slowdown in industrial output growth, despite some manufacturing sectors still showing robust performance. In contrast, consumption is on the rise, driven by growth in services, retail sales, and imports. The uptick in these areas suggests a strengthening of domestic demand, spurred by a stabilizing global economic situation and the boost from the Labor Day Holiday at the beginning of May.

China’s foreign trade also continued to show marked improvement, reflecting the country’s strong export capabilities and increasing imports.

Year-on-year growth in China’s industrial sector slowed in May from the previous month but remained relatively strong. Total industrial value-added output grew by 5.6 percent year-on-year in May, a month-on-month increase of 0.3 percent but a deceleration from 6.7 percent year-on-year growth recorded in April. Value-added output of the manufacturing industry grew 6 percent year-on-year, a deceleration from the 7.5 percent year-on-year in April.

According to NBS spokesperson Liu Aihua, equipment manufacturing played a crucial role in stabilizing overall industrial growth. The sector’s added value increased by 7.5 percent from the previous year, contributing 2.6 percentage points to the growth of all industries above the designated size and accounting for 45.7 percent of the total growth. Within this sector:

Certain high-tech and electronic equipment manufacturing sectors exhibited particularly strong performance:

However, the automobile manufacturing sector decelerated significantly from a 16.3 percent year-on-year jump in April to 7.6 percent year-on-year growth in May, possibly due to falling domestic demand.

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China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.