Belgrade has high hopes of Chinese president’s visit

Belgrade has high hopes of Chinese president’s visit
By Ivana Jovanovic in Belgrade June 17, 2016

Serbian president Tomislav Nikolic said on June 16, the day before the start of Chinese president Xi Jinping’s three-day visit to Serbia, that “everything will blossom” after the visit.

Belgrade aims to improve cooperation with China in order to help the country’s economy to grow, and is seeking Chinese investments in industrial production to boost employment and exports. This hope has grown after the government reached a deal with China’s Hebei Iron and Steel Group (HBIS) on the sale of Zelezara Smederevo, Serbia’s only steel mill. HBIS's acquisition of Zelezara saved some 5,000 jobs, averting a crisis in the region, where Zelezara is the main employer.

An additional link between the two countries is China’s resistance to voting to allow to Kosovo to enter the UN. This is seen as high level friendship in Serbia, which has also been supported on the issue by Russia.

“The Chinese president is coming to Serbia after so many years, it is like when after a long winter finally comes a spring. Everything will blossom after Comrade XI’s visit,” Nikolic told China Radio International on June 16, Tanjug reported.

According to Nikolic, 24 agreements are due to be signed during Xi’s visit to Serbia, which starts on June 17 and ends on June 19. The visit will mark the start of Xi's European tour.

“Those agreements include not only those at national level, but also those focusing on the economy, investment and cultural exchanges. China's investment in us is of great importance, and could solve a variety of problems of our companies from the past, which we could hardly deal with without the Chinese side," Nikolic said.

“China is today, "fortunately for Serbia," in a position to spread its investments” he added.

The president also revealed that presidents of several other countries had asked whether they could visit during Xi's stay in Serbia, so they could arrange a meeting.

He also commented on China’s emergence as a world superpower. "China is a surprise for many, but not for me... By reading a lot about your people I knew that one day you would have to explode [onto the scene], as sports commentators put it," Nikolic told the Chinese radio station, adding that Serbia has big plans regarding cooperation with China.

During his visit to China in late November 2015, Serbia’s Prime Minister Aleksandar Vucic signed several agreements with his Chinese counterpart Li Keqiang, including agreements on beef exports to China and the development of an industrial park by China in Serbia. Serbia has already carried out $1.5bn worth of joint infrastructure projects with China.

Vucic said on June 8 that Xi’s upcoming visit was of historic importance for the strengthening of the two countries' relations, because this is the first visit by the head of the Chinese state to Serbia in more than three decades.

According to First Deputy Prime Minister and Minister of Foreign Affairs Ivica Dacic, Serbia is China’s most reliable partner in Southeast Europe, and perhaps in the whole of Europe.

“Sino-Serbian relations have progressed during years of friendship,” Dacic told Chinese state television CTV, according to a government statement issued on June 16.

“For sixty years, the people of China and Serbia have stood alongside each other, cherishing a mutual fondness and a timeless friendship,” Serbia’s daily Politika quoted Xi on June 16.

Serbia and China trade in 2015 totaled RSD1.56bn (€12.68mn) mainly thanks to China’s exports to Serbia, totaling RSD1.54bn. Serbia’s exports to China in 2015 stood at a modest RSD20.56mn. China’s top export to Serbia was telecoms equipment, while China was mainly importing wood from Serbia.

Bilateral relations between Serbia and China date back to the Yugoslavian days, and the official embassy of Yugoslavia to China was opened on January 2, 1955. Yugoslavian president Joseph Broz-Tito was the first European official to visited China after the death of Mao Zedong in 1976. Back then, China was isolated from the entire world and Tito's visit was seen as China's official "opening" to the rest of the globe.

China has been one of four pillars of Serbia's foreign policy in the post-Yugoslavia era-together with Brussels, Washington and Moscow. The basis of the two countries’ bilateral cooperation is mutual support for their territorial integrity. 

Several major projects are currently underway. China’s Machinery Engineering Corporation (CMEC) is Serbia’s partner on some segments of renovation of the Kostolac mining complex in eastern Serbia. CMEC is working on the second stage of the Kostolac B thermal power project, which includes the construction of a new 350MW plant and, in addition, increasing the capacity of the adjacent Drmno open-pit coal mine. The value of the project is $715mn, of which $608mn will come from a 20-year China Exim Bank loan.

China also supported Serbia in the construction of the Zemun-Borca bridge over the Danube River near Belgrade. The total value of construction was about €260mn, 85% of which was funded with a China Exim Bank loan.

Two sections of the pan-European transport Corridor 11 through Serbia have been carried out by Chinese Shandong Hi-Speed Group (SDHS) in cooperation with local companies and are expected to be completed by June 2017.

The works on the Obrenovac-Ub and Lajkovac-Ljig sections are financed by a China Eximbank loan of $301mn, while Serbia’s government is investing $32.7mn. The Lajkovac-Ljig section is 24km long, while the Obrenovac-Ub section is 26km long. At the end of 2012, Serbia signed a preliminary contract with SDHS for building the two sections, worth approximately $333mn.

China is also sponsoring the high-speed railway connecting Belgrade and Budapest, whose construction is due to begin in the second half of 2016.
The high-speed rail link is expected to cut travel time between Budapest and Belgrade by more than half, from the current eight hours to less than three. This 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.