China's Eastern Europe strategy: £11.9bn in Hungary, £8.4bn in Serbia
Since 2003, Chinese companies' investment expenditures in Hungary have amounted to £11.9 billion. Serbia, on the other hand, has received Chinese investments amounting to £8.4 billion, reports say. Thanks to Beijing, both countries occupy a unique position in Europe.
Analyses of the Polish Economic Institute show that Hungary and Serbia have dominated the Chinese investment market in Central and Eastern Europe. "Since 2003, Chinese companies' investment expenditures in Hungary have totaled £11.9 billion. Serbia, on the other hand, has received Chinese investments totaling £8.4 billion.
As a result, these two countries account for one-quarter of all Chinese greenfield FDI in the EU and Serbia," writes the author of the analysis.
China is investing heavily in two European countries
Dr. Dominik Kopiński highlights in his article that, in relative terms, Hungary and Serbia are at the forefront in Europe. The value of all Chinese greenfield investments about GDP for 2022 was 8% in Hungary and as much as 17% in Serbia, while, per capita – £1,242 for Hungary and £1,275 for Serbia.
As he points out, the influx of declared Chinese investments in both countries accelerated significantly in 2018. From January 2018 to March 2024, nearly one in three greenfield FDI dollars came from China (Hungary – 29%, Serbia 31%).
The high position of China among foreign investors in Hungary and Serbia is primarily due to political conditions. Hungary is a particular case among EU countries in terms of shaping relations with Russia and China. Serbia has also significantly reduced its relations with the EU in favour of China in recent years, reads the report.
Thanks to these investments, Hungary and Serbia have ranked 2nd and 4th in Europe, respectively, in terms of declared Chinese greenfield FDI in absolute terms.
Orban attracts China
PIE emphasizes that the scale of investments in recent years is unprecedented. Half of all Chinese greenfield FDI in Hungary (£6 billion) has been absorbed by the construction of a giant battery factory near Debrecen by CATL, a £1.2 billion investment by Huayou Cobalt (cathode material for batteries), and a £900 million investment by Eve Energy (batteries).
A relatively small investment will be the planned first Chinese electric car factory in Europe by BYD in Szeged. As a result, with only 81 projects, the average value of investments involving Chinese capital in Hungary is £147 million (compared to the EU average of £32 million for Chinese investments).
Chinese investments in Poland? Here are the data
Similarly in Serbia, two announced investments by Zijin Mining Group in 2023 for the expansion of a copper mine and renewable energy projects doubled the average value of projects involving Chinese capital from £71 million to £158 million, writes Dr. Dominik Kopiński.
He specifies that in Poland, Chinese greenfield FDIs cumulatively for the entire period 2003-2024 (March) amount to £2.1 billion (a total of 86 projects). "This means that concerning Poland's GDP for the year 2022, it is only 0.38%, and per capita £57," writes the PIE expert.
Greenfield investments are a type of direct investment where a foreign company builds its operations in another country from scratch - on a "green field." Unlike "brownfield investments," where a company purchases or leases existing facilities for operations, greenfield investments start from unused land and require more significant capital investments.
