Europe : Hungary Offering Passports to Woo Hong Kong Investors

Eager to give refuge to capital fleeing Hong Kong, the Hungarian government is marketing Budapest as an ideal spot for a European Chinatown and offering passports in return for big investments.

There has even been discussion of converting Csepel Island, in the Danube River just south of Budapest’s center, into a free-trade zone to replace the British colony that will revert to China in 1997.

IS IT ETHICAL?: The campaign to resettle Hong Kong residents in Hungary raises questions about the ethics of what in effect is a sale of citizenship. But Hungarian authorities say they are only extending the same opportunities offered other foreigners who want to come here and build a new Hungary.

“The working capital they bring into the country will create additional job opportunities, surely a powerful argument in favor of their acceptance by the Hungarian population,” said Bela Torok, deputy chief of the Bureau for Foreign Investments.

Torok’s office last month signed an agreement with Hong Kong Investment (Eastern Europe) Co. Ltd., a private agency based in the Channel Islands that is scouting new locations for Hong Kong residents and their assets before it reverts to China. The agreement guarantees full rights and citizenship for each Hong Kong resettler who invests at least $100,000.

Yet Westerners of Hungarian descent can gain citizenship without “gate money,” and economically motivated immigration from poor regions has been vigorously opposed.

Torok dismissed suggestions that Hungary’s offer is opportunistic.

“We want them to see Hungary as a welcoming market in the center of Europe,” Torok said. “Their money would go for their own housing, or to start up new businesses, not to the government or a state bank.”

INFUSION OF MONEY: Whether concentrated in an ethnically distinct neighborhood or scattered throughout Budapest, Hong Kong businesses would fill voids in consumer and service industries and spur growth of an international community, Torok noted.

A leading daily newspaper, Nepszabadsag, reported in September that a Hong Kong firm calling itself Interbridge sought to buy Csepel Island for the astounding sum of $1.6 trillion. Csepel is now home to an abandoned Soviet military base and some of Hungary’s most dilapidated industries and tenements, although its location in the heart of European shipping and air transport corridors considerably elevates its value on the open market.

Torok confirmed the offer, but he said government officials have dismissed it as “not serious.”

A delegation of 100 Hong Kong businessmen is expected in Budapest early next year to evaluate the costs and opportunities of a future in Hungary.

NEIGHBORS MAKE PITCHES: Efforts to lure Hong Kong businessmen fleeing approaching communism have not been restricted to Hungary. Drawn by the promise of capital and entrepreneurs, Czechoslovakia has also offered to take in 20,000 people from Hong Kong, on condition that each family bring in at least $75,000 cash.

Slovak republic leader Vladimir Meciar told a Prague newspaper that well-heeled Hong Kong refugees could provide a needed boost to Czechoslovakia’s tourist, transport and electronics industries. He expressed concern, however, that the stiff competition the Asian businessmen would pose for Slovaks new to private enterprise could fuel “growing racist tendencies.”

East Germany also sought a share of Hong Kong wealth before the former socialist state was reunified with West Germany. The East Berlin government disclosed in September that it had promised passports to 52 Hong Kong investors willing to bring in billions.

Discussion of German citizenship for 10,000 others capable of putting up nearly $1 million each appears to have subsided in the wake of reunification and negative reaction to the plans.