Hungary will deepen cooperation with China in the financial sector by jointly establishing more investment funds, said its minister of foreign affairs and trade.

Peter Szijjarto said Hungary's Export-Import Bank will invest 70 million euros ($76.5 million) in the second phase of the China-Central and Eastern Europe Investment Cooperation Fund, which was initiated by the China Export-Import Bank and established in 2013.

The fund's first phase drew investments of $435 million and went into operation in 2014. The Hungarian Export-Import Bank was one of the investors with an input of $30 million, according to the Budapest Business Journal.

The fund's second phase, to be launched this year, will be worth $1 billion, according to Xinhua.

The China-CEE Investment Cooperation Fund targets telecommunications, energy, infrastructure and manufacturing projects in the 16 central and eastern European countries. For example, the fund's first investment was for a stake in a wind power generator in Poland in 2014.

Industrial and Commercial Bank of China, the country's biggest lender, also invested 1 billion euros to establish the Sino-CEE Finance Holding Co Ltd in November last year. The company has initiated an investment fund with an expected size of 10 billion euros, aiming to provide financial support for industrial cooperation between China and CEE countries. Financial institutions and businesses in CEE countries are invited to contribute voluntarily to the investment fund. Hungary is ready to contribute around 200 million euros, according to Szijjarto.

"The Chinese investments in Hungary have exceeded $4 billion, which means that we are the No 1 investment target in Central Europe for China," Szijjarto said, adding that Hungary is also the largest Central European exporter to China.

"And since the Bank of China has its regional headquarters in Budapest where there is a renminbi clearing center, we have the tightest financial cooperation as well," he said on Sunday while attending the Belt and Road Forum for International Cooperation in Beijing.

To further boost Chinese investments in Hungary, Szijjarto met five Chinese companies that have made investments in the Central European country. Executives from technology major Huawei Technologies Co Ltd and electric vehicle maker BYD Co Ltd are among those he met during the forum.

"Europe and the European Union have been struggling with some difficulties, mainly economic and security-related. To overcome the economic difficulties, we need to build more strategic and comprehensive relationships with the most rapidly emerging part of the world, which is definitely China and the surrounding region," Szijjarto said.

The region of Central and Eastern Europe is an underestimated investment destination, according to Jiang Jianqing, head of the Sino-CEE Finance Holding Co Ltd and ICBC's former chairman.

"It's an important emerging market and manages to maintain a good momentum for development while the global economy is recovering slowly," Jiang told China Business News.

The CEE region enjoys low labor costs, diverse industrial structure and great market potential, but lacks financial support to realize the potential for rapid growth, according to Jiang.

xujingxi@chinadaily.com.cn