Page 93 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.78, # 2, 2021, pp. 89-104

Despite the impact of the new crown pneumonia epidemic, the bilateral trade
volume between China and Hungary maintained a substantial growth of 12.3% from
January to October 2020. The annual bilateral trade volume reached 11.69 billion
US dollars, a year-on-year increase of 14.4% and a record high. China has become
Hungary's most important trading partner outside Europe. Whether in the fields of
economy, trade, investment or finance, the pragmatic and cooperative relationship
between Hungary and China is exemplary. The 3rd China International Import in
Shanghai in November 2020 At the expo, the intentional turnover between China
and Hungary was four times that of the previous one (Meng. 2020).

RESEARCH METHODS
For first, I conducted a desk research, in order to summarize and discuss the
literature sources dealing with The Belt and Road Initiative and the basic
background of China and Hungary.

I prepared a wide analysis for the macroenvironment using the PESTEL analysis of
China in relation with the“The Belt and Road” program. I also pointed out
Hungary's advantages and disadvantages in trade with China under OBOR initiative.
Based on statistical (secondary) data I conducted analysis to introduce the trade
connections between China and Hungary, compared the RCA indices of the two
countries and explored the trade connections. At last, I put forward some
suggestions.

Advocate PESTEL analysis of the macro environment
Policy
China is Hungary's fourth largest trading partner. Hungary is also China's third
largest trading partner in Central and Eastern Europe. In 2010, the Hungarian
Government decided to strengthen ties with its trading partners in the East, known as
the "Eastern Opening" policy. Chinese-Hungarian relations have set many "first"
records. Hungary was the first European country to sign a document with China on
jointly promoting “The Belt and Road” construction cooperation, the first country to
launch the "Belt and Road" working group mechanism with China, the first central
and eastern European country to issue renminbi bonds and set up an office of the
China Tourism Administration.Go Out policy is China's strategy to encourage its
enterprises to invest overseas. Most nations favor attracting inward foreign
investment, and support outward foreign investment only passively. China attaches
importance to both inward and outward foreign investment. The Go Out Policy (also
referred to as the Going Global Strategy) was an effort initiated in 1999 by the
Chinese government to promote Chinese investments abroad.

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