Chinese firms in Hungary face a post-election reckoning – no matter who wins

Travellers stepping out of the railway station at Hungary’s second-biggest city, Debrecen, are immediately greeted by a banner hanging over the street that reads “No battery, no deal”, “Debrecen belongs to Hungarians” and “Chinese, go home”.

The banner was put up by the local candidate from Jobbik, a small conservative party, formerly far-right, with little chance of winning. But it highlights how deeply Chinese business interests have become entangled with Hungarian politics, with the country attracting billions of US dollars of Chinese investment in recent years.

Some worry the Brussels-friendly Tisza party – which has been leading in opinion polls ahead of the election – would saddle them with EU red tape or seize their factories as it unpicked deals struck with Orban’s government, which has been in power since 2010. Others have urged calm, saying Tisza’s tone had been measured so far, and policies were bound to change regardless.

“Some Chinese companies are seriously worried that the opposition party might seize their factories once they come to power,” one source said.

Budapest rolled out generous incentives to attract Chinese firms – subsidies, tax breaks and special work visa arrangements for companies seeking a foothold in the EU. But doing business in the country came at a price: corruption has flourished in Hungary under Orban, with the country ranked the European Union’s most corrupt nation by Transparency International.

Many Chinese firms rushing to Hungary to set up factories found they had to deal with a system built around Orban and his confidants, with favours constantly requested as they sought to advance their projects.

The source said one Chinese company bought land in the northwest of the country with someone who was supposedly a classmate of one of Orban’s friends for the equivalent of 80 million yuan (US$11.7 million) – expensive for rural Hungary.