EditChinese loans fuel Serbia’s growth, but at what cost?
Chinese loans process faster with fewer conditions - such as commitments to human rights and upholding democratic standards
Serbia’s expanding partnership with China has drawn repeated criticism from Brussels and Washington, especially since the Serbian Progressive Party assumed power in 2012.
Concerns center on the opacity of deals, the routine bypassing of public procurement rules, and the potential implications for Serbia’s European Union aspirations.
Overall, Chinese engagement has propelled notable infrastructure growth in Serbia, positioning the country as Beijing’s strongest European partner in the Western Balkans.
From 2000 to 2022, China extended $7.7 billion in grants and predominantly loans, second only to EU assistance – 10.3 billion euros, much of which comprises non-repayable aid.
Political scientist Sonja Stojadinović, an expert on Chinese investments, describes by Radio Free Europe significant “black holes” in these relations. Serbia favors these arrangements, she explains, because they enable quicker and simpler execution – direct negotiations without competitive tenders or full public scrutiny. This practice traces back to a 2009 interstate agreement on economic and technical cooperation in infrastructure, later amended in 2014 to explicitly exempt such projects from public procurement obligations.
Serbia’s largest single creditor is the state-owned Export-Import Bank of China (Exim Bank). As of September 2025, Serbia owed it approximately $2.8 billion – an increase of $45 million from the previous year.
On a global scale, China’s official sector lending and grants totaled nearly $2.2 trillion from 2000 to 2023, according to a comprehensive November 2025 report by AidData. This figure is roughly twice as high as many previous estimates, reflecting newly tracked financing to high-income countries alongside traditional support for developing nations.
Major projects and opaque financing
Chinese firms now lead numerous major infrastructure initiatives without open bidding. These include preparations for Belgrade’s hosting of the international Expo 2027, overseen by state-owned PowerChina under a special law citing urgency; a new bridge over the Sava River in Belgrade; and modernization of the railway from Novi Sad to the Hungarian border, part of the broader Belgrade-Budapest high-speed line.
Much of this development relies on financing from Chinese institutions, chiefly the Export-Import Bank of China. Recent data indicate Serbia’s debt to China has reached approximately €3.7 billion, marking a twelve-fold increase over the past decade and accounting for about 8.4 percent of total external debt. The 2026 budget details repayments on multiple loans covering projects such as the Zemun-Borča bridge, Belgrade’s ring road, railway upgrades, energy facilities like the Kostolac B thermal power plant, border security systems from Nuctech despite U.S. concerns, and the extensive “Clean Serbia” environmental initiative involving sewage and wastewater infrastructure.
Opacity persists, as authorities classify certain debt details as confidential. Yet available figures show Serbia owes more to China’s Exim Bank than to some key European lenders, a trend Stojadinović attributes to streamlined procedures. Chinese loans process faster with fewer conditions, avoiding the political requirements – such as commitments to human rights and democratic standards, imposed by institutions like the European Investment Bank or European Bank for Reconstruction and Development. The only stipulations involve non-interference in China’s policies and support for the “one China” principle, which Belgrade upholds regarding Taiwan.
Though interest rates on Chinese loans run slightly higher—typically 0.5 to 1.2 percentage points above European equivalents – the speed of implementation delivers tangible political benefits. Rapid completion of roads, railways, and other visible works allows the government to claim credit ahead of elections. President Aleksandar Vučić has frequently praised China as a “sincere and iron friend.”
From Beijing’s perspective, Serbia serves as a vital link in the Belt and Road Initiative, facilitating connections from the Chinese-operated port of Piraeus in Greece to Central Europe via upgraded transport corridors. These projects also enable China to export steel and materials while extending its regional influence. Beyond infrastructure, major investments include Zijin Mining’s 2018 acquisition of the RTB Bor complex and Hesteel’s 2016 purchase of the Smederevo steel mill, both accompanied by local concerns over environmental impacts.
The Novi Sad tragedy and broader concerns
Transparency issues came into sharp focus following the November 2024 collapse of a renovated concrete canopy at Novi Sad railway station, claiming 16 lives. The station formed part of the no-tender Chinese-led railway modernisation. Subsequent investigations probed corruption allegations, leading to charges against officials, though progress has been slow. By late 2025, courts dropped charges against several high-profile defendants citing insufficient evidence, while related proceedings continue amid ongoing public demands for accountability.
Vučić stated on 8 January that snap parliamentary elections could be held in October, November, or December 2026, with the exact timing depending on political actors’ willingness to engage in dialogue. He accused the opposition and student protesters of relying on emotional appeals and efforts to demonize his reputation, rather than addressing the government’s achievements.
Sources: Radio Free Europe/Radio Liberty, BGNES, Serbian Monitor
Caption: Chinese President Xi Jinping (2-L) and Serbian President Aleksandar Vucic (3-R) meet in The Great Hall of People, in Beijing, China, 04 September 2025. EPA/Lintao Zhang / POOL
Updated: January 9, 2026 - 11:41
