Drifting Away from the U.S. and Integrating with China? 'Eastern opening' and the FDI-realignment of Hungary during the Orbán regime

This article examines how Hungary's foreign direct investment patterns shifted under Viktor Orbán's government between 2010-2023, demonstrating a partial strategic reorientation from Western to Eastern economic integration. Using a theoretical framework of network centrality in global power competition, we analyze how Hungary's FDI realignment reflected broader changes in US-China rivalry. Our empirical analysis of central bank data shows that US FDI stock in Hungary declined from €15.4 billion in 2014 to €8.8 billion in 2022, with the US dropping from second to fourth place among foreign investors. Simultaneously, Chinese FDI stock tripled to €3.5 billion, while South Korean investments increased tenfold. Analysis of strategic partnership agreements reveals Asian companies were significantly overrepresented relative to their FDI share, with 18 out of 94 such agreements involving Asian firms. Project-level data indicates Chinese investments increasingly targeted strategic sectors like electric vehicle manufacturing and battery production. The findings suggest that rather than pursuing genuine economic diversification, Hungary's 'Eastern opening' strategy represented a deliberate pivot away from Western economic integration, driven more by ideological preferences than pure market forces. This case demonstrates how small states can leverage great power competition to pursue autonomous development strategies, even while remaining formally integrated in Western institutional structures.