Index – Economy – One of the members of the government unexpectedly traveled to China

Finance Minister Mihály Varga did not miss the sprinkling either, and at the same time, on Easter Monday, he unexpectedly left for China for negotiations – reported the head of the ministry about this on his Facebook page. According to the Index information, days full of work would await the wallet dealer, since

among others, he will hold talks with Chinese Finance Minister Lan Foan on Tuesday.

We understand that Mihály Varga wants to emphasize the position of the cabinet: instead of blocking and seclusion, it is necessary to strengthen cooperation between Europe and China. It is important to highlight three very important data:

According to last year’s data, China is Hungary’s 9th most important trading partner.

Its share in total Hungarian foreign trade reaches 4 percent, making it Hungary’s most important non-European partner.

Last year, most investments came to Hungary from China.

The government has repeatedly emphasized that Hungary is already playing a bridging role in the economic cooperation between Europe and China. China is the world’s second largest economy, Hungarian-Chinese economic, logistical and financial relations, as well as high-tech investments, will contribute to the growth of the economy in the coming years.

The Chinese economy before rebounding?

We have previously covered the fact that China has set an ambitious economic growth target of around 5 percent for this year. Political leaders promised to transform the structure of the economy in response to the challenges. Beijing is trying to increase confidence in the Chinese economy, but the country is struggling with a number of challenges in the real estate sector, deflationary pressures, the outflow of foreign capital, a battered stock market and a record low birth rate. According to Macquarie Group’s leading economists, the target of around 5 percent is ambitious but achievable.

A Bloomberg wrote on Sunday that the official manufacturing purchasing managers’ index (bmi) in China rose to 50.8, surpassing economists’ forecasts. Thus, China’s manufacturing industry expanded for the first time in six months.

We show Mihály Varga’s strategy

Recently, Index had the opportunity to visit the National University of Public Service with the Minister of Finance, where Mihály Varga explained in depth his ideas about the economy to the students and how he sees the economic recovery. Even the title of the presentation was telling: Crisis management, stability and recovery. He then illustrated the current macroeconomic situation with a spectacular analogy:

according to him, If the government is faced with a challenge, the nature of the crisis must first be recognized. if this has happened, you need to stabilize the situation, exactly the same as with a patient.

According to Mihály Varga, recovery can only come after that. He reminded that the prime minister sees clearly: “we are living in the age of crises”. He went on to say that “Hungary was able to recover better and more efficiently than the EU average”, and according to the Minister of Finance, the European Commission already recognizes this nowadays.

In its latest forecast, the European Commission has downgraded its forecast for the economic growth of the European Union, expecting an unchanged 2.4 percent growth in the Hungarian economy this year and 3.6 percent next year.

THIS YEAR, ACCORDING TO EXPECTATIONS, THE GROWTH OF THE HUNGARIAN ECONOMY MAY BE BETWEEN 2-3 PERCENT.

“The deficit and the size of the public finances must be reduced.” According to Mihály Varga, Hungary must return to pre-epidemic growth. And for this, the government has an “elementary duty to improve” competitiveness.

According to him, for this “the labor market must be further activated, the employees must be mobilized, and inflation must also be kept low, which also creates the normalization of interest rates”. He then stated that the low interest rate is necessary for growth, and efforts must be made to reduce the risks in the public debt.

Finally, he gave two important answers to the students’ questions:

According to him, the European Parliament is deliberately causing economic damage by floating it in front of investors in order to withhold the funds due to Hungary. “Let’s record that this is intentional harm.”

Regarding the introduction of the euro, he stated that, in a legal sense, the accession was settled: “We have signed the accession document. The question is rather whether we could be the winners of the accession?” He then cited Slovakia as an example: it is a mistake to think that the euro will solve problems. “Economic decisions solve difficulties.”

(Cover photo: Mihály Varga 2023 . on December 13. Photo: Kata Németh / Index)

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