European leaders have struggled to formulate a unified Sino-European strategy, with some states echoing US calls for complete separation – or separation – while others have preferred a softer, derisive approach.
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Hungary’s foreign minister said on Tuesday that any move to separate, and even reduce risk, from China would be an act of “suicide” for Europe.
Péter Szijjártó said that severing ties with Beijing – one of Europe’s biggest trading partners and a significant source of foreign direct investment – would essentially kill the region’s economy.
“Each decoupling and risk mitigation would be suicide for the European economy,” Szijjártó told CNBC’s Sam Vadas on the World Economic Forum’s annual conference in Tianjin, China. “How was it possible to disconnect from production without killing the European economy?”
European leaders have to date struggled to formulate a unified Sino-European strategy, with some countries echoing US calls for complete separation – or separation – from Beijing, while others have preferred a more lenient approach to risk mitigation.
We take a look at China as a rustic with which you’ll be able to gain so much by cooperating.
Péter Szijjartó
Hungarian Minister of Foreign Affairs
The problem is a very delicate balance issue for Europe, which stays heavily depending on US support in Ukraine but additionally has critical economic ties with Beijing. In response to Eurostat, China was the biggest source of EU imports and the third largest buyer of goods from the EU in 2022.
Szijjártó, for his part, said that Hungary – which maintains far more cordial relations with China than some of its European counterparts – doesn’t see China as a threat or risk and due to this fact sees no reason to “reduce risk”.
“We take a look at China as a rustic that, for those who work with it, you’ll be able to get so much out of it,” he said.
Hungarian-Chinese ties are strengthening
Beijing is Budapest’s largest trading partner outside the European Union and its largest investor this 12 months. Szijjártó said he expects Chinese foreign direct investment within the country to double this 12 months, from €6.5 billion ($7.1 billion) to €13 billion.
Most of last 12 months’s influx was attributable to a €7.6 billion investment – Hungary’s largest ever – by Chinese battery maker Contemporary Amperex Technology Co. Limited right into a latest factory on this country. The plant is to serve automobile manufacturers from factories in Hungary, including Mercedes Benz, BMWAND VW.
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Szijjártó said such investments have highlighted Hungary’s key role within the European automobile industry and its strategic importance within the region – especially within the context of carmakers’ transition to electric vehicles.
“These large Chinese investments are coming to Hungary because of the presence of German carmakers in Hungary,” Szijjártó said.
“So when the German foreign minister talks about separation, I’m often called by the CEOs of German carmakers to persuade their Chinese suppliers to come back to Hungary,” he continued.
“There may be an enormous gap between political perception and reality on the bottom. Decoupling would kill the European economy and would be very damaging to the German economy as well.”
Describing the political atmosphere in Europe as “very ideological, very emotional”, Szijjártó said it was futile to treat China as a rival and urged other European leaders to face this “reality” more rationally.
“It’s obvious that if you need to compete with China, if you need to take a look at China as a competitor for us, then we Europeans will lose out,” he said.
“Why don’t we return to the fundamentals of rationality, common sense, reality and pragmatism, and why don’t we start forging a fair closer relationship with China than before.”
His words come as allies within the bloc query China’s growing assertiveness, especially amid rising tensions over Taiwan and Beijing’s support for Russia’s war with Ukraine.