China to intensify relations with Serbia after President Xi's landmark visit to Belgrade

China to intensify relations with Serbia after President Xi's landmark visit to Belgrade
/ bne IntelliNews
By bne IntelliNews May 8, 2024

Beijing’s diplomatic engagement with Serbia has entered a new phase after Chinese President Xi Jinping's visit to Belgrade on May 7-8. 

Serbia, one of just three nations on Xi's European tour, is poised to deepen ties with Beijing, with a statement from Xi and his Serbian counterpart Aleksandar Vucic talking of a “shared future” for the two countries. 

The visit included the signing of 29 agreements aimed at bolstering legal, regulatory, and economic cooperation between the two nations. 

Serbia is set to become the first European country in years to enter into a free trade agreement with China, slated to take effect on July 1.

Xi's decision to prioritise Serbia in his European tour reflects the country's strategic significance to China. Alongside Hungary, Serbia has been a steadfast supporter of China's Belt and Road Initiative (BRI), positioning itself as a pivotal partner in China's infrastructure agenda across Asia and Europe.

"Serbia became China's first strategic partner in Central and Eastern Europe eight years ago, and it becomes the first European country with which we shall build a community with shared future," said Xi during the visit.

The discussions between the two leaders covered a wide range of topics, including bilateral cooperation, the BRI, China's engagement with Central and Eastern Europe, and international and regional affairs. The two parties reached a broad consensus on these matters, affirming their commitment to deepening mutual cooperation.

"The two sides agreed that Serbia and China foster strong traditional friendship, intensive cooperation in specific areas, fruitful coordination on a multilateral level, and the development of bilateral relations has broad perspectives," said the Serbian presidency in a statement.

Looking ahead, both countries expressed readiness to capitalise on the new phase of development of the BRI, with a focus on expanding cooperation in various sectors, including economy, trade, investment, technology and innovation.

On the political front, the two presidents expressed mutual support for each other's territorial integrity. Specifically, Belgrade made clear that it sees Taiwan as part of China, while Beijing considers Kosovo as part of Serbia. 

Xi's visit took place on the 25th anniversary of the 1999 accidental Nato bombing of the Chinese embassy in Belgrade, an incident that prompted widespread condemnation and an apology from then US president Bill Clinton.

Serbia's alignment with China's Belt and Road Initiative has cemented its position as a key partner for China in Europe. Chinese investments in Serbia have contributed significantly to infrastructure development, with projects spanning mines, factories, roads and bridges. 

China is currently Serbia's second most important economic partner following the EU. China was also the top foreign investor in Serbia in 2023, accounting for €1.37bn of the total €4.5bn. 

Chinese companies have played an important role in Serbia's industrial sector, and are among the country’s top exporters. Specifically, Serbia’s top exporters were dominated by three Chinese-owned companies in 2023: Zijin Mining, Zijin Copper and the HBIS Group.

Other recent collaborations include the establishment of yuan clearing arrangements and the inauguration of a new freight route linking China's Hebei province with Belgrade.

Xi received a warm welcome within Serbia, with crowds gathering to greet him in Belgrade, which was decorated with Chinese flags and posters in honour of the visit. 

The recent Western Balkans Regional Poll by the International Republican Institution (IRI) showed that Serbs see China as their second most important ally after Russia. 

However, concerns have been voiced by Western think-tanks about Chinese influence in Serbia, as well as via Serbia to the EU if and when the Western Balkan country join the bloc. 

A comment by Angelica Vascotto, pan-European fellow at the European Council on Foreign Relations (ECFR), warned in January over Belgrade’s low foreign policy alignment with the EU and questions over its commitment to European values. Failure to mediate and incentivise democratic recovery could allow other countries, including China, to exert influence in Serbia, potentially diverting the country away from its Western neighbours, the analyst said.