Hungary becomes 1st EU nation to join China’s Silk Road network

June 7, 2015, 6:19 am

Hungary has signed an agreement with China officially joining Beijing’s ambitious Silk Road network, a Chinese Foreign Ministry statement said.

Hungary becomes the first European country to join China’s “One Belt, One Road” project. The Silk Road could be the second China-led project in recent months to attract a flurry of EU participation.

The agreement on the Silk Road was signed on Saturday by Chinese Foreign Minister Wang Yi and his Hungarian counterpart Peter Szijjarto.

“China will work together with Hungary to step up the modernization of the Budapest-Belgrade railroad, and the construction of China-Europe land-sea express line and other major infrastructure projects,” Wang was quoted by Chinese state agency Xinhua. China is helping fund and build a railway connecting Hungary and Serbia.

The Silk Road is “one of the most significant concepts in world trade” according to Hungarian Foreign Minister Szijjarto.

In addition to trade efforts, China is seeking to boost its global influence by signing up countries to its Asian Infrastructure Investment Bank (AIIB). Hungary is also a member of the Bank.

Half of the European Union including Germany, Britain, France, Italy are founding members of the AIIB.

The AIIB is opposed by the US because it will compete with institutions where America has considerably more influence—organizations such as the World Bank and the International Monetary Fund.

The authorized capital of the AIIB is $100 billion and the initial subscribed capital is expected to be around $50 billion. The paid-in ratio will be 20 per cent.

In March this year, China’s President Xi Jinping said he hoped its annual trade with the countries involved in Beijing’s plan to create a modern Silk Road would surpass $2.5 trillion in a decade.

Under the so-called “One Belt, One Road” initiative, China aims to create a modern Silk Road Economic Belt and a 21st Century Maritime Silk Road to boost trade and extend its global influence.

China’s Commerce Minister Gao Hucheng said previously that more than 50 countries had shown interest in the initiative.

Beijing welcomes more European countries to look East, and strengthen cooperation with China and other Asian countries, and participate in the “One Belt, One Road” in various ways, said Wang Yi on Saturday.

The Silk Road connected China and Europe from around 100 B.C.

The 4,000-mile road linked ancient Chinese, Indian, Babylonian, Arabic, Greek and Roman civilizations.

A new map unveiled by Xinhua shows the Chinese plans for the Silk Road run through Central China to the northern Xinjiang from where it travels through Central Asia entering Kazakhstan and onto Iraq, Iran, Syria and then Istanbul in Turkey from where it runs across Europe cutting across Germany, Netherlands and Italy.

The maritime Silk Road begins in China’s Fujian and ends at Venice, Italy.

The network would include building railways, highways, oil and gas pipelines, power grids, Internet networks, maritime and other infrastructure links.

Earlier last year, China announced a $40 billion Silk Road Fund to strengthen connectivity in the Asia-Pacific region.

China, with $4 trillion in foreign exchange reserves, is pushing for the growth of its own multilateral bodies, including the AIIB, the BRICS Bank and a bank for the Shanghai Cooperation Organization, but also seeking to strengthen its voice at the World Bank and the International Monetary Fund.

TBP and Agencies