Serbia: China’s Pillar in the Balkans

The turbulent global geopolitical realignment that began with Russia’s aggression against Ukraine in February 2022 has been given new impetus in early 2025: reentering the White House less than 100 days into his second term, Donald Trump has brutally overtaken the cornerstones of previous US foreign policy and diplomacy.

And as a result, it has raised an unimaginable number of questions and dilemmas about a model of international order whose future contours are only beginning to emerge, writes the Helsinki Committee for Human Rights in Serbia in an analysis.

In the current planetary turmoil, it is noticeable that Washington has begun to appreciate the multipolarity of the world that has taken shape over the last decade. As Secretary of State Marco Rubio recently stated, the world has been an ‘anomaly’ since the end of the Cold War, when America was a ‘unilateral power’.

Rubio stressed that America would no longer act as a “global government”, adding that it would align its national interests with those of other powers, specifically singling out Russia and China in this context. This certainly hints at a possible sharing of spheres of influence between the three leading hegemons.

In the imperial triangle, Beijing is Washington’s most serious rival for global prestige. That is why Trump is determined to repress China, both (geo)politically and economically: in the first case, with what many consider to be a confused diplomatic and economic opening against Russia, and in the second, with a trade war that he has waged against the whole world, but with absurdly high tariffs, he has singled out China as the main target.

Although it was partly in function of a pre-election promise to end the war on European soil, Trump, ignoring the Europeans who have stood firmly by Ukraine over the last three years, announced a comprehensive reset of relations with Moscow through direct communication with his Russian counterpart, Vladimir Putin. In addition to negotiations on a ceasefire and then a lasting peace between Russia and Ukraine, Trump and Putin also put on the table a number of other topics related to the revitalisation of their relations.

Following a 90-minute phone call between the two Presidents on 18 March, the White House welcomed in a statement the prospect of “exceptional economic agreements”, adding that the two leaders agreed that “it is very important to improve bilateral relations between the United States and Russia in the future”.

Commenting on the same conversation, the Kremlin stressed that the mutual interest in normalising bilateral relations was “expressed in the light of the special responsibility of Russia and the United States to ensure security and stability in the world”.

China, China aside, seems reticent, although this does not mean that developments in Beijing are not being analysed carefully. The impassivity of Chinese President Xi Jinping, who offered his ‘peace paper’ in the first year of the war in Ukraine and afterwards, has certainly affected the possibility of the war ending without Beijing’s participation. And he will do everything to ensure that this does not happen.

Zhongnanhai (the seat of China’s party and state leadership) cannot be satisfied with a rapprochement between America and Russia. When Russia found itself deeply isolated after the violent invasion of Ukraine, particularly in the Western Hemisphere, China, by extending a hand to Moscow, largely undermined that isolation and, in particular, the effect of the economic

Of course, with great personal benefit; In addition, by supplying a big neighbour with necessary products (under the constant suspicion that it is exporting dual-use products and thus providing armed aid to Putin), it has benefited economically and thus put Russia in the position of “little brother”, it has also positioned itself as the leader of a broad swathe of countries in Asia, Africa and South America, the so-called ‘Global South’, which is considerably larger and more powerful than the BRICS platform (China, Russia, India, Brazil, South Africa), where it also plays a leading role.

China’s exclusion from the main geopolitical stage follows the Kissinger diplomatic doctrine: driving a wedge into a potential coalition and alliance of Far Eastern competitors and rivals.

The next move is calculated to economically weaken the ‘Chinese dragon’, which holds a key position in the global supply chain (‘the world’s number one factory’). Thus, in the current trade war, China has been hit the hardest: in a few days at the beginning of April, duties on imported Chinese goods rose from 54% to an absurd 245%! Beijing retaliated with 124% tariffs on US products and there is no end in sight to the “game”.

As Nick Maro, Chief Asia Economist at the Economist Intelligence Unit, noted, this is the “hardest divide” ever between two deeply intertwined economies (trade between America and China amounted to about 700 billion dollars a year, of which Chinese exports to America amounted to about 500 billion and US exports to China to 200 billion), adding that it is difficult to assess the expected shocks “not only for the Chinese economy, but also for the entire global trade landscape”.

Although Trump considers China to be the most serious and dangerous planetary challenger, there is also a certain ambivalence in the first gestures of his administration. For example, he invited Chinese leader Xi Jinping (whom he still calls “my friend”) to his presidential inauguration, the first such occasion in the history of Sino-US relations. Xi responded to the invitation with a high-level diplomatic delegation led by the Vice President of the People’s Republic of China.

The potentially most dangerous point of contention – Taiwan – which had the most explosive charge during the previous Democratic administration, is also not being talked about much at the moment.

As political scientist Dejan Jović notes, if a new order is achieved (the distribution of spheres of influence among world powers), “it is possible that the US will become much more passive in its support for Taiwan…”

When it comes to Serbia and its confused foreign policy – officially with a strategic commitment to European Union (EU) membership, but practically supported by three other pillars, Moscow, Washington and Beijing, it is certain that relations with China are a high priority.

Traditionally good relations with a Far Eastern partner, nurtured by SFR Yugoslavia, then FR Yugoslavia, including after the removal of Milosevic, but also Serbia (support on the “four pillars” was forged by Boris Tadic when he was still President of the Republic), have been brought to the level of a “community for a common future” (whatever that means) by the regime of Aleksandar Vučić.

When Chinese President Xi Jinping visited Belgrade in May 2024, the two presidents signed a joint declaration marking “the transition from strategic bilateral relations to a community of shared future in the new era” and representing “the highest form of cooperation between the two countries”.

As an investor, China has made significant inroads in the last decade in the construction of major infrastructure and energy projects, in the ownership of strategic mining and industrial facilities, and has become Serbia’s second largest foreign trade partner. All this is linked by the oft-used phrase of mutual “iron friendship”.

However, the extensive business dealings with China are “covered” by inter-state agreements which, as President Vucic admits, are subject to absolute secrecy. Almost boundless corruption often hides behind secrecy.

The lack of transparency in the agreements signed makes it difficult to prove, but its ‘trace’ can be traced in the huge underestimates from start to finish of works on certain projects and their unreliable execution.

Thus it happened that the canopy of the reconstructed Novi Sad railway station fell down, a few months after it was officially opened. Sixteen people died in this tragedy, which led to the largest ever student and civic protests in Serbia (one of the key slogans is “corruption kills”). The contractors for the renovation of the railway station, as well as for the entire stretch of railway from Belgrade to the Hungarian border, are two Chinese companies, China Railway International COLtd. and China Communication Company Ltd.

In the 13 indictments filed so far, not a single name is linked to Chinese contractors. The silence with which the Chinese side has reacted to the New Saddam tragedy also “resonates” in public: there are signs of sympathy and empathy for the victims’ families, for the city and, ultimately, for the country, where it is enjoying more than just friendly hospitality.

China and America

The competition for planetary prestige between the world’s two leading powers is sure to continue. However, it will be accompanied by some contradictions that did not exist during the previous Washington administration: some may be linked to the business interests of Trump’s closest associate, Elon Musk (Tesla electric cars), while others could arise with regard to Taiwan.

The official Chinese news agency Xinhua described the escalation of the trade war – the US has increased tariffs, initially by 35 per cent, to 245 per cent – as “self-destructive violence”.

Beijing has imposed counter-measures – import tariffs on US products have risen to 124, and the Ministry of Foreign Trade is calling on the US to immediately lift these unilateral measures and resolve trade disputes …

In addition, Beijing has vetoed the export of seven rare earth minerals essential for the production of chips, announcing that it is prepared to “go to the end wherever the US wants”.

According to some experts on international relations and interdependence, Trump’s moves have put America at great risk. “Trump’s embrace of autarky represents an unprecedented act of self-harm, a move similar to the one the British made with Brexit, only raised to a global level,” argues Ian Bremer, President of Euroasia and GZERO Media.

Other observers point out that Chinese President Xi Jinping, the most powerful Chinese leader in decades, has long been aware that China faces a protracted struggle with America: “China has had to prepare for this and has prepared quite extensively,” says Jakob Gunther, a leading economic analyst at the Berlin-based think-tank MERICS. This is also a point made by journalist Zorana Bakovic, one of the best experts on China and Asian countries. As he says, President Xi was preparing for Trump’s first term, but also during his successor’s four-year stay in the White House; and Biden, by continuing sanctions, also continued the policy of containing China.

In the context of their trade relations and the imposition of huge tariffs, the US President presented tariffs as a tool to combat the ‘scourge of fentanyl’. This is a drug that has been “ravaging” the black market in the US in recent years, with serious consequences for the lives and health of users.

His previous administration claimed that Mexican cartels were processing fentanyl using materials from Chinese chemical suppliers and that Canada was a transit point in this trade route. An important area in which China and America are confronting and competing is new technologies. China’s rapid progress in this area is a concern for Washington, which has led to the imposition of restrictive measures. Specifically, it is a ban on the export of the latest Nvidia chips, while at the same time the American tech giants are restricting Chinese access to the latest technologies.

However, it seems that restrictions are no longer an option. China already finds itself in a situation where it is facing American competition with its own development of high technologies and artificial intelligence. For example, in January, DipSik, a Chinese artificial intelligence (AI) development company, launched a new big-language AI model that can recognise and generate text. As journalist Borislav Korkodelovic, an expert on China and Asian countries, notes, Chinese innovation is “changing the global technology and investment landscape”.

Korkordelović recalls that this is why Donald Trump “called for the awakening” of the “brain” of American technological development, Silicon Valley.

The Sino-US clash over Taiwan

The policy of the newly sworn-in Washington administration towards Taiwan can only be speculated, as the subject has not yet been put on the agenda.

The island, which China considers an inalienable part of its territory and which America officially recognises (as formulated by the “one China” position), was high on the agenda of Biden’s diplomatic team and the cause of frequent exchanges of high tones and gestures (military exercises in this part of the South China Sea) on both sides. Russia’s aggression against Ukraine has sparked speculation among commentators and analysts that Chinese leader Xi Jinping will try to do the same with Taiwan.

Xi Jinping has “disappointed” them in this sense, but this does not mean that the annexation of Taiwan to China is not part of the dream and ambition of his statesmanship (the Chinese Constitution, incidentally, does not rule out military intervention to this end).

As a historical reminder, the “one country, two systems” formula was coined by Chinese statesman Deng Xiaoping in the 1980s. He was referring primarily to Taiwan, but in addition to Taiwan, this would also apply to Hong Kong (then under British rule) and Macao (then under Portuguese rule). Under this concept, the territories that returned to Chinese sovereignty would enjoy a special status for 50 years, retaining the previous social and political system and full autonomy. At the end of the 1990s, the UK, accepting the promises it had made, returned Hong Kong to China (which had only been a “leasehold” for 99 years), and Portugal returned the Far Eastern “gambling region” – Macao.

As is well known, the current head of the Chinese Party and State has not had the patience to wait five decades, having abolished important elements of Hong Kong’s autonomy a few years ago, despite many protests from Hong Kong citizens and Western countries.

As far as Taiwan is concerned, although China constantly reminds us that the island is its “inalienable territory”, it has been patient.21 Is this patience coming to an end?

Objectively speaking, the passage of time is taking its toll and Taiwan as an independent entity is moving further and further away from China. Although many Taiwanese, especially those who oppose the current government, continue to claim that “we are all Chinese”, there are a growing number who insist on an indigenous identity.

The political system (multi-party, parliamentary democracy) is also completely different, as is the way of life of ordinary people: Taiwan and the mainland are not so geographically distant that Taiwanese would not notice the difference.

These are arguments that test patience, one of China’s “national characteristics”. Generally speaking, China’s reunification is set as a strategic goal for the 100th anniversary of the founding of the People’s Republic (2049).

Does this date seem too distant to the current Chinese leadership, which is supported by growing nationalism in all social strata (largely caused by the leadership of the Party and the State)?

One of China’s leading intellectuals, Zhang Weiwei, Professor of International Relations and Director of the China Institute at Fudan University in Shanghai, argues that “China has been patient enough on the Taiwan issue”.

In an interview with Politika, Professor Zhang said that “Taiwan’s reunification with China is a historic task that we must achieve”. As he says: “The People’s Republic of China was founded in 1949. More than 70 years have passed. The conditions are ripe.”

Perhaps President Xi, who believes in his historic mission, thinks so too. In this context, when he listened to them, he ‘heard’ Donald Trump’s aggressive claims to the territories of other countries, Greenland in particular. Greenland is, in every sense, a ‘foreign territory’, which Taiwan, with its specific international position, ‘is and is not’.

The sensitivity of Taiwan’s position also stems from the fact that over the decades it has become one of America’s most important strategic security points in this part of the world (“the largest US aircraft carrier in the Pacific”).

In this sense, its importance can only grow, given that the US is increasingly turning geostrategically and politically towards Asia, the Pacific and the Far East.

In the same interview, Professor Zhang also said, “The return of Taiwan is a historic mission … and it is a job that has to be done, whether the US agrees to it or whether the US intervenes militarily. We are building our strategy and our plan. It may be very peaceful, it may be less peaceful, but it will be achieved.”

China, America and Serbia

The geopolitical and geostrategic realignment imposed by Trump’s arbitrary moves is also a challenge for Serbia’s “wandering” foreign policy. Among other things, because it has been “settled” between two pillars (out of a total of four), with both of them leaning towards only one of them.

In recent years, the growing rivalry between China and America has put many countries in a position of choice – “either China or America”.

A hundred or so countries have refused, but in the new circumstances this will be increasingly difficult. Among these 100 countries, Serbia has been identified by Bloomberg as “the only European country in the informal group of ‘new neutrals’” in 2024.

Serbia’s alignment on the US-China seesaw is complicated by economic interests – China and the US are the second and third most invested countries in the EU – and by President Aleksandar Vučić’s good personal relations with Xi Jinping and, he hopes, Donald Trump.

For the moment, the only certainty is that Serbia is in a newly formed informal group of countries, the “75 interested negotiators”, who are lining up in Washington to succeed in lowering increased tariffs in bilateral negotiations. The fact that Belgrade was “cut off” by an enormously high tariff of 37% was a real shock, both for companies exporting to America, including China’s Linglong (bus and car tyres are the biggest export item in Serbian-American trade), and for the government. As President Vucic said on this occasion, “this is unusual for several reasons”. He added: “I cannot guarantee, but I am confident and I believe … that we will resolve this issue.”

However, lawyer Vojin Biljic, president of the American Law Centre, argues that there is nothing unusual about this and that it is more likely that the message was sent because of trade and cooperation with China and Russia. “Serbia should not ignore the fact that it has most of its major deals with China…” he said.

Recall that from the fall of the Berlin Wall until 1999, Beijing’s relationship with Belgrade was in line with Washington’s policy. The NATO intervention against the then Federal Republic of Yugoslavia, during which the Chinese embassy in Belgrade was bombed, changed everything: since then, and especially since Kosovo’s declaration of independence in 2008, China and the US have been increasingly confronted in the Western Balkans: geostrategically, politically, values-wise and economically.

In addition to their competing presences in the countries of the region, particularly when it comes to Serbia, the fundamental differences between China and the US are also reflected in the voting in the United Nations (UN) Security Council, where both countries have veto power.

In this global forum, China (together with Russia) ‘protects’ the territorial integrity and sovereignty of Serbia, including Kosovo.

In return, Serbia has consistently opposed any criticism of the Chinese regime in the UN and other international organisations and fora, whether it be on Hong Kong, Tibet, the position of the Uighurs and Xinjiang, or Taiwan: “In a situation of considerable pressure on the Republic of Serbia, our country is the only one in the whole of Europe which has never joined declarations criticising or attacking China on any issue . . we have always been on China’s side and we will remain so”, President Aleksandar Vucic said during a visit to Beijing in 2023.

China and Serbia: Friendship and patronage “without borders”

Over the past decade, China has made significant inroads into the Serbian economy. First through the 16+1 platform, with which Beijing launched its economic conquest of the European continent (the members of this group were former Eastern Bloc countries, including all the successor states of Yugoslavia), and then through the even more ambitious “Belt and Road” mega-project.

Serbia was the first European country to embrace and promote this initiative, opening up a wide space for Chinese investors in the industrial and infrastructure sectors: from the Smederevo ironworks (now HIBIS), the Bor smelter (Ziđin), with the additional acquisition of the Čukaru Peki gold mine near Majdanpek, the construction of the Linglong tyre factory in Zrenjanin, the construction of motorways in central Serbia, the construction of a high-speed railway from Belgrade to the Hungarian border and onwards to Budapest, cooperation in the energy sector (Kostolac B thermal power plant). ..

In other words, as he puts it, “China has become the largest source of foreign direct investment in Serbia.” According to official statistics, the value of Chinese capital in Serbia is $22 billion: $13 billion of this is direct investment and $9 billion is loans, which brings Serbia dangerously close to a “debt trap”.

The “golden olive branch” of development, with which China is successfully spreading its imperial influence across continents, while propagating an authoritarian system of governance (which is also close to the President of Serbia) and anti-Western illiberal values, is very attractive for Serbia. Firstly, because Chinese funds are easily accessible, sometimes at lower interest rates than on other capital markets, and especially because Chinese investments are easier to raise. For example, while investments from European countries must be transparent, verifiable and in line with European standards and norms, Chinese investments are shrouded in a veil of state secrecy. As some analysts note, this is “very favourable for political leaders and managers of large companies and much less profitable for the country and its citizens”.

China enjoys a special status in Serbia as a powerful country always ready to back its alliance and friendship with Serbia with hard currency. Apart from the fact that this is true when it comes to secret inter-state agreements (which Serbia is also prone to), the patronising attitude towards Chinese partners is also recognised in many other segments: “The Chinese negotiate by just telling the price. They have a blackmailing attitude”, one of the players (who did not want to be named) in the negotiations with Far Eastern partners told NIN. According to him, if they do agree on a concession, it is almost negligible.

On their “estates” in Serbia, from Smederevo to Bor and Zrenjanin (Linglong), the Chinese do not respect domestic legislation, be it environmental standards (mining of the Starica mountain near Majdanpek, massive air pollution in Bor and Smederevo), workers’ rights of employees, usurpation of land designated for other purposes by domestic regulations, denial of access to the media and other unwanted visitors, etc.

Free Trade Agreement

As of June 2024, a free trade agreement between the two countries is in force. It was signed in Beijing a year earlier and is considered by some domestic economists and experts to be controversial in many respects. Namely, the huge difference in economic power between the two partners makes it practically advantageous for only one of them.

China, with its abundant exports of goods of various profiles, has been successfully positioning itself on the Serbian market for decades. The free trade agreement should enable domestic producers, especially of agricultural and livestock products (apples, raspberries, wine, honey, pig’s and chicken’s feet), to export “boom” on the huge Chinese market.

It sounds nice, but Serbia’s production potential cannot significantly satisfy Chinese appetites: this is convincingly demonstrated by agro-economic analyst Milan Prostren, who reminds us that domestic agriculture has many “critical points”: “There was talk that we would export pig heads to China, then legs, then tails and ears, but we don’t have any pigs at all anymore.”

Moreover, transport to the Far East market, thousands of kilometres away, is a problem, so the impact of duty-free on agricultural exports is very small.

However, according to Li Ming, the Chinese ambassador in Belgrade, from 2013 to 2024, Serbian exports to China increased from $22 million to $1.9 billion, or eighty-five times! He adds that “products from Serbia are becoming popular among Chinese consumers”.

What Ambassador Li does not mention is the huge benefit for Chinese companies operating in Serbia, from where they export duty-free to China: the biggest exporter is in fact Ziđin from Bor: “… Serbia, read Ziđin, supplied $913.5 million worth of unrefined copper ore and concentrate to China last year, and another $132.9 million worth of refined copper,” claims economic journalist Milan Ćulibrk.

According to him, out of every $100 of “our” exports to China, $90 went to Zijin and its subsidiaries.

Another problem is that Ziđin exports (via the port of Piraeus) unrefined ore from Bor, which means that Serbia has no insight into how much copper and gold has gone with it: “For six years we have negotiated and agreed that they will export our copper and gold in raw materials with no restrictions, not in the finished product, and we will export them apples and pet food,” wrote Bor activist Irena Živković on the X network.

The case of Novi Sad railway station

For almost a decade, China has been investing deliberately in a transport corridor linking the Greek port of Piraeus to the Hungarian capital via North Macedonia and Serbia: a direction in which the strategic interest of the “Chinese dragon” is winding its way towards the European Union. The port of Piraeus has been leased for 99 years by the Chinese economic giant Cosco, which has made the Balkan road and rail network one of China’s investment priorities.

The line also carries the high-speed railway from Belgrade to Budapest. The main contractors are the Chinese companies CRICO and CCC, mentioned above, and the extensive works also included the reconstruction of Novi Sad railway station. This is why, according to foreign policy commentator and editor Željko Pantelić, apart from the human tragedy (the collapse of the canopy on 1 November 2024, killing 16 people), it also has “major geopolitical implications”.

The legal proceedings that have been ongoing since then involve 13 people, none of whom are from the two Chinese companies. In a recently published report, an expert group from the University of Belgrade draws attention to Article 84 of the trade contract, according to which “responsibility for injury, illness or death of any person shall be borne by the contractor (i.e. the Chinese companies China Railway International CO, Ltd and China Communications Construction Company LTD or the financier (the Government of the Republic of Serbia) and the investor (the AD Infrastrukture Railways), stating that ”the responsibility shall lie primarily with the contractor”.

As Željko Pantelić reminds us, the fall of the Novi Sad canopy “is very thorny for the authorities in Belgrade, because any serious investigation would lead to Chinese investors. In his words, the reaction of the authorities in Belgrade so far “is the product of an impossible mission: to meet the demands of the students and not to anger Beijing”.

The university’s expert team goes on to say that, after a detailed analysis, it concluded that “the available and missing documentation raises suspicions that the demolition of the canopy may have been the result of systemic irregularities and corrupt mechanisms in the planning, contracting and execution of the works”/The Geopost/