June 27th, 2011

Hungarian PM lauds relations with China after meeting with counterpart in Budapest

China will buy “a certain sum” of Hungarian government bonds and extend a one billion-euro credit line to Hungary, Chinese premier Wen Jiabao said in Budapest on Saturday at a joint news conference with his Hungarian counterpart Viktor Orban, who said Hungary had now entered into a new and major alliance with China.

Wen Jiabao said the credit line aimed at boosting bilateral trade to 20 billion dollars by 2015.

Orban noted that two countries had signed twelve agreements on substantive programmes, investments and financial frameworks.

“I regard today as an exceptionally important milestone and success in terms of Hungary’s renewal,” Orban said after holding talks for over an hour with Wen. 

The Chinese premier said that his country believed in the development potential of Hungary. 

China, he said, was ready to purchase “a certain sum” of Hungarian government bonds, and the Chinese state development bank will extend a one-billion-euro credit line to Hungary for the purpose of advancing mutual investments, he said.

Orban said that for Hungary’s current transformation to be successful a complete economic turnaround should take place, and for this to happen a new type of alliance and alliances are needed.

“Today we concluded negotiations so that China and Hungary should have such a new alliance with one another,” Orban said. 

He said the two countries thought about the future in similar ways, and Hungary is determined and committed to putting the economy on the foundations of labour and value-creating work, adding both believed that it was impossible to thrive without employment.

“This conviction is the basis for our future cooperation,” the Hungarian premier added. 

Asked by a journalist about whether ideological issues had been discussed, Orban said “we understand one another: we respect one another’s politics and this is a principle underpinning our cooperation.”  

Hungarian and Chinese companies in the chemical industry have struck agreements on investments worth one billion dollars, and Chinese has indicated its desire to create its central and eastern European logistical hub in Hungary, he said. China has agreed to underwrite a doubling of bilateral trade, he added.  

“We are getting historic aid from China,” Orban said, adding that Hungary regarded China’s willingness to by Hungarian government bonds as important.

He said Hungary was capable of financing itself from the financial markets but “for my own part I see that this rids us of medium-term uncertainties in respect of the country’s finances.”

Orban said: “We wish China to continue the policies which have produced fantastic achievements over the past decade [...] we raise our hats to this fantastic success, which has succeeded in giving a better life to one hundred million people and giving hope to others about the future.”

The prime minister said he had asked Wen Jiabao to pay a visit next year, and that the Chinese premier had accepted the invitation.

Wen told the international news conference that the development of Chinese-Hungarian relations were based on very solid foundations. In the past 24 years, ever since that last Chinese head of government paid a visit to Budapest, the world and Hungary had undergone big changes, but the friendship between the two countries had remained “unbroken”.

He said his the first stop on his current visit to Europe had been Hungary because he saw the two countries’ friendly cooperation and partnership as important. The advance of bilateral cultural relations would be advance by the visit of 150 young Hungarians to China, he announced.

Around one hundred Chinese businessmen are accompanying Wen on his five-day European visit embracing Great Britain and Germany as well as Hungary, people close to the Chinese delegation told MTI.

The Chinese premier will take part in a central and eastern European economic forum at the Hungarian Academy of Sciences in the afternoon, before being received by President Pal Schmitt and Speaker of Parliament Laszlo Kover.

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  • Viking

    First we take Manhattan, then we take Budaest

  • mc

    Sure this is good news, and yes Mr Orban will be strutting around with a smug look on his face. However Mr Jiabao is now in London and he is doing more or less the same thing: buying debt. China doesn’t really have much choice as it primarily a mercantile society and needs the markets to sell its products.

  • Andy

    So mr.Orban sold Hungary to China. Nice. Hopefully, China will not come with some kind of double citizenship – I mean: I own you, so you have to be Chinese :)

  • Farkas László

    Orbán, lacking his own jobs program, must view the visiting Chinese premier’s visit with jubilation. Here is a guy who knows about creating jobs, and has the werewithal to create quite a few in Hungary. The Chinese have chosen Hungary to be their regional hub- and that has HUGE commercial repurcussions.

    I think the Chinese are very serious about Hungary’s commercial future. They will step in and create jobs and value, where it may not have existed before.

    • spectator

      I hope, we’re gonna get the blueprints of the Great Wall too, or at least the know-how…
      Mr. Orban has promised “one million new jobs”, remember!

      I think, he already got Imhotep’s architectural plans too, – when in Egypt, now only waiting for Albert Speer’s, and the happy nation can build just about anything, the Supreme Leader dreams about.

      A Giant Leap just around the corner!
      Good work, Mr.Orban, congratulations!

    • TiborB

      “The Chinese have chosen Hungary to be their regional hub” …. it is optimistic point of view. From my perspective, hungary was cheapest country in region to buy. One milliard of dollars was the price or something like this…

      Chinese investments are fine, as any other investment, but were all that political dances of Mr. Orban necessary?
      Why he can’t see that Hungary was included in the group of countries like Greece, Portuguese that are willing to bend their backs (and do more) to get some money from a country like china?

  • Farkas László

    Hi Spectator,

    Imagine the position of the PM, he won’t get much jobs growth without the Chinese! He is dependent on his friends in Peking for his political survival.

    • spectator

      Hi FL!
      You know, I’ve learned in my early childhood, that never promise something what I can’t, won’t, etc. keep, because it’s a dishonorable act.

      When Mr.Orban started to make his boasting announcement – quoted above – everyone, inclusive himself, must have been aware, that it will never happen, not in his lifetime anyway, but he repeated it over and over again, – the deadline “slightly” changed, mind you, but nevertheless, he consciously and intentionally mislead a few million people in one shot.

      It’s also true, that I’m not related to Mr.Orban, so, our family-traditions certainly different, thank you..!

      His only chance for political survival is to implement the political methods of Peking as well – or I would say – completing the implementation in time, in order to control the “happy” masses at his will.

  • Farkas László

    The Chinese have that most precious commodity- surplus capital. It came from trade surpluses. At a time when the governments of other major nations are having debt or currency issues- they have the opposite problem. Too much money!

    When they propose a project to Hungary’s leaders- everybody at the table knows that of all things, financing won’t be an issue. That gives them a lot of credibility, leverage and clout.

    “Hungary for the Hungarians” will happen the nation has surplus capital. Without experience and knowledge gained from working with the Chinese, the development of the country may stagnate for decades.

  • Georgie

    Chinese investment and industrial development are vital to Hungary because the useless politicians of Fidesz and MSZP
    are amateur bunglers that tax everything and create nothing.
    That is, if you exclude, economic chaos!

  • Curious George

    The Chinese will look after their own interests in any business deal. Hungarians should do the same. I know many from my own country who lost out a lot when dealing with the Chinese. The resources they provided were more for their benefit than for any common benefit. We are more careful now, and we are better for it.
    While the Chinese may come with money, it is still up to Hungary to see what and where their own developmental goals are. The financial instruments they buy aren’t going to create value-added Hungarian jobs. These jobs will only be created if Hungary understands and plans for the future state of the Chinese business. It appears that the Chinese are looking for a logistics/distribution beachhead into Europe. Hungary does serve as a very good and cost effective land and airbridge to various parts of central & eastern Europe. To fully utilise this, it is important to understand and develop the operational skills needed to make this beneficial for Hungarians. Hungary can learn how places like Rotterdam, Ireland, Hong Kong, Miami, Dubai organized themselves and their bureaucracy/education sector to facilitate the development of their distribution sectors. Drop-shipping airports (for cargo) & airhubs can bring a lot of money, but only if the ancillary services (logistics/IT/construction/transportation) around them are developed.
    The responsibility to develop the Hungarian economy still lies with Hungarians.

    • Viking

      It appears that the Chinese are looking for a logistics/distribution beachhead into Europe

      Yes, Fides/”Jobbik” criticised the previous MSZP-led Governments heavily for making Hungary into a “transit-country” for foreign goods, then that was not the correct way forward to build a prosperous Hungary:
      .
      ‘“I regard today as an exceptionally important milestone and success in terms of Hungary’s renewal,” Orban said’
      .
      Think what getting the powers to sign deals can make to your earlier criticism…

      This development with China as an important partner has been in the wings for many years. The timing is more out of the hands of the Hungarian Government, then China has made similar agreements with both France and the UK
      As I understand it, the earlier agreement with France is the biggest one so far:

      http://www.bbc.co.uk/news/world-europe-11694214
      -

  • Paul

    Meanwhile…

    “Wen Jiabao, China’s premier, has sharply rebuked the UK government of David Cameron over its criticisms of China’s lack of human rights, warning that the London should stop its “finger-pointing” at Beijing. Amid growing signs of anger in the Chinese leadership at the emphasis Mr Cameron has been putting on the need for greater political freedoms in China, Mr Wen indicated that the UK should cease ”lecturing” Beijng over the issue.” – FT (£)

    I am guessing that The Dear Leader didn’t broach the subject of human rights with the Chinese…probably too busy taking tips from them re media “independence” etc

  • wolfi

    David Cameron surely is a liberal postcommie – how can he dare criticize the great leader!

  • Thehat

    How is selling to the Chinese (who will eventually have a say in our countries direction) any different than the IMF, EU, or any other institution. We are deluding ourselves if we believe that this will ensure our right for self-governance. My bet 10 years from now Hungary will be owned by China (aka colony).

  • Farkas László

    Hello Thehat,

    I always say that the independence and freedom that Hungarian nationalists dream of ended once and for all in 1526. The last 500 years has been domination by outside powers, and nothing can change that given the smallness of the country and it’s economy.

    So long as Hungarians are weak in commerce and wealth creation, foreigners will continue to be the ones providing major investment and job creation. Hungarians are such a long way off from being able to reclaim their country economically- as that takes money and business savvy they don’t seem to have.

    Like them or not, the Chinese are the only game in town now, as they are the only ones with the means to launch major new ventures. Maybe Hungarians could learn a thing or two from them about exporting and business.

  • Thehat

    FL – I think if we can make ourselves a center for Chinese investments the economy will start growing at a very high pace and jobs will be created. So I like it – it also means that far right forces become weaker as people have more to lose with extremism, so bottom line this is good for the long-run.

    The problem is that the VO is so full of BS and no one sees that he is as big if not bigger liar than Gyurcsany was. He was the one that said we regained our independence yet I see him doing the absolute opposite and no one seems to be seeing that. That being said the things that he is doing (which are opposite to his rhetoric) are not always bad for the country (E.g. trying to get China to use us as a center for investment) or making it easier for entrepreneurs with the means to invest in the country by offering favorable tax treatment to the wealthy. Bottom line he is two faced and no one seems to be catching on.

    Ironically he has been good for me although I should have been the one that benefited the least from him coming to power.

    On the other hand he is centralizing power and have a bigger say in people’s lives as such I like to call him the world’s first right wing communist. :)

    I guess this is what makes Hungarian politics so weird.

  • Viking

    Hungary got a credit-line (conditions not known and they may change) up to a Billion Euro
    The UK got £1.4bn of trade deals
    France got 10bn euros (£8.6bn; $14bn) on 102 Airbus planes, as well as telecoms and nuclear deals in November 2010
    And Germany rounded off today with more than $15 billion in business deals
    .
    Getting that “the Chinese state development bank will extend a one-billion-euro credit line to Hungary for the purpose of advancing mutual investments” must beat that

  • Farkas László

    Hello Thehat,

    It would be smart for the Hungarians to learn everything they can from the Chinese- hence I see their involvement in Hungary as a chance to learn. For some Hungarians, it’ll mean a job and a welcome paycheck, but for those who like to think and act in bigger picture terms- there will be much to see and learn.

    When Orbán made his million jobs rhetorical flourish, it just shows you how outclassed he stands to be by these Asian potentates. For Peking, creating a million jobs isn’t about talk, but standard operating proceedure.

  • Farkas László

    Hi Viking,

    To me the comparison between Brussels nations and Peking is one of sheer solvency. The former are facing a debt and currency crisis, if not a meltdown, while the latter is in a position to make whatever investments it wants, wherever. If Hungary \suits\ them, then they will plow in more.

  • wolfi

    FL, the situation might be more complicated. If The EU and/or the USA go bankrupt, they won’t buy all those Chinese products anymore …

    And if the $ or the € are worthless, all the mpney the Chinese are hording is worthless also.

    My nehew just wrote his master’s thesis on some aspects of the Chinese banink system, I helped him as a proof reader – very interesting stuff, like how the exchange rate has been managed by the Chinese National Bank …

  • Farkas László

    Hi wolfi,

    They think of everything when it comes to government intervention in favor of trade- including the exchange rate!

    If and when the dollar or euro will decline in value, that only empowers a cash rich China all the more. Instead of selling us widgets and goods, they will be buying assets in target countries at depression level prices- setting themselves up pretty for the next wave of recovery. They got rich exporting goods, so much so that they can now branch out into global asset acquisition, and get rich even more.

    The important story is taking place on the streets of Athens. The people are resistant to the proposed austerity plan. If they continue this resistance and the government backs down, they will default on their debt (or need another bailout). A Greek default would have a ruinous ripple effect on the euro currency and bond market. Ultimately, I see no other way out than for the Greeks to be kicked out of the EU and for their currency to devalue to it’s natural level.

    The worse part of the crisis is that it is a potentially generic problem that may play out in other countries. Any where they ask ordinary people to cut their already declining standard of living even further, in order to make up for past government mismanagment of taxes and spending, is a potential powerkeg. We’ve hardly even seen the beginning of the crisis so far.

  • Curious George

    @Thehat “I think if we can make ourselves a center for Chinese investments the economy will start growing at a very high pace and jobs will be created.”
    Don’t be deluded that Hungary will be the center for Chinese investments in Europe. The Chinese still need to create millions of jobs every year to cater to their urban migrants, so they aren’t going to be exporting high value added jobs out of the country. Viking’s post on the trade deals shows clearly where the Chinese put their priorities. There are multiple countries which they have an interest in. In my opinion, their medium term economic aims in Europe are to
    a. acquire technology/know-how upgrades for Chinese companies (Germany)
    b. understand/acquire financial & organizational know-how to allow them to leverage their economic capabilities (UK/Germany/France)
    c. acquire physical assets which are cheap (or gain political influence/support by buying distressed financial assets)
    d. develop a logistics base to distribute their products in Europe (including products from their European assets acquired in c)

    Hungary offers d (maybe a little bit of c) Rather than creating new businesses, they are looking at buying high value on-going assets which are going cheap or enable them to upgrade their existing technology or markets eg Volvo, Borsodchem, Port Piraeus etc & Italy, Greece, Spain now offer more prospects than Hungary. The one business I possibly see is in construction, where their presence in Europe (maybe with a partnership) allows them to participate in EU projects & funds.
    Hungary should plan for its own long-term economic goals as they tried to do with the automotive sector. There are some sectors which could be in Hungary’s interests, but only if Hungary is able to leverage and provide the high value-added activities that the Chinese need. Another point to remember is that, in order to be an effective center or hub for China, it is in Hungary’s interests to also have good relations with its neighbors.

    • Viking

      in order to be an effective center or hub for China, it is in Hungary’s interests to also have good relations with its neighbors

      Maybe The Supreme Leader is pinning His hopes that the Chinese will ‘force’ Europe to reverse Trianon, as China is today using arguments of the Han-dynasty 100 AD rule over the South China See against Vietnam, Philippines, Taiwan, Brunei and Malaysia and using brute force to make a point of these arguments, by attacking fishing vessels from other countries on a regular basis
      China is not known to have a tradition of being a good neighbour friend, maybe it is that part that inspires The Supreme Leader?
      Not sure the Chinese would like to become involved in this though, except selling military HW/knowledge and weapons

  • Farkas László

    The Chinese are involved everywhere and in most countries, even Africa, as the scope of their business operations and their ambitions is so global.

    A nation like Hungary will get no more, nor less Chinese investment than what their calculations allow for. They always have a compelling reason for investing money somewhere, as opposed to another place. To build a plant in Hungary vs building it in China, has to justified on very practical grounds, like wanting to source production within the EU, or getting around non- EU import restrictions.

    Other reasons they may buy up an asset within a certain country could be that they see it as a good buy and long term investment. They no longer view mercantilist style exporting as their only path to further wealth. The Japanese reached this more mature phase of mercantilism in the 80’s, when they took their export derived riches and started buying up high profile buildings and assets throughout the world. That’s where the Chinese are now. Their big problem, I repeat, is finding places to park and invest their massive loot.

    • Curious George

      The Chinese are not in the same position as the Japanese in the 80s. At the time, the Japanese were leaders in technology, production know-how, quality, and had probably the highest reserves in the world. They invested in production facilities in other countries because they had the know-how to produce high value goods to circumvent real & potential barriers. When the US was encouraging Americans to buy “Made in the USA”, Honda was selling themselves as an American car, built in America, for Americans, by Americans. Their conspicuous asset buying was only because they had too much money, and did not know where to spend it since they did not have to buy western technology, and their quality was their brand.
      China does not have the technological capability, quality or branding of the Japanese. The Chinese competitive advantage is in low labor cost – they do not have technology to build and operate high-end facilities in Europe. They have to buy existing production facilities which are still profitable. Their money will be used to buy profitable businesses which will give them either higher technology & R&D capability for their manufacturing sector, or from providing services abroad to increase their remitted income and hence GNP. Their desire for developing a distribution network in Europe is not simply to sell their goods, but to also get European companies to use the infrastructure (airports, transportation systems, warehousing, freight agencies) within Europe, and between Europe & Asia. In this regard, the Chinese are acting exactly like Dubai, Abu Dhabi, Kuwait, Qatar, or Saudi Arabia, where the national funds are invested overseas to buy ports, highways, telecom providers, etc to keep producing wealth for those countries.
      China will continue to use its home base to be the world’s factory to manufacture labor intensive goods. They don’t have a Honda, Toyota, Sony, Panasonic or Canon. They already know where & how they need to park their money overseas for multiple income streams to enhance their wealth.

  • Savage

    Something for nothing? Never! The Chinese have the financial clout and strategy to dominate the world market for a long time to come. The only fly in the ointment is that old enemy “inflation”!
    Can the mandarins keep it under control within the Great Wall of China?
    Greece is “doomed” and it would be better to let it default now, rather than later. A BBC correspondent said today,”Greece” is receiving billions of euros in loans that it will never, ever, be able to pay back.”
    China offers some sort of lifeline and Hungary better grab it with both hands.

  • Farkas László

    Hi Savage,

    There is no other “game in town” when it comes to large scale job creation in Hungary, except to hear out what the Chinese have to say. Of course, they will try and cut the best deal for themselves, which may have to include a promise of “hands off” and non-interference from the lower officialdom. Peking would never tolerate the BS that a asmaller Hungarian firm has to put up with.

    What I want Hungarians to learn from working with the Chinese is how to tap and reach a global market. They are the absolute masters of that, and acquiring such knowledge and experience would be invaluable.

  • Farkas László

    Hi George,

    To me the big difference between Japanese and Chinese mercantilist models is developmental age; the Japanese got into their trade capital surplus stage much sooner than the Chinese. The Japanese had a historic start here, as their major name brand companies, with the exception of Honda, were established conglomerates before even WW2. (We all know what Mitsubishi made during WW2!) Even the Japanese got their start making cheap low quality goods- initially their big advantage was cheap labor as well. The Japanese jumped into mass exporting soon after WW2; the Chinese had Mao and Maoism holding them back from this for years, until the 1970’s. The Japanese had a good 30 year head start over the Chinese in the world export markets

    Both countries have financed their technological development through export trade; both started with cheap goods, and moved up from there. Rome is never built in a day, and nobody seems to know it like the Asians, who think and plan in terms of decades.

  • Robbie

    Hungarians have no domestic experience in marketing, let alone on a global basis and, this is why so many businesses fail.
    The international standard, Birdland golf course, with something like 150 apartments has financial problems and is now up for sale. NO Marketing. NO customers. Need I say more…??

  • Curious George

    @FL – I agree that the export orientation of the Japanese and Chinese contributed to their surplus, and that the Japanese produced low quality goods initially in the 50s and early 60s’. Where I disagree is in the Chinese competitiveness once they are in a moneyed position to expand their international presence. I’m not even sure Chinese companies have the competitiveness or the technological edge that the Koreans had when they did the same in the 90s (Ok, the Koreans funded a lot of that expansion from cheap funds from overseas, unlike the Chinese and we know what happened to the Koreans in 97/98). However, despite the money, the ability of the Chinese to create new higher value added industry in oversea markets is relatively limited. They would hence be in the acquiring mode rather than the creating mode in Europe. Realistically, beyond Borshodchem and maybe 1 or 2 other companies, there aren’t many useful acquisitions for them in Hungary.
    Hence, my point is that Hungarians should take charge and plan for their own economic future. Like you said, the Asians think and plan long-term. Maybe Hungary should recognize & understand the Chinese real ambitions in Europe, and start gearing themselves up to be a useful future partner, instead of hoping for a Chinese ‘handout’.

  • http://www.allhungary.hu Erik D’Amato

    @László: Some Asian countries like Japan and Korea “think and plan in terms of decades” because they have cohesive societies that allow for such planning, and cultures that encourage individuals to defer gratification. Just consider why, for example, China is in a position to offer to buy Hungarian bonds: because it forces local companies (and thus individuals) to hand over their hard-currency earnings to the state. I just don’t think Hungary has this kind of culture.

  • Farkas László

    Hi Robie,

    That’s why Hungary needs a mentor as well as perhaps another 20 years if it wants to see business progress. Some of the problem is the legacy of a command economy. A factory manager only had to make sure the goods were made, the state then took over their sale and distribution. The other issue is the lack of business development experience among the people; you will have to train and educate a new generation.

  • Farkas László

    Hello George,

    I don’t really know what was on the Chinese Premier’s mind (the closed door discussions would have been interesting to overhear); I assume he had some investment projects to propose to Orbán. I would also assume the Chinese have surveyed the country, profiled it and made a list of projects that must include a combination of start-ups as well as acquisitions. I also assume they have done their cost benefit analyses and feel like they want to take the risk.

    It’s true that success as a sweatshop mercantilist does not gaurantee project or investment successes elsewhere! They will win some and lose some, but given the size of their available funds and the diversification that enables, they are likely to be net winners.

    About “handouts”, lord anybody who thinks the Chinese will conduct a local charity under the guise of a business is sadly mistaken. It’s not their style, and they love and value money too much.

    I agree that Hungarians should take charge of their economic future. Part of doing that is learning from foreign companies, studying their “modus operandi”, learning about how they develop markets and customers, all of which our people will have to get up to speed with, if they are serious about “taking charge of their economic future”!

  • Farkas László

    Hi Erik,

    That very thought also went through my mind as I was writing that. I thought, it’s not just Hungary, but no western people or culture is anything like the asian ones. Not every asian country is a potential “tiger” though, I noticed that societies that were influneced by Confucian culture became the “tigers”. (The Phillipines, which was influenced by Catholicism and Spanish colonialism is an example; nobody expects it to become a major exporting “power”.)

    Confucianism emphasised shared and interrelated societal responsibility and consensus. That may sound like an arid summary, but when you see the practical results when visiting these nations, it really hit me! No, we can’t “be like them”; at best, we could learn some practical aspects of business and investment.

  • Cherryripe

    Chinese and Hungarian cultural differences? Both Communist-influenced and have needed to adapt to the capitalist, free market, to sell their goods and services.
    Hungary’s antiquated bureaucracy, massive corruption, and inept governments have made sure that the huge sums of money
    invested by the IMF, World Bank, and EU, has ended up down the plughole or, in some foreign, offshore, bank accounts, (allegedly).
    Conversely, the Chinese have succeeded beyond their wildest dreams, with huge stakes in both the United States, and Europe.

  • Farkas László

    Hello Cherrypipe,

    It’s interesting to note that both countries share a communist legacy. The Soviet Union and it’s satellites made a more abrupt break with their political past by changing to a multi-party, electoral system. The Chinese and the Vietnamese have created a true “third way” for themselves, one that combines and retains a one party state, some state ownership of factories, and a lot of state-subsidised private enterprise. Neither Reagan NOR Mao would have approved of such a scheme- therein lies perhaps it’s beauty and usefulness, as such an arrangement would never have been dreamed up by an ideologue. It was pure pragmatism.

    After 1989, the ex-communist states of Europe bought into the neo-liberal (this is an economic, not a political label) economic policies suggested to them by western governments and advisors. The Chinese and their asian tiger collegues were having none of it. They didn’t believe in opening up their domestic markets to importation, to foreign competition and most of all-foreign acquisition. While closing off their domestic markets as much as they could, they focused on exports and opening up foreign markets. They believe in a “one way”, not “two way” model of “free trade”! Actually, their concept of trade is really a form of economic imperialism.

  • Vonat

    “Economic imperialism,” “mercantilism,” “currency manipulation,” and buying up all the American, and European, bad debt is China’s marketing strategy for world domination in trade and commerce.
    The one factor that will haunt the Chinese in years to come is “inflation” and it is a bit worrying as to how they will deal with old enemy, because it will certainly have a “ripple effect” on the rest of us!
    The one thing I find interesting is the intended development
    of the railway system in this country with the Chinese “wonga/yuan”. A good railway/transport system in Hungary would springboard it into the 21st century opening up a lot of opportunities for its economic growth.

  • Farkas László

    Kedves Vonat!

    Welcome if you are a new person around here. We seem to have gotten a few new people lately.

    When you mention inflation and the Chinese, their situation has some interesting twists. One of the advantages of a one party, authoritarian govt. is that it can impose and enforce draconian wage and price controls to a degree that would be difficult in a democracy. Dissenting voices can also be “dealt with”. Sometimes inflation happens with them when their govt has to devalue the “yuan” (after being pressured to do so by their trading partners) or when the global price of raw materials like oil goes up. Their manufacturing colossus needs cheap raw materials, which explains why they are so active in Africa. Their large and constantly growing population drives up the prices of food and food imports as well.

    I like what I have seen with infrastructure projects like speed trains and such when I was in Japan. One definitely gets the sense of long term planning in these countries by a forward looking and methodical ruling class.

  • Mentor

    Hungary and its businesses and proprietors need to understand:
    Marketing is a necessary evil in order for any business to succeed. Ignore it and you are doomed to fail at some stage of the commercial venture.
    The list below itemizes the basic functions that any enterprise must consider and undertake before entering the world of trade and commerce.
    a Business plan
    b) Marketing Plan
    c) Cashflow forecast
    d) Budgets
    e) Advertising/promotion/targeted audience/customers.

    The overall strategy of the business will be determined by the detailed analysis of all of the above mentioned.
    “Anticipation is better than realization” and, it will save you a great deal of money in the long term.

  • Ex-Golfer Johnny Ten Putts

    The first lesson anyone learns in marketing is understanding your customer’s needs and producing something that he/she wants, and not trying to persuade them to buy something they don’t need.
    The Birdland golf course & its associated apartments sounds like the operators didn’t understand what Hungarians want. The comments on their homepage state that the course is very good, but almost every comment talks about poor management, bad clubhouse, no drinks, or some other missing basic amenity. One could be forgiven for thinking the owners were in it to make a quick buck by building & selling many apartments, and never had any intention of profitably running a world class course.

  • Golfballs

    Birdland golf course was the first of its type in Hungary.
    Management and marketing skills both lacking and the place was doomed from the start.
    We (me and partners in UK) did a marketing plan for another golf course near Balatonfured which was very detailed and thorough, and involved a lot of our time and money. The result? We did not get paid for our efforts and the plans are probably gathering dust in the bottom drawer of the chief executive.
    This little episode did not enhance the reputation of Hungary and its business methods (or lack of)and I am still fuming about the whole affair.

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