Analysis by Péter Goreczky and Zsolt Trembeczki
The term ‘derisking’ has become a geopolitical buzzword since Ursula von der Leyen first used it to distinguish the EU’s future China-strategy from Washington’s approach. The aim of this policy brief is to review the derisking strategies of major economic powerhouses being most affected by geopolitics-driven fragmentation and to draw conclusions that are relevant for the Hungarian foreign policy. China has a substantial track record of derisking policy and has used the means of limiting relations with the West before the other way around. Being the most comprehensive of all, the U.S. derisking strategy can only partly be seen as natural country-level risk management, as the policy obviously targets China. Recently the EU has become more sensitive to external dependencies, and this had an impact on the perception of any exposure to China as well. Due to corporate business interests, Japan and South Korea prefer a limited disengagement from China. India in the meantime sees Western de-risking strategies as an opportunity to attract investments and boost its own manufacturing sector. The pro-connectivity Hungarian foreign policy has to consider that managing risks arising from foreign economic relations is a legitimate and well-established activity at both corporate and country level, therefore it should advocate to keep derisking within reasonable limits and to avoid extensive decoupling of the Western and the Chinese economy.
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