The new Chinese economic policy affects Hungary as well
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China recently made it clear to its electric car manufacturers that they should keep technology and the production of key components in China, and limit their foreign expansion to assembly plants. This step is not surprising, as China has long pursued an industrial policy aimed at strengthening technological self-sufficiency and reducing foreign dependency. This endeavor has only intensified with the escalation of international political tensions, and the latest guidelines from the Chinese Communist Party have also confirmed increased state supervision of strategically important sectors.
The goal is clear: China aims to achieve global leadership by encouraging domestic innovation and supporting technological development. At the same time, private companies must also serve the achievement of national strategic goals. This step is also a response to the European Union’s efforts to force Chinese car manufacturers to relocate their production capacities to Europe and share their technology by introducing tariffs. However, China is unwilling to give up its hard-won technological advantage and resists pressure.
The Chinese model does not allow for the extensive involvement of foreign suppliers and the release of technological knowledge. China previously used a similar strategy with foreign companies, but now resists similar efforts by the EU. The Chinese decision could be a warning sign for Hungary as well, which hopes to boost its economy by investing in the Chinese electric car industry. However, Chinese companies are unwilling to transfer their technology and keep most of the production in China.
This trend is not unique to China. Western companies are also increasingly less likely to share their technologies, and it is becoming increasingly difficult for developing countries to find breakthroughs in the manufacturing industry. Examples from Hungary, such as the BYD factory in Szeged and the cathode factory in Ács, clearly demonstrate this trend. Chinese companies do not bring key technologies to Hungary, and a significant part of the added value remains in China.
The Chinese government also restricts investments in countries that pose a political risk. The cases of India and Turkey also exemplify this. China therefore prioritizes maintaining its technological advantage and does not yield to foreign pressure. All this means that Hungary must realistically assess the expected benefits from Chinese investments and must not lull itself into the illusion of technological catch-up. Chinese companies primarily pursue their own interests and not the development of the Hungarian economy.
The article also points out that the manufacturing industry is no longer necessarily a breakthrough opportunity for developing countries. Hungary needs to diversify its economy and focus on areas where it can create real added value and does not have to rely on the technology of others.
Based on the article in G7.