China's Stronghold in Europe
In the heart of Europe, Hungary has become a significant hub for Chinese tech giant Huawei. The company, known for its leading role in 5G technology and smartphone manufacturing, has established a strong presence in the country.
Huawei's journey in Hungary began in 2009 when it established its Europe Supply Center in the city of Pecs. Fast forward to 2020, the company opened a Research and Development (R&D) center in Budapest, a move that came after Hungary refused to join President Trump's Clean Network Initiative.
The R&D center is not the only addition to Hungary's tech landscape. Huawei also operates a separate data center for Chinese and Asian companies in the region. This data center, along with the R&D center, is a testament to Hungary's welcoming environment for Chinese tech companies.
However, not all ventures have been successful. The first European campus of Fudan University, financed by a $1.5 billion Chinese loan, was planned for Budapest. However, due to opposition and deteriorating Sino-European relations, the project was shelved.
In October 2023, Hungarian firm 4iG signed a strategic agreement with Huawei in Beijing to develop cloud and artificial intelligence services. This collaboration is a step towards Hungary's ambition to become a regional hub for tech services.
Yet, Hungary's relationship with Chinese tech companies is not without controversy. Chinese police are entitled to joint patrols in Budapest's Chinatown and tourist areas under a 2023 Sino-Hungarian internal affairs agreement. This arrangement has raised concerns among some European nations.
Despite pressure from the U.S. and EU to limit Chinese acquisitions and reduce the use of Chinese high-tech in strategic sectors, Hungary is expected to continue cooperating with China in 5G technology and EV manufacturing. This stance could shift depending on the evolution of U.S.-China and EU-China relations.
It is worth noting that BYD, a Chinese automotive and new energy technology company, relocated its European headquarters from the Netherlands to Hungary due to strong Sino-Hungarian relations and growing resistance to Chinese companies in Western Europe.
If the current governing parties win the 2026 elections, Hungary is likely to maintain its position as an outlier within the West, resisting broader de-risking and decoupling trends. This stance, however, could lead to further tensions with the U.S. and EU.
In conclusion, Hungary's relationship with Chinese tech companies, particularly Huawei, is complex and multifaceted. While some view it as a strategic move for economic growth, others see it as a risky venture that could strain Hungary's relations with its Western allies. The future of this relationship will depend on the evolving geopolitical landscape and the decisions made by Hungarian policymakers.
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