Relations between Hungary and China continue to strengthen

Tuesday, May 16, 2017

Minister for National Economy Mihály Varga concluded a Memorandum of Understanding (MoU) with leaders of China’s largest bank, the Industrial and Commercial Bank of China (ICBC) and the ICBC-founded Sino-CEE Investment Cooperation Fund in Beijing on Saturday. The profit-oriented capital investment fund plans to invest EUR 10bn in the Central and Eastern European region.

Mihály Varga has delivered a speech at the signing ceremony of the agreement concluded between the Shanghai Gold Exchange and the Budapest Stock Exchange on establishing a gold trading platform in Budapest.

The Minister also participated at a panel discussion on financing options in the framework of a conference under the “One Belt, One Road” initiative, where he met with finance ministers from several European and Asian countries and leaders of Chinese banks. The main topic of the session was finding new financial instruments for the projects of “One Belt, One Road”.

After Dubai and Toronto, the Shanghai Gold Exchange is about to launch its third gold trading platform outside of China in Budapest, of which an MoU was signed by representatives of the two exchanges in Beijing. Mihály Varga noted at the event that he found the singing of this agreement highly encouraging as it showed that, backed by mutual trust, rapidly developing Sino-Hungarian financial and economic ties have continued to grow stronger. As he pointed out, Hungary has last year successfully issued Hungarian government bonds on the Chinese market, and in 2015 the Bank of China opened its first European RMB clearing house in Budapest.

China announced the launching of the SINO-CEE Fund last year. The fund aims to obtain EUR 10bn and lend it in the CEE region for the financing of projects in the field of infrastructure development, up-to-date production facilities, mass consumer products as well as mergers and acquisitions. Hungary has been open to cooperation with the Fund, Mihály Varga stressed.

At a panel discussion held on Sunday the Minister said that as the economy was rebounding the market-based financing of the projects of domestic enterprises must gain more and more weight. Traditionally, loans are the number one option in the financing of Hungarian companies, whereas Anglo-Saxon enterprises tend to rely also on capital market instruments, he added. The domestic corporate bond market has a huge growth potential, and the Government expects Asian investors to get more involved in this field.

At the forum, the Minister also met with the representatives of several Chinese banks, among them the President of the Asian Infrastructure Investment Bank (AIIB). At the event, participating finance ministers issued a joint communique on directives concerning the fostering of financial cooperation within the “One Belt, One Road” programme and finding ways to channel new financing instruments into the real economy.

(Ministry for National Economy)


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