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Prime Minister Viktor Orbán’s speech at the financial summit of the Asia Financial Cooperation Association (AFCA)

Good afternoon, Ladies and Gentlemen,

If I am informed correctly, I can speak in the Hungarian language. We have already one Chinese and one English speech, so now if you don’t mind I will speak Hungarian. Sorry.

On my way here to meet you I asked myself why I’d been invited. After all, I knew there would be bankers here, and the friendship between bankers and politicians is reminiscent of that between cats and dogs: each is needed in a household, but at the end of the day each and every one has their own distinct character. It always arouses suspicion if a prime minister is invited to meet bankers. But then it occurred to me that the reason might be that the policy we refer to as “Eastward Opening” – which in 2010 marked a new direction in foreign affairs and trade – was devised and championed by the government of which I was prime minister, and in which Governor Matolcsy was Minister of Economy. It felt a little like being invited back home: you have asked me to be with you at a successful stage in a policy in which the Hungarian government in office in 2010 also had a hand.

Ladies and Gentlemen,

We can now answer the question of why I’m here. But then the question is why the Chinese have come here to us. Naturally, one possible answer is that we have invited them; and as China is renowned for being a polite country, they have accepted our invitation. But, in light of the fact that Hungary’s size is hardly comparable with that of China, we must admit that it’s very difficult to pinpoint why Chinese-Hungarian relations have now become so strong. The size and performance of Hungary’s economy are also not comparable with those of China’s; the Hungarian defence force’s military strength likewise fails to explain why our Chinese friends are not instead visiting a military superpower. Why, then, have they come here? Why is Chinese-Hungarian cooperation so successful? It’s difficult to give an exact answer to this question, but perhaps it’s worth searching for an answer in history. We don’t know exactly why, but at some time towards the end of the 1940s, when we had a completely different political system, Hungary was the first country in Europe to recognise the People’s Republic of China. So there is a history of cooperation between the two countries going back many decades, and although we’re not a big country, our history is long, and we like to think in terms of history. At the same time, we also respect everything that our parents and grandparents did to promote Chinese-Hungarian friendship.

But then again, we may also consider the fact that something happened in Europe in 2010. In 2008 there was a financial crisis. And throughout 2008, 2009 and 2010 we European prime ministers – all twenty-seven, twenty-eight of us – were continuously racking our brains to understand the nature of the financial crisis. We had two options to consider. According to one interpretation, the crisis was a mere cyclical phenomenon, as there are ups and downs in the world economy, and we had simply entered a downward phase. This could therefore be seen as something normal, and, as our institutions are strong and our policies are sound, things would fall back into place again – just as always happens at such times. A downward phase would be followed by an upward one, and there was nothing particular for us to do: we would just need to hold on, survive, and carry out minor adjustments. The other possible interpretation was that the crisis was not cyclical in nature, but structural. According to this way of thinking, in reality the crisis showed Europe that it needed to implement deep wide-ranging reforms in order to remain competitive in the decades ahead. To this day there are European countries and European leaders who believe that the 2008 financial crisis was a cyclical phenomenon. And there are others – Hungary among them – that were already arguing in 2010 that the crisis was structural, and that extensive reforms were required if we Europeans – Westerners and Central Europeans – wanted to remain competitive in comparison with the emerging new economic powers. Hungary was the first country to openly declare this assessment of the situation, and it drew the necessary conclusions.

When we spoke about Eastward Opening in 2010 we said that we needed to go to China. We said we needed to make contact with the leaders of the Communist Party and the state leadership there, and we needed to make contact with representatives of the Chamber, industrial capital and financial capital. All this meant that we had drawn the conclusions arising from the fact that a new era was about to begin. And, ever since, on every issue Hungary has been among the first to make a move: we were the first to welcome the President’s One Belt One Road Initiative; we were the first to attend the conference on this initiative; and we were the first to sign the relevant agreements. And I could go on.

Ladies and Gentlemen,

In other words, in the rise of China we see the manifestation of a new era in the world economy. We believe that this historic occurrence will not be transitory: in our view, it will be enduring. It will be a dominant factor in the development of the world economy for a long time to come, and sooner or later everyone will have to adjust to this new reality.

Honourable Chinese Guests,

Here in Europe There is a debate about whether or not Chinese economic growth is slowing down. I’m always amused when I hear these debates. In Europe it is a widely-held belief that Chinese growth has slowed: it stands at 6.9 per cent. Here also, the opposition regularly says things like this about Hungarian growth: they sometimes claim that it’s slower than it should be, while at other times they argue that it’s barely reaching its potential. We know, however, that when we speak about growth we shouldn’t just calculate it as a percentage of GDP, but also consider its volume. And when one looks at the size of the Chinese economy, a growth rate of 6.9 per cent of GDP is a tremendous number. This is an enormous figure that in Europe is hard to comprehend. We know very well that 6.9 per cent growth in the volume of the Chinese economy means that in the years ahead – indeed in the decades ahead – China will require enormous amounts of imports. And China will also need to relocate production capacity to parts of the world outside its borders. The truth is that this is a competition. Every country outside China – including every European country – is competing for the economic opportunity of supplying goods to China and receiving investments from China. What, then, is the reason for Europe’s atmosphere of discord in relation to China’s growth?

Honourable Chinese Guests,

The fact of the matter is that everyone appreciates that the situation is just as I’ve described it, except there are some who talk about it and others who don’t – and still others who don’t talk about it, but act on it. If I take a good look at the trade aspirations of the European Union’s Member States, if I take a good look at their figures, I can see that every country has already entered the competition to become as integral as possible to the development of the Chinese economy, to supply goods to China and to receive investments from China.

Ladies and Gentlemen,

We believe that in this competition Hungary is in a good starting position. Indeed, I have to say that we are the Central European country in the best position in the competition for cooperation with China, as we’re the Central European country sending the largest volume of exports to China and receiving the highest volume of investments from China. We have a competitive environment, we have an economic system with low taxes, we have an economic policy based on common sense rather than ideology, we are in a favourable geographical location, and there is great mutual respect between China and Hungary.

Ladies and Gentlemen,

If we simply consider that in 2016 alone our exports to China amounted to 2.25 billion dollars – two billion, two hundred and fifty million dollars, and this year’s figure will be much higher – I can say that last year Hungarian businesses raised revenues of 600 billion forints from exports here in Hungary. In a Hungarian context, and in terms of Hungary’s size, this is an enormous achievement, and an important element in Hungarian economic policy.

Ladies and Gentlemen,

After all, we have gathered together here to discuss the financial background to this process in economic history, foreign trade and the real economy. I was pleased to hear those who spoke before me. As far as I can see, as part of the cooperation between the Chinese and Hungarian banking sectors, a financial background has been created for future economic cooperation, development of trade and investment policy. Here today we are all celebrating a clear instance of this. I would like to thank the representatives of the Chinese banking system. Earlier I had the opportunity to congratulate the Governor of the Central Bank of China. Now I would also like to thank the executives of the commercial banks that are represented here today, for having created the financial background and foundations of Chinese-Hungarian economic cooperation. Thank you very much. We sincerely hope that you will continue to finance Chinese-Hungarian economic cooperation in the future, and that in consequence the policy of Eastward Opening launched in 2010 can every year break ever more records in foreign trade and investment between China and Hungary.

Thank you for your attention.