How much does Serbia owe China?

Traditionally, there has been a “steel” friendship, but now there are also traditional “iron” debts.

From 2000 to 2022, Serbia received $7.7 billion from China, much of it in the form of loans, according to the international organization AidData.

AidData, a research lab that tracks how governments spend money outside their borders, published a comprehensive report on Chinese investments around the world in October this year.

Chinese money in Serbia, analyzed in a separate report, is characterized by the fact that the largest part consists of loans for infrastructure projects, mining, and energy, many of which are given on the condition that the projects use the services or goods of Chinese companies.

The loans, worth millions, have also raised questions about whether Serbia will be able to repay its debts.

“Serbia is not over-indebted to China in terms of its overall debt level, but the rate of debt growth and the issue of its concentration among creditors may be a sign for caution,” economist Nikola Stakić, a professor at Singidunum University, told BBC Serbian.

The largest single creditor is the Chinese state-owned Export-Import Bank of China, to which Serbia owes $2.8 billion according to the latest data for September 2025, which is $45 million more than a year ago.

Globally, China has lent more than $2 trillion worldwide between 2000 and 2023, twice as much as previous estimates, according to a report by AidData.

The money has flowed into both poor and rich countries, with $200 billion coming to America from Chinese state lenders.

A large portion of loans to rich countries has been directed toward key minerals and high-tech industries, raising fears in the West about Chinese dominance in key sectors and prompting some governments to tighten regulations to prevent the inflow of Chinese money.

“For many years, we assumed that virtually all Chinese money was going to developing countries,” Brad Parks, executive director of AidData, told the BBC.

“So we were very surprised to find that hundreds of billions of dollars are actually going to countries like the US, the UK, and Germany, and that this is happening right under our noses.”

In a statement to the BBC in Serbian, Brad Parks explained that Chinese loans to developing countries, a group that includes Serbia, are primarily intended for infrastructure projects and go into the public debt of those countries.

“Chinese state banks are the main financiers of public infrastructure in transport, energy, and industrial development in low- and middle-income countries.”

“In contrast, Chinese lending to high-income countries is less focused on public infrastructure.

“In wealthier EU member states, Chinese state lenders provide corporate loans, commercial bank financing, credit lines for Chinese subsidiaries in Europe, and loans that facilitate Chinese investment abroad,” he says.

Another difference is that investments in Serbia are less regulated than in EU member states.

“This may explain why Serbia has become one of China’s most important economic partners in the Western Balkans.”

“Serbia does not have the same restrictions and is therefore crucial for Chinese companies that want to operate close to, but not within, the EU regulatory space,” Parks says.

Specific characteristicts of Chinese loans

Beijing considers details of its overseas investments—how much money it spends and where—to be a state secret.

In Serbia, loan agreements go through parliament and are publicly available.

However, AidData’s analysis also shows that the Chinese state has directed money to companies operating in Serbia, such as Zijin, the majority owner of the Bor Mining and Smelting Basin.

It was more difficult for us to obtain data and documentation on Chinese grants and loans to Serbian state institutions, Brad Parks told BBC Serbian.

“Over time, Beijing’s activities in providing loans and grants abroad have become increasingly opaque,” Parks explains.

This is also evident, he continues, in the latest report on Chinese money around the world.

With regard to loans, the analysis states that Serbia’s borrowing terms were more favorable than Chinese loans to other countries with similar incomes.

“The financial terms of loan arrangements with Chinese creditors should be viewed as part of a broader mosaic, taking into account the overall strategic relations between the two countries, the structure of projects and Chinese investments, as well as the political framework of mutual respect and friendship,” says Nikola Stakić.

“On the other hand, more favorable borrowing terms do not mean that the overall economic arrangement is more favorable, as other elements must also be taken into account.”

As an example, he cites the level of mining rent payments, which he considers “quite low.”

A mineral rent is money that companies pay to the state for the exploitation of its mineral resources.

In recent years, mining experts have highlighted the low mineral rent in Serbia, but Energy Minister Dubravka Đedović Handanović has said that it is among the highest in the world, Danas reported.

In addition to lower interest rates, there are other features of Chinese loans compared to loans from Europe.

Loans from China are more flexible and accessible to Serbia, and it does not have to go through complicated procedures, project documentation, and everything else that European banks require, says Stakić.

The downside, however, is that there is a lack of transparency, he points out.

How did the Chinese money come about?

Since 2010, the inflow of Chinese funds into Serbia has been increasing.

The peak was in 2019, when Serbia received $1.6 billion, including $1.1 billion in loans for the modernization of the railway from Novi Sad to the Hungarian border.

As part of this project, the Novi Sad railway station was renovated, where in 2024 the canopy collapsed, killing 16 people, which triggered a wave of anti-government protests.

The main contractor for this work was a consortium of Chinese companies, China Railway International (CRIC) and China Communications Construction Company (CCCC), while the subcontractors were both Chinese and domestic.

The companies involved in this project received and carried out the work outside of domestic regulations, based on friendly agreements that are the basis for corruption, according to one of the conclusions of an informal investigative commission that analyzed the reconstruction of the Novi Sad railway station.

However, the “friendly ties” between China and Serbia had already been confirmed much earlier by official documents.

In 2009, Serbia signed an Intergovernmental Agreement on Economic and Technical Cooperation in the Field of Infrastructure with China, which became the basis for subsequent contracts on work on major projects.

This agreement was signed during the reign of the coalition around the Democratic Party (now in opposition) and was later supplemented with annexes during the reign of the Progressive Party.

The second annex, adopted in 2013, for example, stipulates that programs and projects “are not subject to the obligation to publish a public tender for the execution of investment works and the supply of goods and services, unless otherwise specified in the commercial contract.”

This means that companies carrying out the work can be selected directly, which is not normally the case for domestic projects.

The start of China’s million-dollar loans for infrastructure projects was the construction of a bridge connecting two Belgrade neighborhoods, Zemun and Borča, also known as Pupin Bridge (after the great Serbian scientist Mihajlo Pupin).

It was officially opened in December 2014 by the then Chinese and Serbian Prime Ministers Li Keqiang and Aleksandar Vučić.

At the time, the Pupin Bridge was described as the first major Chinese infrastructure project in Europe.

In addition to the Pupin Bridge and the modernization of the railway, Chinese loans were also used to build highways, such as Miloš Veliki, as well as the Kostolac B thermal power plant.

Chinese state money also reached Zijin Copper and Zijin Mining, both owned by Zijin.

A controlling stake in RTB Bor was purchased, and later investments were made in technological improvements to the mine.

A total of approximately $525 million in loans has been granted, which AidData refers to as “potential public debt.”

This means that although the Serbian state is not the recipient of the loan, nor is there any evidence that it has provided state guarantees for these loans, there is a possibility that it could be involved in their repayment, explains Brad Parks.

The mining complex in Bor, which mainly mines gold and copper, contributes three percent to Serbia’s total gross domestic product.

If the joint venture that operates the mine is unable to repay the Chinese debt, the Serbian government could help repay it because the company is important to the national economy, Parks explains.

How much money has China given to Serbia?

When all is said and done, China was Serbia’s second-largest development partner in 2022.

The European Union leads the way with €10.3 billion.

Although the largest part of these ten billion dollars of EU money consists of grants, of which China accounts for €7.7 billion, the total grant aid amounts to €304 million.

AidData also points out that donations in kind are not easy to convert into cash, so their monetary value is “probably underestimated.”

Among the donors, Zijin stands out, having invested in education, health, and sports, as well as $730,000 from the Chinese state for the University of Novi Sad, where the Confucius Institute is located.

Most of the loans, totaling $4.5 billion, are being repaid, while nine loans worth $250 million should have been repaid by now, according to AidData.

The value of loans being repaid may be higher because AidData was unable to find data for some loans, they say.

“The international policy of Chinese creditors in developing countries (especially African and Asian countries) is accompanied by a high level of so-called ‘hidden debt’, i.e. various arrangements that do not appear in official statistics.

“If even a part of this is present in Serbia, it would mean that the official public debt does not fully reflect the actual situation,” says Nikola Stakić.

Brad Parks says that, according to their data, “Serbia’s exposure to hidden sources of public debt is relatively small compared to other countries participating in the Belt and Road Initiative./BBC/