Serbia’s growing ties with China raise eyebrows in the EU

Serbia’s deepening relationship with China, characterized by significant economic, political, and military cooperation, has sparked concerns within the European Union as Belgrade navigates its path toward EU accession.

Serbian President Aleksandar Vučić has repeatedly emphasised the strategic importance for his country of Chinese investments and diplomatic support, referring to the relationship as a “steely friendship.”

Strengthening Serbia-China relations

Vučić met on 24 July with Chinese Ambassador Li Ming and representatives of the Chinese-owned HBIS Group, which operates Serbia’s largest steel plant in Smederevo.

In a social media post, Vučić described the discussions as “warm and friendly,” highlighting the role of Chinese investments in driving Serbia’s economic growth, creating jobs, and improving living standards.

The Smederevo steel plant, employing approximately 5,000 workers, is a cornerstone of Serbia’s industrial sector and a symbol of the deepening economic partnership with China.

Vučić expressed gratitude to Chinese President Xi Jinping for his unwavering support, noting that Serbia-China relations extend beyond economics to include political and diplomatic alignment.

This partnership has grown significantly over the past decade, with China becoming Serbia’s largest non-European investor.

Key projects include rail infrastructure, energy plants, and logistics, often financed through Chinese banks and state-owned enterprises, which offer fewer accountability requirements compared to Western lending.

In October 2023, Serbia and China signed an 850-page bilateral trade agreement, reinforcing their commitment to a “shared future” within the framework of China’s 14+1 initiative with Central and Eastern Europe. Serbia is projected to hold over $7.9 billion in Chinese loans, with 70% of the region’s Chinese investments concentrated in Serbia (Foreign Affairs Committee, 2022).

Unlike EU-funded projects, these investments are not bound by EU standards, raising concerns about environmental, human rights and transparency issues.

Military and security cooperation

Serbia’s ties with China extend to military cooperation, further complicating its EU aspirations. In 2019, Serbia announced plans to purchase Chinese weapons, including battle drones and the FK-3 air defense system. In 2022, six Chinese Air Force Y-20 transport planes reportedly delivered HQ-22 surface-to-air missile systems to Belgrade.

Additionally, Chinese special security forces have conducted drills in the Serbian region of Smederevo. Several Chinese firms operating in Serbia, such as the Poly Group Corporation, face U.S. sanctions for violating the Iran, North Korea, and Syria Nonproliferation Act.

These developments have raised security concerns for both the EU and the United States, particularly given Serbia’s refusal to sanction Russia over its actions in Ukraine.

EU concerns and geopolitical implications

The EU views China as a “partner for cooperation, an economic competitor, and a systemic rival,” a stance complicated by Serbia’s growing alignment with Beijing.

While Serbia officially pursues EU accession as its “ultimate strategic goal,” Vučić’s balancing act between Brussels, Beijing, and Moscow has fueled scepticism in European capitals.

China’s support for Serbia on the Kosovo issue, opposing unilateral Western-backed resolutions, strengthens this partnership but distances Serbia from EU norms and values.

The EU is particularly concerned about Serbia’s reliance on Chinese investments, which often bypass transparency and competition regulations.

The presence of sanctioned Chinese firms and military technology on the EU’s periphery exacerbates these worries, as does Serbia’s role in the 14+1 framework, where it remains a key recipient of Chinese funds despite other Eastern European countries distancing themselves from Beijing.

Xi Jinping’s visit to Serbia in May 2024, alongside Hungary and France, underscored the strategic importance of this relationship amidst heightened EU-China tensions.

Vučić and Xi announced plans to “deepen and elevate” their comprehensive strategic partnership, further aligning Serbia with China’s vision of a “community with a shared future”.

U.S. envoy Gabriel Escobar warned of China’s broader agenda in Europe, urging vigilance among EU partners (Taylor, 2024).

Analysts recommend that European institutions bolster financial and technical support for Serbia, providing competitive alternatives to Chinese investments that align with EU standards for transparency, environmental sustainability, and governance. Additionally, the EU could collaborate with Serbia to develop robust systems for monitoring foreign investments, ensuring adherence to competition and security regulations.

Serbia’s deepening partnership with China, exemplified by economic investments and military cooperation, has strengthened its economic autonomy but raised significant concerns within the EU.

As Belgrade pursues EU accession, its “steely friendship” with China complicates its alignment with European values and strategic priorities. It remains unclear how the EU could help Serbia balance its international partnerships while advancing its integration into the European framework, ensuring stability and coherence in the region.

Caption: Serbian President Aleksandar Vučić met on 24 July with Ambassador of China Li Ming, Instagram/buducnostsrbijeav