Core Viewpoint - The energy transition presents significant market opportunities, making Central and Eastern Europe, particularly Hungary, a key destination for Chinese investments in the photovoltaic (PV) industry. Hungary has become the primary destination for Chinese foreign direct investment (FDI) in Europe for two consecutive years starting in 2023, with 31% of China's total investment in Europe in 2024 focused on renewable energy product manufacturing [1]. Group 1: EU and Hungary's PV Industry Policies - The EU's RepowerEU proposal aims to reduce reliance on Russian fossil fuels by banning new contracts for Russian natural gas starting January 1, 2026, and phasing out existing contracts by January 1, 2028. Hungary's foreign minister opposes this proposal, citing the potential for increased costs for local industries and households [2]. - The Net-Zero Industry Act, passed by the EU on May 27, 2024, categorizes PV and seven other technologies as net-zero technologies, requiring that by 2030, over 40% of these technologies be manufactured within the EU to reduce dependency on non-EU countries. This act imposes strict requirements on third-country dependencies, including prohibiting assembly and sourcing of key components from such countries [3]. - Hungary has actively attracted Chinese investments in the PV sector despite the EU's restrictions. Notable projects include a 54 MW PV project by a joint venture of Chinese companies and the establishment of BYD's European headquarters in Budapest, expected to create 1,200 high-value jobs [6][7]. Group 2: Patent Strategies and Compliance for Chinese Enterprises - The global innovation landscape is shifting, with Hungary ranked 36th in the 2025 Global Innovation Index. The average cost of producing electricity from PV has decreased by 12.4% from 2022 to 2023, promoting technological innovation in the sector [9]. - Hungary's "Patent Box" regime offers tax incentives for companies that generate income from patents, reducing corporate tax rates to as low as 4.5%. This system encourages R&D investment in PV technologies and attracts international investment [10]. - Chinese enterprises must establish robust patent compliance strategies when investing in Hungary's PV sector. This includes conducting Freedom to Operate (FTO) analyses to identify potential patent infringement risks before entering the market [15][16].