Economic relations

Economic cooperation between the Republic of Korea and Hungary started to develop rapidly shortly after the diplomatic relations were normalized between our countries 18 years ago. Hungary was the first country from the so-called „former socialist block” which established diplomatic relations with South Korea, opening her diplomatic mission on the 1st of February, 1989 in Seoul.

That move was soon followed by other countries of the Central and Eastern European Region as well as by such major partners for Korea like China and Russia.

In the past 18 years Korea and Hungary had developed strong friendly relations in various fields including political, economic and cultural cooperation. The two nations have many similarities in their culture, history and language, which have brought their relations even closer.

The establishment of diplomatic relations had opened the way to concluding a series of important bilateral agreements, from which – in the field of economy - the agreements on trade, avoidance of double taxation and promotion and protection of investments have special importance. In 2005, following the accession of Hungary to EU, the outdated Trade Agreement was upgraded to a new, EU-conform Agreement on Economic Cooperation, while recently a new agreement has been signed on social security aiming at facilitating the Korean investments in Hungary.

Trade exchanges between our countries have witnessed a dynamic growth in recent years, as a result of which Korea has become one of the top trading partners for Hungary in Asia by now. While annual trade turnover in the ’80s did not reach the volume of 5 M USD, in 2006 it has exceeded the remarkable 1,6 billion USD.

Hungary has become an important destination for Korean core export goods, such as automobiles, trucks, consumer electronics, computer parts, and household appliances.

We are pleased to see the ever increasing trend in our bilateral trade exchanges, however it should be pointed out that within the trade volume the share of Hungarian exports, according to the Hungarian statistics, is almost seven times less than that of the Korean exports to Hungary. The bulk of Hungarian exports consists of chilled pork meat, while the rest includes chemical and pharmaceutical products, electric/electronic equipments and components, machinery as well as different consumer goods.

There are further untapped potentials for developing our trade relations. On short term basis prospects for increasing the supply of agricultural and foodstuff products, pharmaceuticals, including veterinary medicine, chemicals, like fine chemicals, medical and laboratory equipment, machinery, electronic components, vehicle parts and introducing Hungarian wine and a wide range of consumer products seem to be promising.

On medium term basis closer cooperation between Korean and Hungarian institutes and companies in IT sector, biotechnology, logistics, R&D and other related areas, would also contribute to intensifying economic and trade cooperation.

Investment relations are the other key area in our bilateral economic cooperation. From the very beginning Hungary had been a favourite destination for Korean investments. Up to 2005 the biggest Korean investor in Hungary was the Samsung-Group, including Samsung Electronics, SDI and Electromechanics. CRT TV sets manufactured by Samsung Electronics plant in Hungary are sold all over Europe. Other big conglomerates, like Hanwha-Group, LG-Group, Daewoo-Group are also present and popular in Hungary. The number of Korean companies operating in Hungary exceeds 38.

In October 2005 Korea’s No. 1 tyre maker company, Hankook Tire signed an agreement with the Hungarian Government to establish a state-of-the-art manufacturing plant with the capacity of 10 M tyres per year in Dunaújváros by investing around 600 M USDs. With this investment the total FDI flow from Korea has exceeded the 1,3 billion USDs by now.

Tourism

According to the recent statistics Hungary is getting to be a favourite tourist destination in our region for the Korean visitors, offering a wide range of tourist attractions, including good wines, excellent cuisine, similar to Korean taste, horse riding, golfing, cultural events, like music festivals, hot thermal spas, historical sites and the beauty of nature.

2006 figures show a remarkable increase in the inbound tourism from Korea to Hungary amounting almost to 60 thousands.

Trade between Hungary and the Republic of Korea 1999-2006

(million USD)

Main commodity groups of trade between Hungary and the Republic of Korea

In 2004-2006 (million USD)