On Tuesday the former Hungarian minister of trade and foreign affairs announced that he will vacate his parliamentary seat to take up an executive role at BYD, the Chinese electric‑vehicle manufacturer that built a factory near Szeged with substantial public funding.

EU investigation into subsidies

The European Commission has prepared a formal probe into the financial contributions made by the Hungarian government and Chinese authorities to the Szeged plant, to determine whether they breach EU state‑aid rules. The investigation follows an anti‑subsidy case opened in late 2023 that resulted in an additional 17 % tariff on BYD vehicles, on top of the standard 10 % import duty. France and Italy have backed the tariffs, while Germany and Spain have warned of possible retaliation. Hungary and Slovakia have opposed the extra duty.

Revolving‑door concerns

Hungary does not have a legal cooling‑off period for former ministers nor a mandatory disclosure form for post‑government employment, placing it among seven EU states that lack formal rules on activities after leaving office. Transparency groups have warned that the absence of such safeguards encourages a revolving‑door effect, reducing public confidence by allowing former officials to shape policy in favour of private corporations.

In a brief statement the former minister described the BYD position as extremely honourable and noted that he would no longer receive taxpayer funding for duties performed as a public servant. Prime Minister Péter Magyar echoed the point, stating that the former minister will now be paid by a private employer rather than Hungarian taxpayers.

Labour and environmental issues at Szeged

The Szeged facility has been the subject of several controversies. Two employees died at the plant earlier in the year, and China Labour Watch reported alleged forced‑labour practices affecting Chinese migrant workers, including long shifts, week‑long workweeks, delayed pay, recruitment‑fee debt and confiscated identity documents. The subcontractor implicated in these allegations is linked to a Chinese construction group previously described by Brazil’s labour minister as operating in a manner comparable to slavery at another BYD site.

Hungarian officials have been urged to investigate the labour claims, but the European Commission has said the matter falls under national jurisdiction. The plant was also fined 10 million forints – roughly €28,700 – for soil contamination that required the destruction of nearby crops.

Broader context of Chinese EV investment

During Szijjártó’s tenure from 2014 to 2022, Hungary attracted roughly 25 % of all Chinese investment in the EU, acting as the public face of Prime Minister Viktor Orbán’s “Eastern Opening” strategy. Chinese electric‑vehicle sales now represent more than 15 % of the European market, prompting several manufacturers to relocate production into the EU to avoid duties. Examples include BYD’s Hungarian factory, Chery’s joint venture in Spain and Leapmotor’s assembly line in Poland.

EU funding and rule‑of‑law debate

Members of the European Parliament’s budget committees have questioned the adequacy of recent anti‑corruption reforms in Hungary and have sought stronger safeguards before the Commission releases up to €16 billion in funding that is currently frozen. The Commission estimates that up to 600 000 jobs could be threatened if the EU car sector does not adapt to rapid EV growth and Chinese competition.

Hungary’s new administration has signalled a shift on rule‑of‑law matters, a change noted by Rule‑of‑Law Commissioner Michael McGrath, who said there is a clear change of direction regarding rule‑of‑law issues. Prime Minister Magyar has said he will review Chinese investments but will not block or terminate them, indicating a continued openness to Chinese capital.