Serbia and China signed a €943mn commercial agreement on the modernisation and reconstruction of the Belgrade-Budapest high-speed rail link in the territory of Serbia on July 7 at the summit of China and 16 countries of Central and Eastern Europe that is being held in Sofia, the Serbian government’s statement reads. The agreement concerns the section Novi Sad-Subotica-state border (Kelebija). 

According to Serbian Prime Minister Ana Brnabic, modernisation of the Belgrade-Budapest railway, which is being jointly implemented by Serbia, Hungary and China, is the first cross-border project under 16+1 mechanism and the Chinese Belt and Road Initiative (BRI), and is crucial for infrastructure connectivity.

”Regional infrastructure projects are the most important for Serbia and they will contribute to linking and stimulating the economic progress of the region,” Brnabic said.

The 350km rail link is expected to cut travel time between Budapest and Belgrade from the current eight hours to less than three. The project is part of Beijing’s aim to create a fast lane for importing and exporting products between China and Europe. The Balkans is a key part of this corridor, as it is on the transit route between the Greek port of Piraeus, recently taken over by China’s Cosco, and Central Europe. The route will run 184km across Serbia and 166km across Hungary and passenger trains will travel at 160km per hour.

“The construction of the Belgrade-Budapest high speed railway is the most important and most valuable infrastructure project currently in Serbia and the region. This project is important not only for Serbia, but also for connecting with the region and the EU, as well as connecting Central Europe with the port of Piraeus within the Chinese "One Belt, One Way" initiative. The works have already started on 75km of railway from Belgrade to Novi Sad, where Chinese and Russian companies work. From today we have a contract for the remaining 108.1km, in which works could start in 2019,” Serbia’s Deputy Prime Minister and Minister of Construction, Transport and Infrastructure Zorana Mihajlovic said on July 7 after signing the contract.

Her ministry’s statement reads that works on modernisation of railway from Novi Sad to Subotica will be conducted by consortium of Chinese companies China Railway International and China Communications Construction Co., Ltd. (CCCC).

According to Mihajlovic, the deal signed between Serbian and Chinese companies on July 7 in Sofia should be example for other Chinese projects in the region, and that Serbia confirmed itself as the most important Chinese partner in infrastructure at the latest 16+1 summit.

The further strengthening of bilateral ties with China was also confirmed by the Serbian PM, who said in a speech addressing the participants of the summit that she is especially thankful to Chinese Premier Li Keqiang for personal support within the 16+1 mechanism and BRI initiated by President Xi Jinping, reads the government’s statement.

“Serbia is committed to actively participating in these initiatives that are important for our country and the whole region, and contributed to better integration and strengthening of cooperation,” said the prime minister, adding that, in addition to infrastructure projects, there are significant projects in the fields of energy, economy and culture.

A day earlier Xi invited Serbian President Aleksandar Vucic to attend the Summer Davos gathering in China in September, B92 portal reported.

"The comprehensive strategic partnership between China and Serbia is getting deeper day by day and such relations between us provide a significant opportunity for development. I devote great attention to development of the relations between China and Serbia, and I want to maintain close communication with you with the aim of taking the Sino-Serbian friendship to an even higher level, which implies greater progress and prosperity of our two countries and nations," Xi wrote, according B92.

Jinping visited Serbia in June 2016 which was the first by a Chinese head of state to Serbia in 32 years.

Earlier in April, Vucic announced that he would invite Xi to visit Serbia again this year. Vucic said it would be big thing if the president of China visits a small country like Serbia twice in just a couple of years.

In addition to the Belgrade-Budapest commercial agreement, on July 7 Mihajlovic also signed a memorandum of understanding between the Ministry of Agriculture, Forestry and Water Management of Serbia and the Ministry of Agriculture and Rural Affairs of the People's Republic of China on joint support for the construction of the Industrial Park for Fruits and Vegetables, as well as a memorandum with Chinese company China Road and Bridge Corporation (CRBC) on the reconstruction of the Belgrade-Nis railway line.