Hungarian government: centre of gravity in global economy shifted from West to East

The European Union is in great need of investments and trade from the East, and if the community hinders them, its global economic weight will lessen, the minister of foreign affairs and trade said in Brussels on Friday.

The ministry cited Péter Szijjártó telling a press conference after the EU Indo-Pacific Ministerial Forum that in recent years, the centre of gravity in the global economy had shifted from West to East.

Whereas in the past, some 70-80 percent of global investment was financed from Western capital and the remaining 20-30 percent from Eastern capital, this proportion has since turned around, he said.

Eastern and Western companies depend on each other more than ever before. “Some view this as a negative development, but I think it is good and positive,” he added.

“It is very important that in this new era, Europe should find the right responses because if bad responses are given to this new reality, they will cause much more severe problems in terms of the economy,” he said.

He said Europe needed investments and trade from the East, especially considering the fact that the electronic transition in the car industry, a crucially important sector of the economy, would be impossible without Asian suppliers. “If Europe barricades itself from Eastern investment and puts up barriers to trade with the East, then the European Union will further lose its economic significance,” he said, adding that China had already overtaken the EU in terms of GDP.

He confirmed that the Hungarian government would make further steps during Hungary’s upcoming EU presidency towards connectivity, and plans to speed up free trade talks with southeast Asian states including Malaysia, Indonesia, Thailand and the Philippines.

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“While we in Europe were tied up in our problems and outdated, ideologically forced disputes, one of the world’s largest free trade regions has been set up in South-East Asia,” he said.

Countries of the Regional Comprehensive Economic Partnership (RCEP) provide 29 percent of global GDP, and “it is therefore in the European Union’s interest to develop the closest possible cooperation with this free trade region”, he said.

The minister said that if the EU wanted to sign free trade agreements “with the intent of political and ideological lecturing”, then partners would obviously not enter the agreement.

He praised the success of Hungary’s policy of opening to the East. Had the government yielded to “pressure and attempts to discourage us”, Hungary would have lost out on some great opportunities, considering that the largest investments in the past ten years arrived from China and South Korea, he added.

Trade between Hungary and South-East Asian countries increased by 75 percent in the past ten years, and investments from the region helped the Hungarian economy’s shift to a higher gear and guarantee the maintenance of its growth path.

“Hungary is living proof that East-West cooperation indeed has great advantages,” he added.