Hungary has rapidly emerged as a favored destination for Chinese electric vehicle makers, with Shenzhen-based BYD recently announcing its decision to establish its European business headquarters and a new research and development center in Budapest.

Other major Chinese EV and battery giants, including NIO and CATL, have either broken ground or expanded their operations in Hungary.

Chinese investments have become an "indispensable engine" of Hungary's economic growth, Hungarian Prime Minister Viktor Orban said on Thursday.

Why is the Central Eastern European country proactively welcoming Chinese investments? And why are Chinese EV giants all eyeing Hungary as a major part of their global strategy? In this episode of China Xplained, we'll travel to Budapest to find out the answers.

Xie Hongzhou and Deng Yingheng reported from Budapest, Hungary.

Reporter: Xie Hongzhou

Script: Xie Hongzhou

Host: Xie Hongzhou

Cameraman: Deng Yingheng

Video: Deng Yingheng

Poster: Deng Yingheng

Editor: Yuan Zixiang, James, Shen He