The Golden Bridge Between China and Hungary

by Song Ran
[Hungary] Pert Erno

The sparkling blue Danube that flows serenely across Hungarian capital Budapest, also known as the Pearl of the Danube, has made the country accessible from all directions and witnessed Budapest undergo stupendous changes.

One of them is the Central European Trade and Logistics Cooperation Zone (CECZ) standing on its bank, a special economic zone where people from different countries can learn about featured products from China up close. Logistics companies bring goods from all over the world, especially from China, here and deliver more goods from here to other parts of the world. The CECZ also runs an online platform that sees hundreds of thousands of e-commerce transactions every day.

Driver of Development

Its years of operation and accumulation of companies and experience have made the CECZ a driver of integrated development and mutual promotion of trade and logistics. It provides quality and comprehensive services to both Chinese companies that do business in Europe and European enterprises that sell Chinese products and is in line with the Hungarian government's national development plan of becoming a logistics hub in Europe.

The China Commodity Exhibition Center in Hungary

Before he founded his company Idol Science and Technology, Balta Attila used to be a senior executive of a Polish lighting company's Hungarian branch. But his dream was to start a company of his own.

By chance, Attila got in touch with a Chinese company, NVC Lighting, at an exhibition of Chinese goods organized by the CECZ. After a few exchanges, Attila decided to collaborate with NVC.Helped by the CECZ, he visited Guangdong, a province in south China, several times to check out the market. Finally, he set up his own Hungarian company that is the sole agent of NVC in Central and Eastern Europe. He has reinforced the company's Hungarian market, and expanded in Poland, the Czech Republic, Romania and Lithuania, relying on the excellent product quality and the channels he cultivated in the past.

"I used to both love and fear Chinese companies," Attila said. "The love came from the fact that Chinese products are increasingly of better quality and have got more and more competitive. The fear stemmed from my earlier prejudice. However, the high quality and inexpensive Chinese products have brought tangible benefits to Central and Eastern Europe. I am now exploring markets for my own company with quality Chinese products. I am very proud that I chose a Chinese company to grow with together."

Attila's company showcases NVC lighting products.

There are many businesspeople like Attila at the CECZ who act as agents of Chinese products in Hungary and other Eastern European countries. Some have also founded their own companies with their own production lines to grow their wealth. Countless people have bought quality building materials, light industry and textile goods, daily necessities, food and fitness equipment through the CECZ and its annual Chinese product exhibition.

Among the first batch of Hungarian companies to settle in the CECZ is Hungary Ghibli Transportation Ltd. (hereinafter referred to as Ghibli). Ghibli used to provide logistics services mainly for European companies and was keen to expand its business in China. However, it couldn't do it due to the lack of information, channels and promotion. The CECZ therefore was a boon to the company.

Since moving into the CECZ, Ghibli has attracted a large number of premium customers. It utilizes the CECZ's resources to provide logistics through the China Railway Express, China-Europe Land-Sea Express Line and air charters, and has established a special overseas warehouse to serve domestic cross-border e-commerce companies.

As its business has grown, the number of Ghibli's employees has jumped from 160 to 328. From being the 11th biggest local logistics company in 2014, it rose to the third place in 2018. Talking about this impressive performance, Szabo Zoltán, the head of the company, said entering the CECZ was the wisest choice he had made in his career. "It's been good working with my Chinese clients. I'm fully confident that Ghibli will become the most successful logistics company through the CECZ platform," he said.

Trucks wait for loading and unloading at the Csepel Port Logistics Park in Hungary.

The CECZ has also established the China Commodity Exhibition Center in Budapest and two logistic parks, one in the Port of Csepel and the other in Bremen Port in Germany. Industrial clusters of machinery and electronics, building materials and home furnishing, lights and textiles, and e-commerce and overseas warehouses have come up in the CECZ and an extensive marketing and network distribution system has been formed, spanning Europe and major cities in China. The CECZ's next plan is to build itself into a comprehensive hi-tech trade and logistics zone, focusing on a modern logistics center and an efficient business information management system.

In 2018, there were 172 enterprises in the CECZ with a total trade volume of USD570 million and providing jobs to more than 1,500 people, the majority of whom – 1,412 – were foreigners.

A Milestone and a Link

After establishing a stable development framework and operation model, the CECZ began to explore cooperating with the China Railway Express, opening up the China-Europe land transport channel and participating in the construction of the China-Europe trade corridor.

On May 27, 2017, a China Railway Express freight train from Changsha to Budapest was flagged off from the Xianing Freight Yard in northern Changsha, the capital of Hunan Province in south China. A whistle signaled the departure of the No. X8422 freight train. Carrying 41 containers of electronic products, shoes, apparel, fiber optic cables, hardware and machinery parts made in China, the train left China through the border city of Erenhot, and after traveling through Mongolia and Ukraine, arrived at BILK – the Budapest International Logistics Center – in southeast Budapest at the scheduled time on June 16, 2017.

Subsequently, the Chinese-made products carried in the 41 containers were quickly delivered to thousands of households in European countries through Hungary's advanced traffic and logistics network.

The No. X8422 Freight Train of China Railway Express runs from Changsha to Budapest.

It was a historic moment. The Changsha-Budapest freight train had helped cut transport time to Central Europe by at least 10 days.

For all those involved in the operation, the debut of the freight train is a milestone: It is the fruit of the hard work and planning done in the previous years; and it has opened the door to future growth and breakthroughs. Since the start of the freight service, 54 trains have arrived in Europe from Changsha, carrying over 2,084 containers and leading to platform expansion, formation of industrial clusters and service upgrades.

The China Railway Express goes from Budapest to Jinan.

In addition to the Changsha-Europe freight service, the CECZ is also collaborating with the China Railway Express in the operation of non-stop freight trains from other major Chinese cities, such as Xi'an, Chengdu, Xiamen and Jinan, to Budapest. So far, 68 trains have arrived in Budapest, carrying a total of 3,057 containers. In 2018, the CECZ began to cooperate with China Ocean Shipping (Group) Company (COSCO) to run 49 combined sea-rail transport trains, carrying a total of 1,911 containers. Moreover, the CECZ has opened direct charter flights from Hong Kong Special Administrative Region in south China to Budapest. Until now, there have been 66 direct flights, with a total freight volume of 5,429 tonnes. Through exploration, cooperation and experience in cross-border transport, the CECZ has established new channels to provide land-sea-air intermodal services.

Good Timing, Geographical Convenience and Harmony

The CECZ's development over the years has seen the area develop from where it operates, once a sparsely populated open ground, into a fully equipped modern trade and logistics cooperation zone with facilitated transportation. A provider of comprehensive and integrated online and offline services, the CECZ is a contributor to the common development of China and Europe.

Budapest by the Danube

Both the locals and the people working at the CECZ agree that the platform is the result of good timing, geographical convenience and harmony between the people of China and Hungary and the epitome of Sino-Hungarian traditional friendship and win-win cooperation.

In recent years, Central and Eastern Europe have been plagued by the European debt crisis, lacking new drivers of economic growth. The Belt and Road Initiative proposed by China, together with many countries' development plans have created a golden opportunity for the CECZ's development.

Hungary, located at the heart of Europe, has over 1,000 years of history where Eastern and Western cultures converge. Bordering seven countries, it has always been a business conduit. It is accessible from all directions by land, sea and air, and blessed with a sound transport network and developed logistics and telecommunications infrastructure. Goods from other places can be quickly and efficiently delivered to most parts of Europe via Hungary. This beautiful country with its advantageous geographical location and overall stability has given the CECZ a geographical advantage for its development.

At the CECZ, while a large number of Chinese companies are promoting their brands and services, many local enterprises and foreign companies too are exploring opportunities and seeking cooperation. People from all over the world buy goods from the CECZ or seek to grow with it. The CECZ provides comprehensive and detailed services to enterprises and customers from all countries to advance their development and cooperation. It organizes trade exhibitions and is improving its intermodal transportation network and e-commerce platform. People from different places are hard at work to realize the common dream of a better life and progress together in harmony.

At the CECZ, Chinese companies such as Haier, Hisense,Lenovo and Gree collectively display the brand image and win-win cooperation development strategy of China.

Here, employees from different countries learn from one another. Farkas Istvan, a freight driver, speaks highly of his Chinese colleagues. "I have learned a lot from my Chinese colleagues," he said. "They are diligent at work and have a great sense of responsibility."

Enterprises in the same industry here want to go beyond competition and establish a higher level of cooperation. For instance, highway, rail, maritime and air logistics companies, which used to be competitors, have joined hands to increase the scale and standard of the logistics services and improve freight efficiency to strengthen Hungary as a logistics hub.

The China Commodity Exhibition Center in the CECZ

Hungarian Prime Minister Viktor Orbán has repeatedly said that the Belt and Road Initiative, aiming at opening wider to Europe, highly complements Hungary's own strategy of "opening to the East". From the ancient Silk Road to today's Belt and Road, people of China and Hungary and indeed all Europe have never stopped win-win cooperation, exchanges or mutual learning and the CECZ is a window that offers glimpses of a better future.


Project Overview:

The Central European Trade and Logistics Cooperation Zone (CECZ) sprawls over 750,000 sq m. Of this, the building area is 479,500 sq m, with 133,900 sq m under development.

The CECZ comprises of three units: The China Commodity Exhibition Center is in the 15th district of Budapest, which has an area of 25,000 sq m including a building area of 43,000 sq m. The Csepel Port Logistics Park, with a total area of 36,800 sq m and a building area of 16,500 sq m, is in Csepel, the 21st district of Budapest on the bank of the Danube. It is close to Highway M1 leading to Austria and the Czech Republic in the northwest, Highway M6 and Highway M7 going to Croatia and Slovenia in the west, Highway M5 leading to Serbia in the southeast, and Highway M3 that connects with Romania in the northeast. The Bremen Port Logistics Park is located in the traditional logistics area near Bremen Port along the lower reaches of the Weser River in northwest Germany. The 104,900-sq-m logistics park has a building area of 41, 700 sq m.