Hungary’s government has initiated a formal investigation into significant foreign investments involving Chinese automaker BYD. This probe follows the resignation of a former foreign minister from Parliament last week to accept an executive position at the electric vehicle company. The move has triggered allegations of a conflict of interest, particularly concerning the minister's previous role in facilitating substantial state support for the manufacturer.
Prime Minister Péter Magyar addressed lawmakers on Monday, stating that the official, a close ally of former Prime Minister Viktor Orbán, had provided the company with extensive state aid during his time in office. According to Magyar, this support included hundreds of billions of forints in public funding, along with diplomatic backing and state-funded infrastructure projects. The investigation is set to encompass all subsidies, tax breaks, permits, environmental exemptions, and investments granted to large multinational corporations throughout Orbán’s tenure. Magyar emphasized that the inquiry aims to determine who authorized these decisions, which professional warnings were disregarded, and the resulting financial and environmental burdens placed on taxpayers and local communities.
Neither the former minister nor BYD have provided a response to the allegations regarding a conflict of interest. The former diplomat has characterized his new role as a prestigious opportunity to contribute to one of the automotive industry's major success stories. During his time in government, he played a central role in attracting Chinese investment, including the 2023 announcement that BYD would establish its first European factory in Hungary. This move was designed to help the conglomerate bypass European Union import tariffs on Chinese electric vehicles. Furthermore, in 2025, he announced that BYD would receive 20 billion forints, equivalent to $63.7 million, in government assistance to establish its European headquarters and a research and development center in Budapest.
These initiatives were part of a broader government strategy to transform Hungary into a global hub for lithium-ion battery manufacturing by attracting Chinese firms. However, these developments have faced opposition from local residents, environmentalists, and political rivals who fear the industry could jeopardize water supplies and deepen the nation's economic reliance on China.
Beyond the BYD inquiry, the former foreign minister’s tenure was marked by controversy over his close ties to Russia following its 2022 invasion of Ukraine. He frequently traveled to Moscow to secure oil and gas agreements, often maintaining a close relationship with Russian Foreign Minister Sergey Lavrov. Reports during the 2026 election campaign suggested he provided Lavrov with real-time updates on internal European Union discussions, a claim the former minister has dismissed while confirming he consulted with his Russian counterpart regarding EU agendas. Prime Minister Magyar indicated that an investigation into the minister's connections to the Russian government has also been launched.
