Hungarian town seethes over Chinese plant
Residents worry battery factory will drain water supply and pollute region
MIKEPERCS, HUNGARY >> The small-town mayor, long a loyal foot soldier for Hungary's governing party, recently committed what he described as “political suicide,” throwing himself in the path of a $7.8 billion Chinese battery factory project promoted by his dissent-intolerant prime minister, Viktor Orban.
“It is like lying in front of a steamroller,” Zoltan Timar, the mayor of Mikepercs, said of his decision to side with residents opposed to the project, which his Fidesz party championed. “I just hope it won't roll over me too soon.”
The factory, which would be the biggest of its kind in Europe, is the fruit of a yearslong diplomatic and economic tilt by Orban away from the West toward countries like China and Russia. It promises to put Hungary at the center of a wrenching and, for some, highly profitable green transition, with electric cars leading the way.
But residents in Mikepercs, a Fidesz stronghold in eastern Hungary, are seething over the arrival on nearby farmland of bulldozers and dump trucks preparing the way for the Chinese plant. Many worry the project would create pollution, drain their water supply and bring an influx of Chinese and other foreign workers.
“Pocketknives have opened up in everyone's pocket,” said Eniko Pasztor, a pensioner and opponent of the factory, using a Hungarian phrase used to express anger.
Two public hearings on the venture, held in the nearby city of Debrecen in January, descended into chaos amid fistfights and shouts of “traitor” directed at officials by residents anxious about their future health and property values.
Taman Polgar Toth, a journalist with a local news site, Debreciner, said he “had never seen anything like it — hundreds of people yelling and fighting.”
Behind the noise, however, lie two of the most consequential and closely entwined issues of the day: China and climate change. Disagreement over what to do about either has thrust tiny Mikepercs (population: 5,300) into a global ruckus.
In a push to dominate new technologies vital to the reduction of carbon emissions, China has lavished tens of billions of dollars' worth of tax breaks and other subsidies on its electric carmakers.
It is now the world's biggest maker of batteries for electric vehicles, led by Contemporary Amperex Technology Ltd., or CATL, the company behind the Hungarian project.
China's dominance of the industry has raised alarm in the United States, where a recent battery factory project involving CATL in Virginia collapsed after Gov. Glenn Youngkin denounced it as a “front for the Chinese Communist Party.” In Europe, there have been warnings about the risks of dependence on Chinese battery manufacturers.
CATL already has a $2 billion plant in Germany that was widely welcomed, but its plans for the larger one in Hungary have left it at odds with the nearly half of the country's population that, according to a survey this week, wants new battery plants banned.
Orban's courtship of China and its investors is part of Hungary's “Eastern Opening,” a policy he announced in 2010 in an abrupt turn away from his previous role championing democracy, human rights and Tibet's exiled spiritual leader, the Dalai Lama.
The shift has delighted Beijing. On a visit last month to Budapest, the Hungarian capital, China's senior foreign policy official, Wang Yi, praised Hungary for its “China-friendly policy.”
Many other European countries have soured on China, in part because of its support for Russia over the war in Ukraine. But Hungary — already isolated from its NATO and European Union allies because of its equivocal stand on the war — has doubled down.
“He is the last man standing as a friend of China in the European Union,” said Tamas Matura, a foreign relations scholar at Corvinus University in Budapest.
When Hungary announced the battery plant in August, it trumpeted the plant as the biggest foreign investment in the country's history.
Previous Chinese megaprojects in Hungary — notably, a nearly $3 billon high-speed railway between Budapest and Belgrade, the capital of neighboring Serbia — have been
mired in delays and accusations of corruption relating to secret contracts for Orban's allies in business.
Now the battery plant has been met with stiff opposition, first from local residents and then from opposition politicians and civil society activists.
They were joined last week by the governor of Hungary's central bank, Gyorgy Matolcsy, a former Fidesz stalwart who accused Orban's government of stoking inflation by pursuing economic growth through large foreign investments in basic manufacturing, like battery plants. Hungary has become a manufacturing hub for German carmakers; Asian companies like Samsung, which has a battery plant near Budapest; and other foreign corporations.
The new Chinese battery factory is expected to create 9,000 jobs, but some economists say the macroeconomic gains, like years of robust growth, from such projects are offset by the inflation they help fuel. Hungary has Europe's highest annual rate of inflation, running at around 25%.
Gergely Karacsony, the mayor of Budapest, a prominent liberal critic of both Orban and China who has renamed several streets in the capital to give them names like “Free Hong Kong Road,” said the “huge Chinese factory is a symbol of Hungary's model of capitalism” based on what he said were “low wages, low environmental standards
and low protection town hall meeting and invited for workers.” CATL to address local
“In Hungary, we have concerns. The company, he socialism for the elites and said, told him it was “too capitalism for the masses,” busy” to send someone to he said. answer questions.
More worrying for the Asked about the meeting, government is the public a spokesperson for the rift, small but highly unusual, Chinese company, Fred that has opened up Zhang, said CATL “communicates within the ranks of Fidesz. regularly” with the
Timar, the mayor of mayor and has been “actively Mikepercs, won 100% of responding to questions the vote in the last election and concerns from local in 2019, his fifth victory in residents.” a row for the party. Many of the concerns, he
Struggling to contain added, “are misinformation discontent among its supporters, and misunderstanding. We Fidesz has deployed intend to strengthen our its vast media apparatus communications with local to paint the furor communities in the future.” over the battery plant as Pasztor said she has the work of outside agitators nothing against China but funded by Hungarianborn did not want neighborhood financier George Soros, houses turned into dormitories the governing party's for Chinese and other go-to villain, and “fake” foreign workers, a widespread residents mobilized by the concern after years opposition. of anti-immigrant fearmongering
But Fidesz's problems by Orban and began in November when his party's media machine. a group of women in Mikepercs, The Fidesz mayor of angry that they had Debrecen, Laszlo Papp, a not been consulted about strong supporter of the Chinese the Chinese project, organized factory, acknowledged a street protest, the that many locals were upset first of many. but said this was largely
Pasztor, the pensioner, because there “is a lot of joined other women to fake information” about form Mothers of Mikepercs, how much water the plant a group that wants to halt would use, where factory construction of the factory workers would come from until residents have reliable and other issues. information about what it He added that it was important would mean for their water to keep an eye on supply, noise levels and pollution. long-term economic development Another big question and not be distracted they have is where the by “momentary plant's workers would come shifts in the public mood” from, since unemployment driven by political rivalries. in the area is nearly nonexistent. “You can't run a city on the basis of mood and feel*ings,”
The mayor, Timar, held a he said.
The Chinese factory, its supporters say, is vital for the whole country.
“The green transition is inevitable, and we want to be part of it,” said Mate Litkei, director of the Climate Policy Institute in Budapest, hailing the Chinese investment as an important contribution to the shift away from fossil fuels.
Litkei said that Hungary needed to ensure there were enough batteries on hand before 2035, when a European Union ban on the sale of new gas and diesel cars will start.
Mercedes-Benz Group, which has a big factory in Hungary, welcomed CATL's plans, saying it would be the “first and biggest customer of the new plant's initial capacity.”
When CATL in January opened a much smaller battery factory in Germany, it met with no opposition from local residents or German environmentalists, whose Green Party is part of the coalition government in Berlin.
In Hungary, however, politics have become so polarized and toxic, with Fidesz for years vilifying environmental activists as agents of Soros, that neither side trusts the other.
Hungarian environmentalists see electric cars as a big improvement on carbon-emitting vehicles but point to the damage caused by the mining and processing of lithium, cobalt and other hazardous materials used to make batteries.