Serbia: Hub of China's Growing Balkans Presence
Chinese President Xi Jinping's ongoing 6-day state visit to Europe, starting from France on May 6, 204, has drawn attention to China's growing presence in the Balkans, with a particular focus on Serbia. As Serbia has emerged as a key focal point of China's expanding presence in the Balkans, playing a crucial role in China's economic and political outreach to the region.
During President Xi Jinping's visit to Serbia on May 8, 2024, China and EU-candidate Serbia signed a historic agreement to establish a "shared future." This marks Serbia as the first European country in years to enter into a free trade agreement with China, set to come into effect on July 1, 2024.
💻 Table of Contents:
- NATO's Kosovo Campaign: A Turning Point in Sino-Serbian Partnership
- China's Contribution to Serbia's Healthcare System
- China's Economic Footprint: Serbia's Investment Leader
- Political Alignment between China & Serbia
- China’s Policy behind 'Ironclad Friendship'
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| Image Credit: https://denstoredanske.lex.dk, Belt and Road Initiative |
China is supporting Serbia to strengthen economic ties, promote its Belt and Road Initiative (BRI), and exploit divisions within the European Union. With strained relations between China and the EU, and amidst Russia's conflict with Ukraine, Serbia has become a crucial focal point for China's expanding economic and political presence in the region. This strategic interest underscores China's growing focus on Serbia and the broader Balkans.
NATO's Kosovo Campaign: A Turning Point in Sino-Serbian Partnership
China has historically supported Serbia, particularly during the Kosovo War. In 1999, the air campaign carried out by NATO against Yugoslavia during the war in Kosovo deeply offended China and Russia. China and Russia strongly criticized the United States and NATO for conducting the air campaign without the endorsement of a UN Security Council resolution and disregarding objections from China and Russia.
They were concerned that NATO's military intervention in conflicts beyond its area of operation would set a dangerous precedent and potentially target them in the future, given the presence of ethnic and regional conflicts within their own territories. The war in Kosovo served as a catalyst for China, Russia, and Serbia to strengthen their strategic partnership.
Serbian President Aleksandar Vučić has expressed strong support for China's core interests, including issues related to Hong Kong, Taiwan, Xinjiang, and the Belt and Road Initiative (BRI). Serbia continues to be a major supporter of the BRI, further strengthening the bilateral relationship between the two countries.
In anticipation of the 25th anniversary of the United States bombing of the Chinese embassy in Belgrade, Chinese President Xi Jinping emphasized the deep historical ties between China and Serbia. President Xi emphasized the shared history and friendship between the two nations, which he described as "soaked in blood that the two peoples spilled together." President Xi Jinping also remarked, "China will 'never forget' NATO bombing its embassy in Serbia." This historical bond serves as a foundation for mutual cooperation and encourages both countries to make significant progress together.
Image Credit: Wikimedia Commons, Map of Serbia in the Balkans
China's Contribution to Serbia's Healthcare System:
Under President Aleksandar Vučić, Serbia has sought closer cooperation with China. This cooperation includes Chinese assistance in combating the COVID-19 pandemic through the delivery of personal protective equipment (PPE) and CoronaVac vaccine doses, contributing to Serbia leading COVID-19 vaccination rates in Europe.
Chinese companies, including Biotech Company BGI, Mammoth Foundation, Zijin Copper played a significant role in setting up COVID-19 testing facilities and making donations to support Serbia's healthcare system and economy. Ambassador Chen highlighted the active participation of Chinese companies in cooperation between the two countries and expressed confidence in further partnership for economic recovery. By bolstering Serbia's healthcare infrastructure and economy, China aims to deepen its mutual cooperation and advance its broader strategic interests.
China's Economic Footprint: Serbia's Investment Leader
Serbia is crucial to China due to its strategic location and its role in the Belt and Road Initiative (BRI). In recent years, China has become the single-largest investor in Serbia, largely because of the BRI project. This initiative aims to enhance connectivity and trade between Asia and Europe, making Serbia an essential partner for China's economic and geopolitical interests in the region. This upswing in relations, often described as a "steel friendship," has elevated China to a prominent position as one of Serbia's most significant partners.
China has invested significantly in Serbian infrastructure and energy projects, totaling approximately US$10 billion. These investments include projects such as the Budapest–Belgrade railway and the acquisition of the Smederevo steel plant by Chinese Hesteel Group. These initiatives have not only contributed to the development of Serbia's infrastructure but have also helped maintain thousands of jobs for Serbian citizens.
The contemporary relations between Serbia and China began in 2009 with the signing of the Framework Agreement on economic and technological infrastructure cooperation. Initially, the cooperation mainly involved loan agreements from Chinese banks to support Serbia's infrastructural development. However, from 2010 to 2015, Chinese investment in Serbia was relatively limited, amounting to only €189 million compared to the substantial FDI (Foreign Direct Investment) from EU countries.
In 2016, a significant turning point occurred with the acquisition of the Smederevo Steel Mill by the Chinese HeSteel Group. This €42 million transaction, accompanied by promises of additional investments up to €300 million, marked the beginning of a new era in Serbia-China relations. The deal, announced during Chinese leader Xi Jinping's visit to Serbia, symbolized the growing "steel friendship" between the two countries and catalyzed further Chinese FDI in Serbia.
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In 2018, Serbia experienced a significant surge in Chinese investment. The construction of a vehicle tire factory in Zrenjanin by the Chinese Linglong company and the acquisition of a 63 percent share of the Mining and Smelting Combine Bor by the Zijin Mining group were major highlights. These investments, valued at approximately €1 billion each, highlighted China's growing economic influence in Serbia. Zijin Mining further solidified its position in Serbia by acquiring mining rights in the Čukaru Peki region through the purchase of the Nevsun mining company for €1.2 billion, effectively establishing dominance in the region's mining sector.
China and Serbia have announced a new free trade agreement, scheduled to begin on July 1, 2024, strengthening economic and political ties between Belgrade and its largest foreign investor. Known as the "Shared Future" partnership, the comprehensive agreement was revealed during a joint press conference in Belgrade on May 8, 2024, by Serbian President Aleksandar Vučić and Chinese President Xi Jinping. This agreement is set to eliminate tariffs on nearly 95% of Serbia's exports to China over the next five to ten years. The announcement comes at a time of increased tension between Beijing and the EU but underscores the deepening relationship between China and Serbia, extending well beyond economic interests.
Political Alignment between China & Serbia:
While welcoming the Chinese President on May 8, 2024, the Serbian President politicized his own statement, emphasizing that the alliance between China and Serbia is more significant and unbreakable than Serbia's alliance with Europe.
Serbia's alignment with China is driven by shared positions on key geopolitical issues. Particularly, their joint opposition to Kosovo's independence and EU sanctions against Russia strengthens their cooperation. Additionally, both countries share anti-US and anti-NATO sentiments, bringing them closer together and enhancing collaboration on various international platforms.
The signing of numerous agreements and memoranda of understanding during President Xi's visit further solidifies the comprehensive strategic partnership between China and Serbia, raising concerns in Brussels about China's increasing influence in the heart of Europe.
The US and EU are concerned about Russia and China's influence in the Western Balkans. They believe that integrating southern and central European states into the EU and NATO is crucial for stabilizing the region and countering Moscow and Beijing's influence there.
Besides, recent agreements between Serbian pro-government media and Chinese state-owned media companies such as China Media Group and Xinhua News Agency signify a deepening of media cooperation between the two countries. These partnerships aim to enhance information exchange, news coverage, and the promotion of a favorable narrative for China that raises questions about the influence of China's soft power in shaping public opinion in the Balkans.
Furthermore, Serbia and China have cooperated in the weapons trade, with Serbia showcasing the newly delivered Chinese air defense system HQ-22 (FK-3) during a public military drill in April 2022.
China’s Policy behind 'Ironclad Friendship':
Chinese President Xi Jinping's recent visit to Europe, including stops in France, Hungary, and Serbia, signifies Beijing's intention to establish itself as a significant alternative to U.S. and even Russian influence in the region. Serbia, strategically positioned in the heart of the Balkans, has become increasingly vital to China's geopolitical agenda. President Xi's visit to Belgrade underscores the deepening ties between China and Serbia, especially as Serbian President Aleksandar Vucic navigates between Russia and the West amid tensions in Ukraine.
Since 2020, Xi and Vucic have championed an "ironclad friendship" between their nations, paving the way for Serbia to become China's first comprehensive strategic partner in Central and Eastern Europe. China's Belt and Road Initiative (BRI) has been instrumental in fostering infrastructure development in Serbia, with a particular focus on transportation and energy projects.
The 25th anniversary of NATO's bombing of the Chinese Embassy in Belgrade coincides with Xi's visit, amplifying anti-Western sentiment and emphasizing Serbia's desire to maintain balanced relations between the East and the West. Despite criticism of Chinese investment practices and the lack of transparency in some infrastructure projects, Serbia has actively pursued closer ties with China, viewing it as a key economic partner.
Image Credit: getarchive.net, US Army in Kosovo
By fostering a robust economic and diplomatic relationship with Serbia, China aims to challenge U.S. influence in the region and establish a stronger foothold in the heart of Europe, leveraging Serbia's strategic location in the broader Balkan region. This 'ironclad friendship' serves as a key component of China's broader geopolitical strategy, aimed at reshaping the international order and expanding its influence in Europe.
Conclusion:
Serbia has become a central piece in China's presence in the Balkans, driven by historical ties, economic cooperation, strategic importance, and political considerations. Serbia's strategic position in the Western Balkans has made it a key battleground for influence among Western powers, Russia, and China.
Despite its EU membership candidacy status and intent to join the EU, Serbia has received significant Chinese investment since 2013, totaling around €18 billion. China's motive in this geopolitical strategy is to expand its influence in the region and gain access to the European market. However, Serbia's balancing act between the EU, China, and Russia reflects the complex dynamics of power and influence in the Western Balkans.
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