The gigantic Chinese lithium battery factory under construction for three years on the edge of Hungary\u2019s second biggest city hasn\u2019t started production yet.<\/p>\n
But it has already contributed to a political earthquake.<\/p>\n
As the biggest Chinese investment in Europe, the $8.5 billion project in the eastern city of Debrecen had been hailed by Hungary\u2019s outgoing prime minister, Viktor Orban, as proof of the economic benefits of his close relations with China<\/a>.<\/p>\n Instead, the factory helped bring about his downfall.<\/p>\n In the April 12 election, Mr. Orban\u2019s Fidesz party lost all its seats in Parliament from Debrecen, long a bastion of rock-solid support for the party, to the upstart Tisza movement, whose leader, Peter Magyar, is set to be sworn in as prime minister on Saturday in Budapest, the capital.<\/p>\n Tisza railed against the risks of toxic waste and the lax enforcement record of environmental regulations by Mr. Orban\u2019s government. That message resonated in a city where many voters strongly opposed the factory, worried about their health, water supply<\/a> and the closure of a railway line that crosses land bought by the Chinese company.<\/p>\n Mr. Magyar has now promised to \u201creview,\u201d but not halt the battery plant, as he tries to balance the demands of his voters for greater scrutiny of potential environmental hazards with his promises to revive Hungary\u2019s sluggish economy.<\/p>\n Mr. Magyar has made clear that his initial priority is to soothe strained relations with the European Union and unblock nearly $20 billion in frozen funding. What to do about the factory, an emblem of Mr. Orban\u2019s close economic and political relations with China, will be an early test of whether he wants to continue an effusive friendship that some see as at odds with the E.U.\u2019s view<\/a> of China as a \u201csystemic rival.\u201d<\/p>\n The battery factory was built by Contemporary Amperex Technology Ltd, or CATL<\/a>, a privately owned Chinese manufacturing giant, and the world\u2019s biggest supplier of batteries for electric cars. It is designed to supply German carmakers, like Mercedes-Benz and B.M.W., whose plants in Hungary are pillars of the economy and depend on Chinese batteries for their electric vehicles.<\/p>\n Aside from the Chinese factory, \u201cthere was no other important campaign issue in Debrecen,\u201d said Zsolt Porcsin, the editor in chief of Debreciner,<\/a> an online news portal that reported regularly on street protests and lawsuits against the factory by angry residents.<\/p>\n By contrast, the campaign by Mr. Orban, who cozied up to Russia despite Hungary\u2019s membership in the European Union, focused on stoking fears of Ukraine. Tisza candidates attacked Mr. Orban\u2019s party as out of touch with voter concerns and too focused on serving the interests of foreign powers like Russia, China and President Trump\u2019s America.<\/p>\n Local hostility to the Chinese battery plant \u201cdefinitely hurt us in the election,\u201d Laszlo Papp, the mayor of Debrecen and a member of Fidesz, said in an interview. \u201cWe did not talk about issues that people were interested in.\u201d<\/p>\n An opinion poll<\/a> of 1,000 residents, taken at the start of the project in late January 2023, showed that a majority thought the battery plant would be harmful.<\/p>\n CATL mostly ignored that public hostility.<\/p>\n The company\u2019s approach was shaped by the way things work in China, said Viktor Eszterhai, a China expert at the Ludovika University of Public Service in Budapest, who has studied Hungary\u2019s emergence as a European hub for battery and electric vehicle manufacturing.<\/p>\n \u201cThey thought: \u2018We agreed with the government. We don\u2019t need to deal with what local people think,\u2019\u201d he said.<\/p>\n CATL, in response to written questions, said it could not comment on \u201cpolitical statements\u201d by the Fidesz mayor or Tisza members of Parliament. It declined to address complaints from residents that the company had ignored their concerns. It said it had tried to \u201cbecome a good neighbor\u201d by supporting a local pediatric clinic, a flower carnival and other events.<\/p>\n CATL still needs final permits before it can start production. Since the election, it has rushed to build bridges with Hungary\u2019s post-Orban political order.<\/p>\n Zsolt Tarkanyi, one of Tisza\u2019s victorious Debrecen candidates and a loud critic of the factory during the campaign, said the company had contacted him and other Tisza legislators soon after Mr. Orban\u2019s defeat.<\/p>\n Last week, senior CATL executives from China flew to Budapest for a hastily arranged meeting with Hungary\u2019s incoming Minister of Economy and Energy, Istvan Kapitany, who has pledged to review state subsidies given to foreign companies.<\/p>\n In the case of CATL, Mr. Orban\u2019s government had promised subsidies that the company says are worth around $350 million. Hungarian media reports have put total state aid, including tax breaks and other favors, at over $900 million. The terms of the original deal in 2022 between CATL and the Hungarian government<\/a> are secret.<\/p>\n Mr. Tarkanyi said in an interview that under Mr. Orban, battery factories already up and running in Hungary, including those of South Korean and Japanese companies, \u201cbasically did whatever they wanted.\u201d<\/p>\n This, he added, \u201cwould come to an end.\u201d<\/p>\n He said battery factories would now be subjected to rigorous inspections, heavy fines or suspended operations, in the case of repeated violations. A South Korean plant already operating for years has been repeatedly fined modest amounts.<\/p>\n Hungary under Mr. Orban became China\u2019s most reliable friend in the European Union, embracing an \u201call-weather comprehensive strategic partnership,\u201d<\/a> a term adopted during a 2024 visit to Budapest by the Chinese leader, Xi Jinping.<\/a><\/p>\n That partnership was a sharp divergence from the E.U.\u2019s increasingly jaundiced view of China because of a torrent of Chinese exports t<\/a>o Europe that threaten European manufacturers and its support for Russia in the war in Ukraine.<\/p>\n Wary of E.U. hostility, Beijing in turn has looked to strongman European leaders like Mr. Orban in Hungary and President Aleksandar Vucic in neighboring Serbia.<\/p>\n