In the European Parliament on Wednesday, EU Commission President Ursula von der Leyen had clear words for Hungary’s head of government Viktor Orbán: He is endangering the security of the EU with his policy towards China and Russia. “How can it be that the Hungarian government allows the Chinese police to operate on its territory? This is not a defense of Europe’s sovereignty, this is a backdoor for foreign interference”, said von der Leyen, directly addressing Orbán in the plenary chamber.
Hungary is still the EU country that is most friendly towards China – for its own benefit, of course. Orbán wants the country to become a global center for battery and electric vehicle production, supported by billions in investment from China, as Christian Domke Seidel analyzes. However, the industry there is not having an easy time of it: Sales of electric vehicles in Europe are stagnating and production in Hungary has also seen a significant decline. In the long term, however, their use could still be worthwhile.
Our second analysis looks towards the Taiwan Strait. Whenever there are important political events in Taiwan, China reacts with military maneuvers. This Thursday, too, the People’s Liberation Army is expected to accompany Taiwan’s national holiday with threatening gestures. The USA and others have long been preparing for an emergency, writes Angela Köckritz. US Admiral Samuel Paparo even declares that the US could turn the Taiwan Strait into a “hellscape” in the event of an invasion – a combat zone full of unmanned submarines and drones that would make life hell for the attackers. But how likely are such scenarios really?
It’s almost a ritual. Whenever important political events are currently scheduled in Taiwan – elections, important state visits, swearing-in ceremonies – the Chinese leadership responds with military maneuvers. And so Taiwanese security authorities are expecting the Chinese People’s Liberation Army to hold military exercises off the island again this Thursday when Taiwanese President William Lai Ching-te delivers his speech on Taiwan’s National Day. This is exactly what happened when Lai took office in May.
In a draft of this speech, which was leaked to the Reuters news agency on Wednesday, Lai refers on the one hand to the “chaos” emanating from Beijing and the “harassment” from which Taiwan is suffering. On the other hand, he affirmed that he wanted to follow the path of his predecessor Tsai Ing-wen, and responsibly maintain peace and stability in the Taiwan Strait. The threatening gestures mentioned by Lai have indeed increased in recent times, in Japan, the South China Sea, but above all around Taiwan. “Reunification”, declared CP General Secretary Xi Jinping before China’s National Day last week, “is an irreversible trend, a matter of justice that is in line with the general will. No one will be able to stop the course of history.”
But because not everyone believes that history should take the course that Xi Jinping has mapped out, Taiwan and its unofficial allies, above all the USA, are trying to deter Xi from taking military action. Xi Jinping wants the People’s Liberation Army to be so well prepared by 2027 that it can take Taiwan. At least that is what American intelligence suggests. Which does not mean that Xi would then command the invasion. Whether he actually gave this order or not, it has alarmed American politicians and security experts. Billions of US dollars flowed to the US forces in the Pacific as a result.
China’s most likely strategy is a massive attack without much warning, Admiral Samuel Paparo, the new head of the US Indo-Pacific Command, told the Washington Post. However, the Chinese would not rush into such a conflict unprepared and prematurely. After all, Xi does not want to repeat Putin’s mistake of expecting a quick victory in Ukraine in February 2022 and instead engaging in a hard war of attrition.
Paparo is preparing a response to this, which he calls “hellscape“. The moment a Chinese invasion fleet prepares to cross the Taiwan Strait, the US military would send thousands of unmanned submarines, ships and drones there. “I would turn the Taiwan Strait into an unmanned hellscape”, says Paparo. “So I can make their lives really miserable for a month. That gives me time for everything else.”
The USA has traditionally pursued a policy of “strategic ambiguity”. They are keeping an open mind as to whether they would stand by Taiwan in the event of a Chinese attack. In doing so, they want to deter both China and Taiwan from taking risky steps and maintain the precarious status quo. However, President Joe Biden has repeatedly stated that he would provide Taiwan with military support in the event of an emergency.
At best, Taiwan could defend itself alone against a Chinese invasion for a short time, until the American military and possibly also Japanese troops come to the island state’s aid. Both the USA and Japan – like many other states – have a strong vested interest in ensuring that Taiwan does not fall under the rule of the Chinese Communist Party.
Taiwan is so strategically important that US General Douglas MacArthur once called it an “unsinkable aircraft carrier”. The island state is not only the most important chip manufacturer in the world, but also the only democracy in the Chinese cultural area. Nevertheless, the question of whether the US government would send American troops to Taiwan is a politically sensitive one. Surveys investigating the willingness of Americans to support Taiwan with troops have recently shown strongly fluctuating results. While 52% of Americans answered this question in the affirmative in 2021, the figure was only 38% in 2023.
American military advisors have been urging the Taiwanese government to adopt the so-called porcupine strategy of asymmetric warfare for some time now. Instead of investing its budget in prestigious purchases such as F-16 fighter jets or the development of its own submarines, it should rather buy large quantities of light mobile weapon systems such as Javelin or HIMARS, which have already proven to be very useful in Ukraine. This is because, according to US experts, submarines and fighter jets could be quickly destroyed by targeted bomb attacks in the event of a Chinese invasion.
In reality, however, this is not so easy, says Lai I-Chung, President of the government-affiliated think tank Prospect Foundation, in an interview with Table.Briefings. “After all, we also have to be able to deal with the challenges of Chinese ‘Greyzone Warfare’ on a daily basis.” The Communist Party is trying to exhaust the Taiwanese with a hybrid threat of military threat gestures, cyberattacks, economic pressure and disinformation campaigns, with Chinese fighter jets entering Taiwan’s air defense zone daily – Taiwan needs fighter jets to drive them away, Lai says, and submarines to prevent Chinese warships from reaching the eastern side of the island. “Meanwhile, we are not only seeing many Chinese patrol boats in the Taiwan Strait, but also many warships in the Pacific”, says Lai. “The pressure is getting stronger and stronger. This is not just political posturing, but a real danger.”
For a long time, the Taiwanese were very relaxed about the possibility of a Chinese invasion. Military service had recently been shortened to four months, and many recruits described it as a kind of “summer camp”. Foreign visitors traveling to the country for the first time were surprised to note a lifestyle of almost Southeast Asian ease – despite a geopolitical conflict that had been fermenting for decades.
According to a survey published on Wednesday by the Institute for National Defense and Security Research (INDSR), the country’s main military think tank, a large proportion of Taiwanese believe a Chinese invasion in the next five years is unlikely. Around 74 percent of the 1,200 respondents believe that the US government would help Taiwan “indirectly” by providing food, medical supplies and weapons. But only 52 percent think that the US military would send its forces to intervene.
This belief is also reflected in military service, which has already been extended to one year under President Tsai Ing-wen. An overwhelming majority of Taiwanese are in favor of this. The Taiwanese defense budget is also set to increase by six percent next year, and the government wants to raise public awareness of the hybrid threat with a newly founded “Committee for the Resilience of Society as a Whole”. “Friends in the government told me that the president personally ordered that no one should talk about having nothing to fear before 2027”, says Lai I-Chung. “He fears that this could make people sluggish. We should also send a signal to foreign countries that we take our defense seriously.” The Taiwanese government also supported the production of a TV series called Zero Day, which is due to be broadcast next year. It shows the apocalyptic scenario of a Chinese attack. Hopefully it will remain fiction.
Under Viktor Orbán, Hungary has focused on becoming one of the largest battery and electric vehicle producers in the world. Chinese investment in particular is helping to build up the infrastructure. However, business is not going well at the moment because EV sales in Europe are not taking off. Industrial production in Hungary has fallen by around six percent this year, as Bloomberg calculates. In the long term, however, the calculation could work out, as Alexander Brown, Senior Analyst at the Mercator Institute for China Studies (Merics), also emphasizes.
And Chinese investors also seem to have identified future opportunities in Hungary, as the financial flows show. “According to Rhodium’s analysis, around three billion euros flowed into Hungary from China in 2023. The year before, it was €1.5 billion”, Brown calculates. It should be noted that Rhodium only includes money that has actually flowed from China in the calculation. Subsidies paid or sums announced are not included in the analysis.
And the proportion of investment in Europe that Hungary is able to secure for itself is also increasing. “It is remarkable how much of the Chinese investment in Europe plus the UK flows to Hungary. The share was 21 percent in 2022 and 40 percent in 2023 – that’s very impressive”, Brown continues. Even if the total amount of investment has fallen massively. In 2023, it was still €6.8 billion – the lowest it has been since 2010. The high point was 2016 with €47.5 billion.
One of the most impressive projects is CATL’s battery production. The company wants to invest a total of €7.5 billion, create 9,000 jobs and produce 100 gigawatt hours of battery capacity – enough for around 430,000 electric vehicles. However, it is unclear when these figures will be reached. Production is scheduled to start in 2025 and the first 3,000 people are to be employed by 2026. Provided everything goes according to plan.
However, battery production and exports are currently not running smoothly in Hungary. Both reached their temporary peak in 2023. In 2024, both are in sharp decline. This is mainly due to the fact that Hungary’s focus on the electric vehicle market has made it heavily dependent on its development. And sales are not picking up in Europe. The German manufacturers, who also all operate plants in Hungary, are in a severe crisis – especially in the electric vehicle sector.
Hungary may therefore have launched the offensive in this area a little too early. However, this does not mean that it is wrong. Even before the plans, the country was hugely important for car production. “The question is how big the market for electric vehicles will actually be and how fast it will grow in Europe”, says Brown. There are a lot of uncertainties at the moment. But there will definitely be a steadily growing demand. “Europe will probably only have two or three major centers for the production of EVs”, Brown believes. And Hungary is likely to be one of them.
“I think it’s important to mention first of all that investment in Hungary makes perfect sense from an economic point of view. I don’t see it as a purely politically motivated move”, says Brown, assessing the increasingly close relations between Hungary and China. Around 700 different suppliers and various original equipment manufacturers produce in the country. Hungary was already a hub for the automotive industry before the increased interest from China.
However, it is also clear that Viktor Orbán is one of Xi Jinping’s closest allies. This also became clear during his most recent visit to Europe. The Chinese head of state visited France, Serbia and Hungary. The tone of the talks in Paris was much more critical and confrontational than in well-disposed Hungary. “This relationship works both ways. Orbán’s government has been very active in trying to build a friendlier relationship with Asian countries and has undoubtedly been successful in establishing some economic cooperation with China. And Beijing is making friends within the EU who are somewhat more sympathetic to Chinese policy“, Brown analyzes.
However, when it comes to tariffs, we have seen that individual issues are being discussed in a much more pragmatic way. Both Germany’s Chancellor Olaf Scholz and Spain’s Prime Minister Pedro Sánchez have positioned themselves against the introduction of tariffs. According to Brown, tariffs on electric vehicles could once again bring a new dynamic to investment flows. “I have the impression that tariffs would lead to more investment. If you introduce tariffs, it’s cheaper for companies to produce locally than to export to the market.” In addition, there is enormous growth potential in the European electric car market – precisely because it has not yet taken off to the same extent as the Chinese market – which would make it one of the most important in the world.
However, Hungary is also reaching its limits in terms of growth. Despite a weak economy due to low export figures, the unemployment rate is just 4.4 percent. Labor is therefore in short supply. Many Chinese companies therefore prefer to bring the skilled workers they need with them. Hungarians, who also pay the subsidies and tax breaks for the relocations with their taxes, are therefore not benefiting to the extent that Orbán likes to be celebrated for.
The EU Commission is preparing a strategic dialog on the future of the automotive industry. The aim is to identify ways in which the automotive industry can emerge from the crisis and solve Europe’s problems within a few months.
A high-ranking panel of experts is to deal comprehensively with key issues: Will the fines for manufacturers for failing to meet the 2025 climate targets remain in place? Should the CO2 fleet limits be adjusted in 2030 and 2035? Should the 2035 phase-out of combustion engines for cars and light commercial vehicles be maintained? The development of the charging infrastructure and the use of data generated during driving could also become an issue.
The strategic dialogue on the future of the automotive industry is to be organized along the lines of the strategic dialogue on agriculture. Under the leadership of Peter Strohschneider, experts, industry representatives and NGOs developed a vision for the industry within seven months. Commission President Ursula von der Leyen had signaled that she would implement the recommendations. According to reports, the commission is still looking for a person who can moderate the dialog with the automotive industry.
Von der Leyen has met the CEOs of the German car manufacturers in Strasbourg over the past few days: Oliver Blume from VW, Ola Källenius from Mercedes and Oliver Zipse from BMW. There had been no such meetings during her first term of office.
The CEOs are still trying to achieve changes to the countervailing duties on electric vehicles produced in China, which are due to take effect at the end of October. When it comes to CO2 regulation, the interests of the company bosses are diverging: While VW is calling for the suspension of penalties under the CO2 fleet legislation, BMW CEO Oliver Zipse is arguing against this. BMW has invested a lot to meet the targets. VW will foreseeably miss the targets and must expect fines in the billions. Zipse demands openness to technology for the 2030 and 2035 targets. Blume is in favor of sticking with the phase-out of the combustion engine.
In Berlin, VW has already submitted customized proposals to solve its own sales problems with EVs: VW is calling for an EV premium of €4000 up to a purchase price of €65,000, a premium of €2500 for used EVs and a reduced VAT rate on EVs for two years. Competitors are disconcerted and the lobbying battle is in full swing. mgr
Jozef Síkela (57), currently Czech Minister for Industry and Trade, had been considered for all possible portfolios in the new EU Commission: migration, energy, and most recently trade. Czech Prime Minister Petr Fiala had expressed his desire for a “strong economic portfolio” for his country. He was counting on Brussels to remember how skillfully Síkela had brought the member states onto a common course against Putin’s gas war during the Czech EU Council Presidency in the second half of 2022.
It did not help. The opposition in Prague and the country’s media were disappointed that the country had been “fobbed off” with a “rather uninfluential, vague portfolio” such as that of the Commissioner for International Partnerships. The magazine Reflex wrote: “We have once again lost the battle for a really strong economic portfolio. This has been happening for 20 years, ever since we joined the EU. It has once again shown that our influence within the EU is limited.”
Prime Minister Fiala, who is primarily blamed for this, talked up Síkela’s future role: “He will manage the largest budget ever managed by a Czech commissioner, he will decide on investments in the Global Gateway program of up to €300 billion”, he wrote on X. However, the €300 billion is a highly dubious sum, as it comprises the entire investment volume that the program is supposed to “mobilize”, including capital from private individuals and national development banks.
Jozef Síkela himself said that the portfolio of Commissioner for International Partnerships “will give me the opportunity to focus on strengthening economic security, diversifying our suppliers of critical raw materials and opening up new markets for European companies”. Essentially, he will have to ensure that Beijing’s Belt and Road Initiative (BRI) in particular faces real competition from the EU. So far, the infrastructure initiative from Brussels still lacks momentum.
Síkela recently emphasized at a conference in Prague that Europe must reduce its dependence on raw materials such as gas, oil, nuclear fuel, lithium, and cutting-edge technologies such as chips. “Deepening cooperation with trustworthy countries through trade agreements will help us achieve this.”
In order to reduce this dependency – mostly on China – von der Leyen wants to focus on “Clean Trade and Investment Partnerships”, which Síkela is to implement together with the designated Trade Commissioner Maroš Šefčovič. Given the more difficult environment for new trade agreements, the Commission wants to focus more on targeted partnerships.
Market opening through such partnerships should be limited to just a few sectors, but should be accompanied by European investment in partner countries. In this way, partner countries rich in raw materials should be able to keep a larger share of the value added in their own country and the EU should be able to reduce its dependency on China at the same time. Because of the EU’s great dependence on many raw materials, the need for investment is likely to be very high.
Assuming that the EU also supports its resilience goals with the necessary funds, Síkela’s dossier is likely to gain in importance. He will also benefit from his experience in the financial sector.
He worked for several years at Österreichische Creditanstalt, Bank Austria and Erste Bank. After the successful consolidation of Erste Bank in Ukraine, he led the Slovak Savings Bank to the top as CEO, achieved record results with it and was honored as Banker of the Year. Síkela, who speaks German, English and Russian, later became a member of the Management Board of Erste Group Bank AG.
Whether Jozef Síkela can also turn the Global Gateway project into a kind of European economic development bank will depend on how much funds the governments of the member states will entrust to it. Hans-Jörg Schmidt
Mushroom picking is a trend of the season among young Chinese people. On social media channels such as Xiaohongshu, they showcase their finds and often post where they found them. Yunnan, Sichuan and Zhejiang are particularly popular provinces for mushroom poses, as they have the best climate for their growth. In Yunnan alone, there are 900 varieties of mushrooms, 36 percent of which are edible. This is not the only place where mushroom glamping tours are now offered, where you can spend the night in idyllic scenery and prepare the mushrooms you pick under supervision on site.
In the European Parliament on Wednesday, EU Commission President Ursula von der Leyen had clear words for Hungary’s head of government Viktor Orbán: He is endangering the security of the EU with his policy towards China and Russia. “How can it be that the Hungarian government allows the Chinese police to operate on its territory? This is not a defense of Europe’s sovereignty, this is a backdoor for foreign interference”, said von der Leyen, directly addressing Orbán in the plenary chamber.
Hungary is still the EU country that is most friendly towards China – for its own benefit, of course. Orbán wants the country to become a global center for battery and electric vehicle production, supported by billions in investment from China, as Christian Domke Seidel analyzes. However, the industry there is not having an easy time of it: Sales of electric vehicles in Europe are stagnating and production in Hungary has also seen a significant decline. In the long term, however, their use could still be worthwhile.
Our second analysis looks towards the Taiwan Strait. Whenever there are important political events in Taiwan, China reacts with military maneuvers. This Thursday, too, the People’s Liberation Army is expected to accompany Taiwan’s national holiday with threatening gestures. The USA and others have long been preparing for an emergency, writes Angela Köckritz. US Admiral Samuel Paparo even declares that the US could turn the Taiwan Strait into a “hellscape” in the event of an invasion – a combat zone full of unmanned submarines and drones that would make life hell for the attackers. But how likely are such scenarios really?
It’s almost a ritual. Whenever important political events are currently scheduled in Taiwan – elections, important state visits, swearing-in ceremonies – the Chinese leadership responds with military maneuvers. And so Taiwanese security authorities are expecting the Chinese People’s Liberation Army to hold military exercises off the island again this Thursday when Taiwanese President William Lai Ching-te delivers his speech on Taiwan’s National Day. This is exactly what happened when Lai took office in May.
In a draft of this speech, which was leaked to the Reuters news agency on Wednesday, Lai refers on the one hand to the “chaos” emanating from Beijing and the “harassment” from which Taiwan is suffering. On the other hand, he affirmed that he wanted to follow the path of his predecessor Tsai Ing-wen, and responsibly maintain peace and stability in the Taiwan Strait. The threatening gestures mentioned by Lai have indeed increased in recent times, in Japan, the South China Sea, but above all around Taiwan. “Reunification”, declared CP General Secretary Xi Jinping before China’s National Day last week, “is an irreversible trend, a matter of justice that is in line with the general will. No one will be able to stop the course of history.”
But because not everyone believes that history should take the course that Xi Jinping has mapped out, Taiwan and its unofficial allies, above all the USA, are trying to deter Xi from taking military action. Xi Jinping wants the People’s Liberation Army to be so well prepared by 2027 that it can take Taiwan. At least that is what American intelligence suggests. Which does not mean that Xi would then command the invasion. Whether he actually gave this order or not, it has alarmed American politicians and security experts. Billions of US dollars flowed to the US forces in the Pacific as a result.
China’s most likely strategy is a massive attack without much warning, Admiral Samuel Paparo, the new head of the US Indo-Pacific Command, told the Washington Post. However, the Chinese would not rush into such a conflict unprepared and prematurely. After all, Xi does not want to repeat Putin’s mistake of expecting a quick victory in Ukraine in February 2022 and instead engaging in a hard war of attrition.
Paparo is preparing a response to this, which he calls “hellscape“. The moment a Chinese invasion fleet prepares to cross the Taiwan Strait, the US military would send thousands of unmanned submarines, ships and drones there. “I would turn the Taiwan Strait into an unmanned hellscape”, says Paparo. “So I can make their lives really miserable for a month. That gives me time for everything else.”
The USA has traditionally pursued a policy of “strategic ambiguity”. They are keeping an open mind as to whether they would stand by Taiwan in the event of a Chinese attack. In doing so, they want to deter both China and Taiwan from taking risky steps and maintain the precarious status quo. However, President Joe Biden has repeatedly stated that he would provide Taiwan with military support in the event of an emergency.
At best, Taiwan could defend itself alone against a Chinese invasion for a short time, until the American military and possibly also Japanese troops come to the island state’s aid. Both the USA and Japan – like many other states – have a strong vested interest in ensuring that Taiwan does not fall under the rule of the Chinese Communist Party.
Taiwan is so strategically important that US General Douglas MacArthur once called it an “unsinkable aircraft carrier”. The island state is not only the most important chip manufacturer in the world, but also the only democracy in the Chinese cultural area. Nevertheless, the question of whether the US government would send American troops to Taiwan is a politically sensitive one. Surveys investigating the willingness of Americans to support Taiwan with troops have recently shown strongly fluctuating results. While 52% of Americans answered this question in the affirmative in 2021, the figure was only 38% in 2023.
American military advisors have been urging the Taiwanese government to adopt the so-called porcupine strategy of asymmetric warfare for some time now. Instead of investing its budget in prestigious purchases such as F-16 fighter jets or the development of its own submarines, it should rather buy large quantities of light mobile weapon systems such as Javelin or HIMARS, which have already proven to be very useful in Ukraine. This is because, according to US experts, submarines and fighter jets could be quickly destroyed by targeted bomb attacks in the event of a Chinese invasion.
In reality, however, this is not so easy, says Lai I-Chung, President of the government-affiliated think tank Prospect Foundation, in an interview with Table.Briefings. “After all, we also have to be able to deal with the challenges of Chinese ‘Greyzone Warfare’ on a daily basis.” The Communist Party is trying to exhaust the Taiwanese with a hybrid threat of military threat gestures, cyberattacks, economic pressure and disinformation campaigns, with Chinese fighter jets entering Taiwan’s air defense zone daily – Taiwan needs fighter jets to drive them away, Lai says, and submarines to prevent Chinese warships from reaching the eastern side of the island. “Meanwhile, we are not only seeing many Chinese patrol boats in the Taiwan Strait, but also many warships in the Pacific”, says Lai. “The pressure is getting stronger and stronger. This is not just political posturing, but a real danger.”
For a long time, the Taiwanese were very relaxed about the possibility of a Chinese invasion. Military service had recently been shortened to four months, and many recruits described it as a kind of “summer camp”. Foreign visitors traveling to the country for the first time were surprised to note a lifestyle of almost Southeast Asian ease – despite a geopolitical conflict that had been fermenting for decades.
According to a survey published on Wednesday by the Institute for National Defense and Security Research (INDSR), the country’s main military think tank, a large proportion of Taiwanese believe a Chinese invasion in the next five years is unlikely. Around 74 percent of the 1,200 respondents believe that the US government would help Taiwan “indirectly” by providing food, medical supplies and weapons. But only 52 percent think that the US military would send its forces to intervene.
This belief is also reflected in military service, which has already been extended to one year under President Tsai Ing-wen. An overwhelming majority of Taiwanese are in favor of this. The Taiwanese defense budget is also set to increase by six percent next year, and the government wants to raise public awareness of the hybrid threat with a newly founded “Committee for the Resilience of Society as a Whole”. “Friends in the government told me that the president personally ordered that no one should talk about having nothing to fear before 2027”, says Lai I-Chung. “He fears that this could make people sluggish. We should also send a signal to foreign countries that we take our defense seriously.” The Taiwanese government also supported the production of a TV series called Zero Day, which is due to be broadcast next year. It shows the apocalyptic scenario of a Chinese attack. Hopefully it will remain fiction.
Under Viktor Orbán, Hungary has focused on becoming one of the largest battery and electric vehicle producers in the world. Chinese investment in particular is helping to build up the infrastructure. However, business is not going well at the moment because EV sales in Europe are not taking off. Industrial production in Hungary has fallen by around six percent this year, as Bloomberg calculates. In the long term, however, the calculation could work out, as Alexander Brown, Senior Analyst at the Mercator Institute for China Studies (Merics), also emphasizes.
And Chinese investors also seem to have identified future opportunities in Hungary, as the financial flows show. “According to Rhodium’s analysis, around three billion euros flowed into Hungary from China in 2023. The year before, it was €1.5 billion”, Brown calculates. It should be noted that Rhodium only includes money that has actually flowed from China in the calculation. Subsidies paid or sums announced are not included in the analysis.
And the proportion of investment in Europe that Hungary is able to secure for itself is also increasing. “It is remarkable how much of the Chinese investment in Europe plus the UK flows to Hungary. The share was 21 percent in 2022 and 40 percent in 2023 – that’s very impressive”, Brown continues. Even if the total amount of investment has fallen massively. In 2023, it was still €6.8 billion – the lowest it has been since 2010. The high point was 2016 with €47.5 billion.
One of the most impressive projects is CATL’s battery production. The company wants to invest a total of €7.5 billion, create 9,000 jobs and produce 100 gigawatt hours of battery capacity – enough for around 430,000 electric vehicles. However, it is unclear when these figures will be reached. Production is scheduled to start in 2025 and the first 3,000 people are to be employed by 2026. Provided everything goes according to plan.
However, battery production and exports are currently not running smoothly in Hungary. Both reached their temporary peak in 2023. In 2024, both are in sharp decline. This is mainly due to the fact that Hungary’s focus on the electric vehicle market has made it heavily dependent on its development. And sales are not picking up in Europe. The German manufacturers, who also all operate plants in Hungary, are in a severe crisis – especially in the electric vehicle sector.
Hungary may therefore have launched the offensive in this area a little too early. However, this does not mean that it is wrong. Even before the plans, the country was hugely important for car production. “The question is how big the market for electric vehicles will actually be and how fast it will grow in Europe”, says Brown. There are a lot of uncertainties at the moment. But there will definitely be a steadily growing demand. “Europe will probably only have two or three major centers for the production of EVs”, Brown believes. And Hungary is likely to be one of them.
“I think it’s important to mention first of all that investment in Hungary makes perfect sense from an economic point of view. I don’t see it as a purely politically motivated move”, says Brown, assessing the increasingly close relations between Hungary and China. Around 700 different suppliers and various original equipment manufacturers produce in the country. Hungary was already a hub for the automotive industry before the increased interest from China.
However, it is also clear that Viktor Orbán is one of Xi Jinping’s closest allies. This also became clear during his most recent visit to Europe. The Chinese head of state visited France, Serbia and Hungary. The tone of the talks in Paris was much more critical and confrontational than in well-disposed Hungary. “This relationship works both ways. Orbán’s government has been very active in trying to build a friendlier relationship with Asian countries and has undoubtedly been successful in establishing some economic cooperation with China. And Beijing is making friends within the EU who are somewhat more sympathetic to Chinese policy“, Brown analyzes.
However, when it comes to tariffs, we have seen that individual issues are being discussed in a much more pragmatic way. Both Germany’s Chancellor Olaf Scholz and Spain’s Prime Minister Pedro Sánchez have positioned themselves against the introduction of tariffs. According to Brown, tariffs on electric vehicles could once again bring a new dynamic to investment flows. “I have the impression that tariffs would lead to more investment. If you introduce tariffs, it’s cheaper for companies to produce locally than to export to the market.” In addition, there is enormous growth potential in the European electric car market – precisely because it has not yet taken off to the same extent as the Chinese market – which would make it one of the most important in the world.
However, Hungary is also reaching its limits in terms of growth. Despite a weak economy due to low export figures, the unemployment rate is just 4.4 percent. Labor is therefore in short supply. Many Chinese companies therefore prefer to bring the skilled workers they need with them. Hungarians, who also pay the subsidies and tax breaks for the relocations with their taxes, are therefore not benefiting to the extent that Orbán likes to be celebrated for.
The EU Commission is preparing a strategic dialog on the future of the automotive industry. The aim is to identify ways in which the automotive industry can emerge from the crisis and solve Europe’s problems within a few months.
A high-ranking panel of experts is to deal comprehensively with key issues: Will the fines for manufacturers for failing to meet the 2025 climate targets remain in place? Should the CO2 fleet limits be adjusted in 2030 and 2035? Should the 2035 phase-out of combustion engines for cars and light commercial vehicles be maintained? The development of the charging infrastructure and the use of data generated during driving could also become an issue.
The strategic dialogue on the future of the automotive industry is to be organized along the lines of the strategic dialogue on agriculture. Under the leadership of Peter Strohschneider, experts, industry representatives and NGOs developed a vision for the industry within seven months. Commission President Ursula von der Leyen had signaled that she would implement the recommendations. According to reports, the commission is still looking for a person who can moderate the dialog with the automotive industry.
Von der Leyen has met the CEOs of the German car manufacturers in Strasbourg over the past few days: Oliver Blume from VW, Ola Källenius from Mercedes and Oliver Zipse from BMW. There had been no such meetings during her first term of office.
The CEOs are still trying to achieve changes to the countervailing duties on electric vehicles produced in China, which are due to take effect at the end of October. When it comes to CO2 regulation, the interests of the company bosses are diverging: While VW is calling for the suspension of penalties under the CO2 fleet legislation, BMW CEO Oliver Zipse is arguing against this. BMW has invested a lot to meet the targets. VW will foreseeably miss the targets and must expect fines in the billions. Zipse demands openness to technology for the 2030 and 2035 targets. Blume is in favor of sticking with the phase-out of the combustion engine.
In Berlin, VW has already submitted customized proposals to solve its own sales problems with EVs: VW is calling for an EV premium of €4000 up to a purchase price of €65,000, a premium of €2500 for used EVs and a reduced VAT rate on EVs for two years. Competitors are disconcerted and the lobbying battle is in full swing. mgr
Jozef Síkela (57), currently Czech Minister for Industry and Trade, had been considered for all possible portfolios in the new EU Commission: migration, energy, and most recently trade. Czech Prime Minister Petr Fiala had expressed his desire for a “strong economic portfolio” for his country. He was counting on Brussels to remember how skillfully Síkela had brought the member states onto a common course against Putin’s gas war during the Czech EU Council Presidency in the second half of 2022.
It did not help. The opposition in Prague and the country’s media were disappointed that the country had been “fobbed off” with a “rather uninfluential, vague portfolio” such as that of the Commissioner for International Partnerships. The magazine Reflex wrote: “We have once again lost the battle for a really strong economic portfolio. This has been happening for 20 years, ever since we joined the EU. It has once again shown that our influence within the EU is limited.”
Prime Minister Fiala, who is primarily blamed for this, talked up Síkela’s future role: “He will manage the largest budget ever managed by a Czech commissioner, he will decide on investments in the Global Gateway program of up to €300 billion”, he wrote on X. However, the €300 billion is a highly dubious sum, as it comprises the entire investment volume that the program is supposed to “mobilize”, including capital from private individuals and national development banks.
Jozef Síkela himself said that the portfolio of Commissioner for International Partnerships “will give me the opportunity to focus on strengthening economic security, diversifying our suppliers of critical raw materials and opening up new markets for European companies”. Essentially, he will have to ensure that Beijing’s Belt and Road Initiative (BRI) in particular faces real competition from the EU. So far, the infrastructure initiative from Brussels still lacks momentum.
Síkela recently emphasized at a conference in Prague that Europe must reduce its dependence on raw materials such as gas, oil, nuclear fuel, lithium, and cutting-edge technologies such as chips. “Deepening cooperation with trustworthy countries through trade agreements will help us achieve this.”
In order to reduce this dependency – mostly on China – von der Leyen wants to focus on “Clean Trade and Investment Partnerships”, which Síkela is to implement together with the designated Trade Commissioner Maroš Šefčovič. Given the more difficult environment for new trade agreements, the Commission wants to focus more on targeted partnerships.
Market opening through such partnerships should be limited to just a few sectors, but should be accompanied by European investment in partner countries. In this way, partner countries rich in raw materials should be able to keep a larger share of the value added in their own country and the EU should be able to reduce its dependency on China at the same time. Because of the EU’s great dependence on many raw materials, the need for investment is likely to be very high.
Assuming that the EU also supports its resilience goals with the necessary funds, Síkela’s dossier is likely to gain in importance. He will also benefit from his experience in the financial sector.
He worked for several years at Österreichische Creditanstalt, Bank Austria and Erste Bank. After the successful consolidation of Erste Bank in Ukraine, he led the Slovak Savings Bank to the top as CEO, achieved record results with it and was honored as Banker of the Year. Síkela, who speaks German, English and Russian, later became a member of the Management Board of Erste Group Bank AG.
Whether Jozef Síkela can also turn the Global Gateway project into a kind of European economic development bank will depend on how much funds the governments of the member states will entrust to it. Hans-Jörg Schmidt
Mushroom picking is a trend of the season among young Chinese people. On social media channels such as Xiaohongshu, they showcase their finds and often post where they found them. Yunnan, Sichuan and Zhejiang are particularly popular provinces for mushroom poses, as they have the best climate for their growth. In Yunnan alone, there are 900 varieties of mushrooms, 36 percent of which are edible. This is not the only place where mushroom glamping tours are now offered, where you can spend the night in idyllic scenery and prepare the mushrooms you pick under supervision on site.
