Hungary and China are at the forefront of knowledge economy cooperation. Governor of the Central Bank of Hungary: relying on the knowledge of the "the Belt and Road" | cooperation | President

Introduction

The COVID-19 and the Russia-Ukraine conflict have added variables to the world situation, but the future of Eurasian cooperation should not be hindered by them. Eurasian countries should mobilize their respective advantageous resources for mutual benefit and win-win outcomes. Relying on the "the Belt and Road" initiative, Hungary and China continued to promote cooperation and achieved outstanding results in the logistics and new energy vehicle industry. This type of investment promotes knowledge sharing and innovation, and will continue to expand to emerging industries and fields. Through university cooperation and exchanges, international dialogue will be continuously strengthened, knowledge networks will be built, long-term sustainable economic growth will be promoted, and new models of digital and green development will be constructed.

Author: Gerji Matochi

Governor of the Central Bank of Hungary

Former Minister of Economy of Hungary

After several waves of COVID-19, the outbreak of the Russia-Ukraine conflict has added a new special situation to the world, leading to serious turbulence in the global energy and food markets, which has further exacerbated the rebound in inflation. Prices in many parts of the world are growing at double-digit rates. Many analysts believe that this situation has cast a shadow over future Eurasian cooperation. But I believe that such views do not recognize the real opportunities brought by jointly addressing these challenges. The prosperity of humanity depends on the partnership between the East and the West, especially on the Eurasian continent. If long-term sustainable economic growth and a new model of digital and green development can be achieved, Eurasian cooperation will be successful.

In Hungary, many people, including myself, believe that Eurasian countries should mobilize their respective advantageous resources, engage in dialogue, and work together to seize the current trends of digitization, long-term sustainable development, geopolitical changes, and currency transformation. In the past decade, Hungary has been searching for partners with Asia, especially in the most promising areas of cooperation with China. At least two of these areas are eye-catching: logistics and the new energy vehicle industry.

Logistics has always played a crucial role in Hungary. Hungary is a hub connecting Central and Eastern Europe, located at the crossroads of several important international trade, tourism and energy corridors, and one of the first European countries to join the "the Belt and Road" initiative in 2015. As the most important flagship project of the initiative in Hungary to date, the ongoing construction of the Hungary Serbia Railway is part of the land corridor connecting the port of Piraeus in Greece. After the completion of the railway, the travel time between the capitals of Hungary and Serbia will be reduced by more than half, from about 8 hours to 3.5 hours.

However, not only goods and services are transported along the different corridors of the "the Belt and Road", but knowledge sharing is becoming more and more important, and it has indeed opened up new dimensions in various fields where innovative ideas are rapidly emerging. In Hungary, the new energy vehicle industry is a typical example. Hungary's goal is to stay at the forefront of the global new energy vehicle supply chain, and cooperation with China is helping Hungary achieve this goal.

Currently, well-known Chinese electric vehicle manufacturers and battery suppliers are building factories in Hungary. In August 2022, CATL announced an investment of 7 billion euros to build a factory in the second largest city in eastern Hungary, Debrecen, which will create 9000 new jobs in battery production and set a new record for foreign direct investment in Hungary. The factory is expected to be operational as early as 2025, providing batteries for world-class car manufacturers such as BMW and Mercedes.

Last July, NIO Motor Company officially confirmed to invest 13.4 million euros to build a factory near Budapest, Hungary, to produce NIO car swapping stations. NIO has been selling in the European market since 2021, with the Hungarian factory being its first overseas factory and also becoming its power research and development center. The Hungarian government allocated approximately 4.16 million euros to support the project. Therefore, Hungary will become a key node in NIO's international battery swapping station network, especially in Europe.

The above examples in the picture indicate that such investments promote knowledge sharing and innovation, which also need to be sustainable in terms of environmental, social, and governance principles. From this perspective, electric vehicles and related investments have become important elements of green transportation.

The relationship between the East and the West can even be further extended to emerging industries and fields, such as hydrogen energy and nuclear fusion energy, as well as digital solutions based on 5G like the metaverse. China has built the world's largest 5G network, with 524 million 5G mobile users, and has also announced a breakthrough in its artificial sun. In terms of digitalization in the currency field, China has been leading the pace of sovereign currency transformation, and its digital currency electronic payment projects have been put into real economy trials, leading the way in pilot coverage. The digitization of currency is very important. Without digital currency, a digital society would be impossible to talk about.

In fact, China seems to have mastered the operating rules of the new knowledge economy, and this content is also emphasized in the 2022 global discussion paper "New Sustainable Economics - Comprehensive Discussion Collection" published by the Hungarian National Bank. If Hungary, along with China and other partners, recognizes the exponential benefits of knowledge creation, I am confident that the international community can handle the most pressing issues of our time well, not only to address climate change, but also to maintain people's well-being and the stability of the international order.

So how can we embark on the path of collaborative innovation? In addition to the transfer of business knowledge, I strongly recommend decision-makers to make good use of opportunities for university cooperation. In today's era, the importance of data is comparable to that of oil, and knowledge and experience are new tools for mining data. International university cooperation contributes to the development of these "soft" skills, and an indispensable and important aspect is cross-cultural understanding, which is also the core of modern innovation activities. Hungary is strengthening exchanges with Chinese universities such as Fudan University, and I am proud of this. Many Hungarian universities that aspire to become world-renowned universities are also admitting more and more Chinese students.

The Hungarian National Bank is leading the further strengthening of dialogue and building a knowledge network. Since 2019, we have held four sessions of the Budapest Eurasian Forum, dedicated to promoting exchanges between the political, business, and academic communities of the East and the West.

We will continue to follow this path and unwaveringly uphold the spirit of mutual benefit and win-win international cooperation. Finally, I would like to quote a famous quote from Confucius: "Isn't it also said to learn and practice at the right time? Isn't it also enjoyable to have friends coming from afar?"

Yes, in Hungary, we are firmly committed to a positive answer.

The original title of this article was "Get smart"

Editor in Chief: Song Ping, Luan Ruiying

Editor | Zhang Zhao

Interns Zhuang Shuhan, Feng Xiaoyuan, Qin Jiale, and Chen Yushu also made contributions

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