Rail First, Industry Next? A New Link Between Chongqing and Central and Eastern Europe | Global Vision · China in Depth

Chongqing - As freight trains move between Chongqing and Budapest, a 2026 research project by the Western China International Communication Organization is looking at what the route could carry beyond cargo. 

Titled Industrial Connectivity Between Western China and Central and Eastern Europe: Prospects for Industrial Cooperation and Green Investment, the study examines whether this China-Europe Railway Express route can advance supply chain restructuring, industrial cooperation and green investment amid global supply chain shifts and the green transition.

Péter Szitás, deputy director of research at the Danube Institute and lead expert on the project, noted in his preliminary research that the value of international logistics corridors is no longer limited to transportation efficiency. The policies, green standards and investment environment surrounding these corridors are increasingly shaping the future of industrial cooperation between western China and Central and Eastern Europe.

In this edition of Global Vision | China in Depth, we follow the project in search of answers.

Chongqing products head west, European goods go east

The Chongqing–Budapest China-Europe freight train service was officially launched in November 2025. Operating under a fixed end-to-end timetable, the train departs from Chongqing’s Tuanjiecun Central Station, exits China through Alashankou in Xinjiang, and travels through Kazakhstan, Russia, Belarus, Poland, the Czech Republic and Slovakia before reaching Hungary in about 11 days.

Initially running once every two weeks, the service mainly carries automotive and motorcycle parts, electronic and information technology products, and consumer goods. From Budapest, cargo can be distributed onward to Central and Eastern European markets, including Austria, Slovakia and Serbia.

Unlike conventional freight trains, the service operates with fixed train numbers, routes, schedules and transit times, giving companies a more predictable basis for planning production, transportation and inventory.

Faster and more predictable rail transport is only the first step. A logistics corridor can become genuinely integrated into supply chains only when companies begin adjusting procurement, inventory and production decisions around it. When factories, suppliers, logistics providers and professional service firms start locating and coordinating their operations along the route, the logistics corridor may then evolve into an industrial corridor. This is the next major question facing the Chongqing–Budapest service.

According to Szitás, one important outcome of cooperation between China and Central and Eastern Europe has been the development of railways, ports, highways and logistics hubs. Today, however, the role of this infrastructure is changing.

“The biggest change is that the corridor is evolving from a transportation option into part of companies’ inventory, procurement and production strategies,” Szitás said.

Freight trains loaded with electronic products, communications equipment and home appliances are now departing Chongqing for Europe. After arriving in Budapest, the goods are redistributed to other European markets.

Rail transport is faster than shipping by sea and less expensive than air freight. Its impact therefore extends beyond shorter delivery times. Companies can reorganize their operations around the service: how much European customers are likely to order, how much inventory needs to be prepared in advance, and where components should be sourced.

The trains do not run in only one direction. Return services are also bringing more products from Central and Eastern Europe into China. Szitás noted that Hungarian wine, Polish dairy products and Czech crystal are among the goods now reaching the Chinese market by rail.

Although eastbound and westbound freight volumes remain uneven, the growing variety of return cargo suggests that a route once dominated by Chinese exports is gradually becoming a two-way supply chain connecting China with Central and Eastern Europe.

Beyond the trains, can industrial chains move together?

In June, Szitás visited Chongqing to attend the international symposium on “The Global Significance of Chinese Modernization.” During his stay, he toured Changan Automobile’s intelligent factory and the Chongqing Inland International Logistics Hub Exhibition Center.

One demonstrated the manufacturing capabilities of an inland city; the other showed how that city connects with broader international markets. Together, they gave him a more direct understanding of how Chongqing is using its industrial base and international corridors to expand its opening-up.

Although Hungary is a landlocked country with a relatively small economy, it occupies an important position in Europe’s automotive industry and regional supply chains. Budapest connects eastward with western Chinese cities such as Chongqing, while to the south, the Budapest–Belgrade railway can link Hungary with Greece’s Port of Piraeus, connecting Eurasian land routes with Mediterranean shipping networks.

However, becoming an industrial hub rather than merely a logistics node requires more than a favorable location. It also depends on attracting investment in electric vehicles, batteries, electronics, green technologies and related industries.

Szitás pointed out that when Chinese electric vehicle manufacturers invest in factories in Hungary, these projects do not operate in isolation. Both vehicle and battery production require components, molds, electronic systems and packaging, as well as logistics, equipment maintenance and engineering services. These demands may attract additional suppliers and small and medium-sized enterprises to establish operations nearby.

This extension of the industrial chain is already evident in practice. CATL, for example, is building a battery plant in Debrecen, Hungary, close to production facilities operated by European automakers such as Mercedes-Benz and BMW.

A single battery project can therefore connect upstream material and equipment suppliers, logistics and engineering service providers, and downstream vehicle manufacturers. This illustrates the difference between a logistics corridor and an industrial corridor: the former primarily addresses how goods reach their destination, while the latter emerges when more companies and production processes begin to connect along the route.

Szitás believes this transformation is equally important for Chongqing. The city is a major automotive and electronic information industry base in western China. If the rail service can connect Chongqing manufacturers more closely with Hungary’s automotive industry, European suppliers, and end markets, the relationship will no longer be limited to “manufacturing in Chongqing and selling in Europe.”

It could expand into component supply, joint production, technological collaboration and cross-border market development, eventually forming an industrial network spanning the two regions.

Connecting Western China to Europe’s green industrial chain

Szitás sees the green transition as another important area of potential cooperation.

Europe is expanding its electric vehicle, renewable energy, energy storage and smart grid industries, but it still faces gaps in certain green technologies, manufacturing capacity and supply chain organization. China, meanwhile, has developed relatively complete industrial systems in electric vehicles, power batteries, solar energy and energy storage.

According to Szitás, the most important opportunity for the next stage of cooperation between western China and Central and Eastern Europe is to move beyond isolated projects and develop a broader green industrial ecosystem encompassing electric vehicles, batteries and energy storage, renewable energy, smart grids and the circular economy.

At the same time, the energy consumption, water use and environmental impact of battery projects have already become part of public debate in Hungary. Chinese companies entering the EU market must also adapt to local regulations governing environmental protection, labor, supply chains and industrial activity.

For Central and Eastern European countries, other important questions include how many local jobs a project can create, whether it can bring domestic suppliers into the value chain, and whether technological and engineering capabilities will genuinely remain in the host country.

The sustainability of green investment therefore depends on whether the Chinese and European systems can be better aligned: China brings technology, production capacity and supply chain capabilities, while Europe provides markets, standards, an established industrial base and a distinct social and regulatory environment.

Several questions remain before such alignment can be achieved.

Can the Chongqing–Budapest freight train service generate stable cargo flows in both directions? Can manufacturing projects support the development of local suppliers, engineering service providers, and SMEs? Can China and Europe coordinate green investment requirements and environmental standards at an earlier stage? And if geopolitical conditions, regulatory policies or transportation routes change, can the resulting supply chain continue to operate reliably?

Szitás has not set a predetermined conclusion for the project. He said the next stage of research will combine policy analysis, corporate interviews and field studies in Chongqing to examine the actual operation of logistics hubs, industrial parks and green investment projects.

These questions will also remain a focus of Global Vision | China in Depth: What conditions must an international logistics corridor meet before it can attract industries to cluster along its route—and enable an inland manufacturing city such as Chongqing to build sustainable connections across different markets, regulatory systems and political environments?