Hungarian Prime Minister Viktor Orban met with Bank of China chairman Ge Haijiao in Budapest on May 12.

The talks focused on expanding the Chinese banking giant’s operations in the country, according to a brief government statement.

Bank of China, one of the world’s largest financial institutions, has been active in Hungary since 1997. While details of the meeting were scant, it comes less than a year after Budapest borrowed €1bn from a consortium of Chinese banks.

According to some observers, the Orban government may be seeking further financial support ahead of next year’s elections, as EU funds remain suspended and economic growth will likely miss targets again. 

The deal, the largest single Fx borrowing by Hungary’s debt management agency (AKK) outside the bond markets, was kept in secrecy and was only confirmed after press inquiries.

In size, it only rivals the $917mn bank loan disbursed by Chinese banks for Budapest–Belgrade railway project. The deepening financial links with China highlight Orban’s continued eastward pivot, even as critics question the transparency and geopolitical implications of such deals.

Foreign Minister Peter Szijjarto also met with Bank of China executives and praised the lender’s strategic role in Hungary’s financial landscape and its contribution to fostering bilateral relations. He also welcomed the easing of the US-China trade relations.

"Hungary’s two most important economic partners outside the EU are China and the United States. The better their relationship, the better for us," he wrote.

Hungary is to stand to lose big from an escalating trade war as one of the most open economies in the EU, with its total trade volume accounting for more than 80% of GDP. The National Bank estimated that in the worst-case scenario, some 0.5pp could be shaved off the country’s GDP in 2025.

While some analysts have predicted that Hungary would have to choose sides in the trade war and eventually loosen ties with China to align with the US administration, but others argued that the Washington has little leverage to pull even close allies away from the Asian powerhouse as Hungary

Economy Minister Marton Nagy dismissed US efforts to counter China’s influence, noting Budapest sees "no investment potential from the US that would be on par with China."