Hungary Eager and Uneasy Over New Status

Poised to join the European Union (EU) in May, Hungary anticipates a larger share of the global trade pie. During the 1990's Hungary served as a "backdoor to Europe" for U.S companies, and now it hopes to market this role to Chinese companies that wish to sell to Europe – they could avoid costly import duties by producing all or a large part of their products within the expanded union. But Hungary is also aware of the potential problems that might accompany their expansion – ironically, stiffer competition for jobs and foreign investment will come not from a new rivalry with Poland or the Czech Republic, but from Asia, particularly China. Already, Hungarian towns like Sarvar, a small spa town close to Vienna, have experienced the "ebb and flow of the global economy." When a factory set up to manufacture video game components for Microsoft was moved to low-wage China, over one thousand jobs were lost. But a contract to assemble TV sets for a Chinese company brought work back to Sarvar. Some analysts observing Hungary's entry into the EU and the global economy think it should not compete with China on wages, but instead make China "a strategic partner." – YaleGlobal