Welcome to the 49th issue of the CEEasia Briefing.
In this issue, we dissect the following topics:
- China to build BYD factory in Hungary
- European reactions to Taiwan elections
- Vietnam-Slovak relations
If you like what you see, please forward this message to your friends and colleagues who can subscribe here.
Do you need to know more about East Asia? Don’t hesitate to shoot us a message about custom analysis tailored to your needs.
1. China to build BYD factory in Hungary
What’s going on? Chinese EV producer BYD has announced its intention to build a factory near the southern Hungarian city of Szeged. After another recent Chinese investment of battery maker CATL in Debrecen, this adds to Hungarian ambitions of becoming Europe’s manufacturing hub for electric vehicles (EVs). However, many voices in Hungary highlight threats stemming from overreliance on Chinese investments, both political and environmental, and call for a greater economic independence and diversification.
Going deeper… China has in the past decade mastered development and production of green technologies, becoming a major producer of renewables as well as EVs. BYD has also recently surpassed Tesla to become the bestselling EV maker globally. For China, setting up production inside the EU would be a win; such firms would not be subject to the EU’s anti-subsidy investigation into Chinese carmakers. For the EU, however, the proposed project may prompt further concerns about China’s increasing economic footprint and its ensuing security implications in Europe. Indeed Szeged is located close to Serbian borders and the China-built Budapest-Belgrade railway that stretches further to Greece’s port Piraeus, partially owned by China.
This means… Hungary under Prime Minister Orban has been trying to position itself as a bridge between the West and the East, attracting many Asian investors by offering subsidies and tax reductions. At the same time, Hungary’s automotive-centered economy can serve as a double-edged sword; hosting a number of European carmakers eager to switch to the production of EVs to become compliant with the EU’s zero-emission targets can boost Hungary’s position in global value chains. However it is also likely to increase its vulnerability due to the corresponding path dependencies.
2. European reactions to Taiwan elections
What’s going on? Taiwan’s recent presidential election that took place on January 13 garnered global attention. In their responses to the outcome of this election, most EU states followed the established practice of congratulating the Taiwanese electorate without naming the new President-elect and reiterating their adherence to their respective One-China policies.
Going deeper… The EU has shown a significant interest in acknowledging Taiwan’s recent election. According to Taiwan’s Ministry of Foreign Affairs, more than 200 political figures from 25 EU countries extended their congratulations. Most of these, including Germany, France, and the Netherlands, did not mention the newly elected President Lai Ching-te (William Lai) by name, focusing on emphasizing their support for peace and stability in the Taiwan Strait and adherence to the One-China policy instead.
That said… The Lithuanian Minister of Foreign Affairs and the Czech President were notable exceptions, explicitly congratulating Taiwan’s newly elected President. Czech President Petr Pavel was the first European head of state to congratulate Lai Ching-te on his electoral victory. During his one-year tenure, he has overseen several diplomatic milestones in Czech-Taiwanese relations, including an official phone call with the outgoing President Tsai Ing-wen, during which Pavel expressed his desire to meet Tsai in person. Pavel is also the first European head of state to have publicly shared a podium with the Taiwanese foreign minister Joseph Wu at the European Values Summit 2023.
Similarly… The chairs of Baltic Foreign Affairs Committees and the Lithuanian foreign minister also congratulated the incoming President Lai. Soon after, the Lithuanian delegation, led by the chair of the Lithuanian parliament’s Taiwan friendship group, conducted a six-day visit to Taiwan on January 21, meeting President Tsai Ing-wen, President-elect Lai Ching-te, Speaker of the Legislative Yuan You Si-kun and the Minister of Foreign Affairs Joseph Wu.
To conclude… China’s foreign ministry has criticized the nations congratulating Taiwan, citing concerns over the legitimacy of Taiwan’s Democratic Progressive Party (DPP) and the new president-elect. Beijing views the DPP as a separatist force and questions its representation of Taiwan. It prefers the opposition party Kuomintang, which has obtained the highest number of seats in the simultaneously held Legislative Yuan election.
3. Vietnam-Slovak relations
What’s going on? In mid-January, Deputy Speaker of the Slovak National Council, Ľuboš Blaha, met with the Vietnamese Ambassador to Slovakia, Nguyen Thanh Tuan, to discuss current international matters and explore cooperation between the two countries.
Going deeper… Blaha emphasized Vietnam’s pivotal role as a key ally for Slovakia. He has also expressed support for the embassy’s many initiatives under Tuan. Ambassador Tuan, on the other hand, expressed appreciation for the recent government’s decision to officially recognize the Vietnamese community in the country as an ethnic minority group. He highlighted that this recognition creates better conditions for the community to enhance its cultural and educational initiatives.
Meanwhile… Prime Minister Robert Fico met with his Vietnamese counterpart, Pham Minh Chinh, at the 54th Annual meeting of the World Economic Forum, where they discussed Slovakia’s support for implementing the EU-Vietnam Free Trade Agreement (EVFTA) and endorsing the EU-Vietnam Investment Protection Agreement (EVIPA). Additionally, both parties agreed to strengthen collaboration in education and mutually support each other in various multilateral forums such as the UN, ASEM, and the ASEAN-EU cooperation mechanism.
This means… High-level bilateral meetings indicate that Slovakia plans to bolster cooperation with Vietnam, primarily focusing on tourism, education, business, and investment. This is likely to boost bilateral relations after several years of deterioration prompted by the 2017 abduction of a Vietnamese businessman via Slovakia and the 2020 expulsion of a Vietnamese diplomat from Slovakia.
Quick takes on CEEasia developments
TAIWAN | Taiwania Capital’s CEE investment fund announced a $10 million investment to the Czech-based company Daytrip, a transfer provider with a global footprint, marking Taiwania’s second investment into Czech business.
SOUTH KOREA | The Slovak government has approved an income tax relief of €29.95 million from 2026–2030 for the automotive manufacturer Kia. The Korean plant is planning to invest €108 million as part of its transition to EV production.
JAPAN | Yoko Kamikawa, the Japanese Minister of Foreign Affairs, undertook a visit to Poland. Both governments have initiated negotiations for a Social Security Agreement. Kamikawa also announced Japan’s commitment to allocate $37 million to the NATO trust fund, aiming to supply Ukraine with drone detection systems.
INDIA | The cabinet of India, led by Prime Minister Modi, approved the Memorandum of Understanding between India and the EU on semiconductor cooperation. The initial MoU was signed in late November and aims to strengthen supply chains, research and innovation.
NORTH KOREA | Slovakia and Hungary were the sole EU member states to abstain from supporting a joint statement by Western countries on the alleged transfer of ballistic missiles from North Korea to Russia and their use in Ukraine, citing a lack of evidence.
