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This contribution is part of the book “The Dragon at the Gates of Europe: Chinese presence in the Balkans and Central-Eastern Europe” (more info here) and has been selected for open access publication on Blue Europe website for a wider reach. Citation:

Trivić, Slobodan, The Belt and Road Initiative and its Impact on Serbia: A Delicate Balance, in: Andrea Bogoni and Brian F. G. Fabrègue, eds., The Dragon at the Gates of Europe: Chinese Presence in the Balkans and Central-Eastern Europe, Blue Europe, Dec 2023: pp. 213-246. ISBN: 979-8989739806.


The People’s Republic of China in 2013 unveiled its worldwide infrastructure development initiative known under Belt and Road Initiative (hereinafter: BRI). The Republic of Serbia, situated at the intersection of vital Southeastern European transportation lines, is among the strategic partners of China in the implementation of infrastructure development activities on the European continent. The BRI has significantly increased expenditures on Serbia’s infrastructure, including the building of roads, railroads, and bridges. Chinese businesses have established a significant presence in the Serbian economy since the launch of BRI. Bilateral trade and the volume of investments between China and Serbia have increased considerably throughout these years. The BRI has drawn criticism, though, as it has brought up issues with environmental effects and the sustainability of debt financing the development of such projects, particularly in the Western Balkans region. Serbia, being a candidate country in the European Union accession process and a focal point for BRI activities, is in the spotlight of balancing between the scrutiny of European Union accession process and the utilization for Chinese capital and infrastructure.

1. Introduction

People’s Republic of China launched the BRI in 2013 as its global plan for developing infrastructure, initially known as the One Belt One Road Initiative, inspired by ancient trade route the Silk Road that linked China to the Mediterranean. BRI was created to encourage economic integration and connection throughout Asia, Europe, and Africa through land and maritime networks, partnering 138 countries worldwide.[1] Serbia is one of the BRI’s main partners and is a focal point for China’s BRI objectives in the Western Balkans, due to its location at the junction of important transportation corridors in Europe.[2]

The BRI has the potential to change regional dynamics, foster economic growth, and advance collaboration amongst participating countries. By funding infrastructure projects like roads, railroads, bridges, and ports, the BRI has the potential to surge connectivity, encourage commerce, and provide new opportunities for economic growth. In a Western Balkans landscape, China has seized the opportunity to establish a strong foothold in Serbia, gaining economic leverage and significant influence.[3] Through the BRI, the infrastructure sector in Serbia has experienced a massive influx of Chinese investments in the past decade, which altered its economic landscape significantly. In this respect, the article examines the crucial infrastructure projects initiated under the BRI in Serbia, highlighting their transformative effects. Noteworthy projects include the Pupin’s Bridge, the Miloš Veliki highway sections, and the Kostolac Thermal Power Plant. The article also delves into the energy sector, where China’s involvement in Serbia’s efforts to diversify its energy sources has reshaped the country’s energy landscape.

This article also scrutinizes the diplomatic ties between China and Serbia, tracing the trajectory of their political relationship from a strategic partnership to a comprehensive strategic partnership. It emphasizes the significance of high-level visits and agreements that have strengthened their ties, contributing to Serbia’s active participation in regional projects. Despite this, the BRI has been drawing serious criticism. Critics have pointed out the environmental impacts of the infrastructure projects as well as the sustainability of the debt that participating countries have accumulated through financing robust infrastructure projects under the BRI. Critics mostly agree that the BRI, particularly in the Western Balkan nations, might lead to a debt trap and imperil economic stability and national sovereignty.[4] Others express concern about the effects on the environment, particularly in fragile ecosystems and areas.[5] A dedicated section spotlights these intricacies, exploring concerns about environmental impacts, debt sustainability, and the influence of Chinese investments on Serbia’s EU integration journey.

This article aims to shed light on the complex dimensions of the BRI’s impact on Serbia. By examining the economic and diplomatic relations between China and Serbia, as well as the significance of the BRI for bilateral cooperation, it should provide a structured understanding of the benefits and challenges it poses from the Serbia perspective. Furthermore, the article examines the criticisms and potential obstacles facing China-Serbia relationship under the BRI and Serbia’s EU accession process, ensuring a balanced assessment of the initiative’s implications.

2. China-Serbia Economic Relations

In recent years, China-Serbia economic relations have rapidly been developing, marked by growing Chinese investments in various sectors in Serbia. The realization of BRI-related infrastructure projects and foreign direct investments (hereinafter: FDI) spearheaded this economic partnership, bringing forth substantial infrastructural changes and impacting Serbia’s economy in profound ways.

Overview of Chinese Investments in Serbia

In 2022, the People’s Republic of China emerged as the most significant trade partner of Serbia in Asia, with trade volume amounting to 6.15 billion USD. The Republic of Serbia exported goods worth 1.17 billion dollars to China, while imports from China reached 4.98 billion USD, marking a historical high in exports to China for Serbia.[6] The top five Chinese goods are 1) broadcasting equipment, 2) vaccines, blood, antisera, toxins, and cultures, 3) iron structures, 4) computers, and 5) rubber-working machinery, whereas Serbia’s top five exports are: 1) copper ore, 2) refined copper, 3) sawn wood, 4) ferroalloys, and 5) rough wood.[7] Serbia’s trade deficit with China in 2022 amounts to approx. USD 3.81 billion.

China is currently among the top FDI partners for the Serbian economy, the third largest by number of investment projects and fifth by their value.[8] Chinese FDIs in Serbia have steadily grown over the period from 2010 to 2022, peaking in 2022 with around 1.4 billion EUR of investments (see Graph 1). The total FDIs from China during this entire period amounted to approximately 4.19 billion EUR. The initial years, from 2010 to 2012, saw relatively modest investments from China, ranging from 1.3 million EUR to 18.9 million EUR. Correlating to the BRI launch, the following years witnessed a significant surge in Chinese FDI. The year 2016 marked a milestone with investments soaring to 219.4 million EUR, and in the following years remained robust, ranging from 179.2 million EUR to 689.9 million EUR. Despite the challenges posed by the COVID-19 pandemic, Chinese investments in Serbia remained resilient in 2020, totaling 528.5 million EUR. The year 2021 witnessed a further increase, with FDIs reaching 630.4 million EUR. The most recent data available for 2022 shows a significant surge, reaching a record 1.4 billion EUR.

Chinese FDI in Serbia

Source: Development Agency of Serbia

These investments have contributed to various sectors, including infrastructure, manufacturing, technology, and energy, contributing to the economic development, and strengthening the bilateral relations between China and Serbia. The steady growth of Chinese FDIs reflects the increasing attractiveness of the Serbian market to Chinese investors and the deepening economic cooperation between the two countries.

The data in Table 1 shows the Chinese investment projects in Serbia from 2016 to June 2022, covering sectors of metallurgy, textiles, and the automotive industry. Chinese investments in Serbia have undoubtedly played an important role in enhancing the country’s economic prospects and industrial capacity, amounting to a total of approx. USD 4.1 billion.

Table 1: Chinese investment projects in Serbia (2016 – June 2022)[9]

YearProjectChinese partner/ investorChinese company ownershipType of the projectStatusSectorValue in USD
2016Hesteel, SmederevoHBiS Group iron and SteelState companyAcquisitionMetallurgyFinished330 million[a]
2016Eurofiber yarn, ĆuprijaChina Prosperity industrial CorporationPrivate CompanyFDITextileFinished1.21 million
2017Mei Ta, ObrenovacMei TaPrivate CompanyJoint venture with the Serbian GovernmentAuto industryFinished124 million
2018Zijin Mining, BorZijin MiningState companyAcquisitionMetallurgyFinished1,722.8 million
2019Shandong Linglong tire company, ZrenjaninShandong LinglongPrivate CompanyFDIAuto industryIn progress896 million
2019Yanfeng, internal interiors for cars, KragujevacYanfeng SeatingPrivate CompanyFDIAuto industryFinished44.8 million
2020Xingyu, lights for cars, Niš  Changzhou Xingyu Automotive Lighting SystemsPrivate CompanyFDIAuto industry  Finished68.4 million
2021Yanfeng, car security systems KragujevacYanfeng SeatingPrivate CompanyFDIAuto industryIn progress21.2 million
2021/22Minth, Loznica and ŠabacMinthPrivate CompanyFDIAuto industryFinished100 million

[a] The Sale and Purchase Agreement of Certain Assets of Zelezara Smederevo dated April 18, 2016 stipulates a sale price of EUR 46 million. See: Ministry of Economy, Notice on the concluded contract on the purchase and sale of Železara Smederevo DOO, Smederevo. “Public Invitations, Notification of the Concluded Agreement on the Purchase and Sale of Železara Smederevo DOO, Smederevo,” April 21, 2016.

The presence of Chinese companies in Serbia will continue to increase. During the Business Forum 2023 in Belgrade, 15 Chinese state-owned enterprises signed 13 trade agreements worth approximately USD 510 million with Serbian companies in the agricultural and food sector, chemical industry, wood processing, services, and other areas.[11]

Infastructure Projects Under the Belt and Road Initiative in Serbia

The two countries have established strong project cooperation, notably in the infrastructure and energy sectors, demonstrated by key projects like Pupin’s Bridge, the Miloš Veliki highway sections, and the reconstruction of the Kostolac Thermal Power Plant. The Zijin Company and the Hesteel Company stand out as the largest Chinese investors in Serbia (also the largest exporters), having invested in RTB Bor and acquired the Ironworks Smederevo, respectively. Furthermore, notable Chinese investments include the construction of a tire factory in Zrenjanin by Shandong Linglong Company and the opening of Yanfeng Automotive Interiors factory in Kragujevac for car interior components production. In addition, the trilateral project for modernizing and reconstructing the Belgrade-Budapest railway track, involving Serbia, China, and Hungary, is currently underway under the framework of cooperation between China and Central and Eastern European countries.[12] The Budapest-Belgrade railway is valued USD 1.8 billion overall and USD 1.1 billion in Serbia.[13]

Chinese enterprises also increased their significance in the country’s energy industry. One of Serbia’s biggest thermal power plants completed renovations in 2017 thanks to loans from the China Machinery Engineering Corporation (hereinafter: CMEC) and is building a new facility in Kostolac power plant, planned for the end of 2023.[14] As part of a collaboration between Serbia, Russia, and China, Chinese enterprises have also taken part in the development of a gas-powered power plant. They have also contributed to the building of a heating pipeline that runs from the thermal power plant in Obrenovac to New Belgrade. Chinese Shanghai Electric and Gazprom collaborated to build the Pancevo power plant in 2021, which is housed inside a refinery that is controlled by Gazprom. Additionally, a memorandum of understanding (MoU) for the building of a €170 million heating pipeline energy project, backed by an Exim Bank loan, was signed in 2017 between the city of Belgrade and Power China. Chinese businesses have also shown an interest in producing sustainable energy, and CMC Europe has announced intentions to build a 100 MW solar facility close to the Serbian city of Sombor.[15] Currently, China’s Zijin Mining Group is planning a substantial expansion of its copper mine in eastern Serbia due to rising global demand for copper in the context of the clean energy transition. The company initially invested $678 million to establish the Cukaru Peki copper and gold mine, and now aims to deepen operations by almost 2 kilometers. Zijin Mining has signed on September 2023 a Memorandum of Understanding with the Serbian Energy Ministry, including plans to build a 300 MW photovoltaic system in Serbia for self-consumption of electricity.[16]

Impact of Chinese investments on Serbia’s economy

Undoubtedly, the BRI brought a wave of Chinese investments and infrastructure development projects which boosted the Serbian economy in the last ten years. Over this period, as the data demonstrates, the Chinese economy has advanced from a source country of cheap import goods into a significant trade and investment partners of Serbia. However, this partnership is not without its potentially looming risks to the Serbian economy, both on the sides on borrowing of capital and trade of goods.

Serbia is significantly exposed towards China in terms of foreign public debt, with Export Import Bank of China being its third largest single creditor (see Graph 2), which is the primary institution through which most Chinese credits to Serbia are channeled. The Serbian government recently tried to renegotiate its obligations to Chinese creditors, but Beijing showed no interest in any concessions, as reported by the Demostat portal.[17] According to data from the Serbian Public Debt Administration, Serbia currently owes EUR 2.37 billion to the Exim China,[18] Additionally, there is a debt of EUR 23.78 million to the Hungarian branch of the Bank of China for sewer infrastructure projects in 11 Serbian towns. Based on Demostat’s calculations using the 2023 state budget data, Serbia needs to secure EUR 128 million just to repay the principal amount. This amount will increase significantly next year, considering the added interest on Chinese loans, which typically stands at 2-3%, and the start of repayments for loans worth EUR 706 million that previously had a grace period.[19]

Comparatively, the amounts owed to international financial institutions – the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), and the European Investment Bank (EIB) collectively account for approximately EUR 5.05 billion in debt. It is crucial to recognize the significance of this debt distribution, as it reflects China’s growing economic influence and collaboration with Serbia, thus shaping the country’s economic landscape in the long term.

Serbiaìs Foreign Public Debt

Source: Republic of Serbia Ministry of Finance Public Debt Administration. Quarterly report on Public Debt.

The current debt of Serbia towards the Chinese Exim bank for various infrastructure projects exceeds EUR 2.3 billion, with repayment expected until at least 2039. This debt, arising from 13 ongoing or completed infrastructure projects, raises concerns about Serbia’s financial dependency on Beijing for another 17 years. Additionally, loans from other Chinese banks and projects funded from unidentified sources are unaccounted for, potentially leading to a significantly higher level of debt.[20]

On the other hand, Chinese investments in the region have demonstrated some immediate effects. The acquisition of the Železara Smederevo steel mill by the He Steel Group played a crucial role in preserving 5,200 local jobs. Shandong Linglong, a Chinese tire manufacturer, has initiated the construction of a production plant in the northern Serbian town of Zrenjanin with projected manufacturing capacities of 13 million tires annually and creating employment opportunities for 1,200 people.[21] These investments are tainted with controversy in terms of their environmental effects, labor rights, and public health hazards, as described in Section 4 below.

Serbia and China are also elevating their trade relations to the next level. On April 12, 2023, China’s Minister of Commerce, Wang Wentao, and Serbia’s Minister of Domestic and Foreign Trade, Tomislav Momirovic, officially announced the launch of negotiations on a free trade agreement (FTA) between the two countries, aiming to strengthen their comprehensive strategic partnership.[22] During an official visit to Beijing, the two ministers signed a Memorandum of Understanding, initiating negotiations on a free trade agreement between Serbia and China. The focus going forward is to implement the free trade agreement, creating new opportunities for Serbian companies in the Chinese market and facilitating greater success for Chinese companies in Serbia, leading to a further increase in Serbian exports to China, surpassing USD 2 billion by 2024.[23] The first round of negotiations for a free trade agreement took place in Belgrade from June 6 to 8, 2023. During the negotiations, the two sides engaged in comprehensive discussions in the trade of goods, rules of origin, customs procedures, trade facilitation, sanitary and phytosanitary measures, technical trade barriers, trade remedies, dispute settlement, investment, and services, as well as competition.[24] Future prospects of the China-Serbia free trade agreement are also worrisome for the Serbian economy. With the recently signed memorandum of understanding initiating negotiations for entering into the free trade agreement between China and Serbia, there are worries about the ability of the Serbian economy and businesses to compete with Chinese counterparts both in the domestic market and when accessing the Chinese market. The primary concern is whether the distribution of benefits from the agreement will be equitable, ensuring that Serbian businesses can sustainably grow in the face of increased competition from Chinese companies.[25]

3. China-Serbia Diplomatic Relations

Over the years, Serbia and China’s political ties have expanded, culminating in the formation of a comprehensive strategic relationship, following the dynamic of the BRI development.[26] Their bilateral cooperation has been deeper as a result of regular high-level visits, active political engagement, and the signature of significant agreements. Serbia is aware of the need of working with China on regional projects and processes. The two nations’ continuing political interaction shows their dedication to developing and deepening their political ties for their mutual benefit and prosperity.

Historical Diplomatic Ties

Since official diplomatic connections were established on January 2, 1955, Serbia and China have maintained a bilateral political relationship. Their connection has grown over time from a strategic partnership to a complete strategic partnership that is characterized by close communication and mutual respect. Strategic cooperation ties were formed between Serbia and China in 2009, and they were further enhanced in 2013. In June 2016, this alliance underwent an upgrade to a comprehensive strategic partnership, marking a strengthening of their collaboration. Recognizing the significance of these frameworks for bilateral cooperation, Serbia appreciates its cooperation with China within the context of China’s cooperation with Central and Eastern European nations and the BRI. In-depth political interaction and frequent high-level visits define the political ties between Serbia and China. In February 2022, on his most recent trip to China, Serbian President Aleksandar Vucic attended the Winter Olympic Games opening ceremony in Beijing and met with Chinese President Xi Jinping.[27]

High-Level Visits

As the first Chinese president to visit Serbia in 30 years, President Xi Jinping’s trip there in June 2016 was highly noteworthy. A joint declaration on the creation of a comprehensive strategic partnership between China and Serbia was signed during this visit. Serbia and China have a strong history of working together in the legislative branch. The National People’s Congress Chairman, Zhang Dejiang, visited Serbia in July 2017, and Maja Gojkovic, then Speaker of the Serbian National Assembly, reciprocated by traveling to China in November and December 2017, further solidifying the connections between the two nations’ legislative bodies.[28]

Other major trips have improved bilateral ties in addition to high-level visits. In November 2019, Prime Minister Ana Brnabic traveled to China to attend the China International Import Expo (CIIE) and met with President Xi Jinping. At the Meeting of Heads of Government of China and Central and Eastern European Countries held in Belgrade in December 2014, the Premier of the State Council of China, Li Keqiang, also paid an official visit to Serbia. Important trips by Serbian foreign ministers, such Ivica Dačić in February 2020 and Nikola Selakovic in May 2021, have also boosted the two nations’ political connections.[29]

4. Criticisms and Challenges

Environmental Impact and Concerns

Serbia has gained considerable Chinese investment as a result of its involvement in the BRI; however, this engagement also bears negative effects that go beyond only the economy, due to the environmental damage caused by China’s fast industrialization. In the essay “How Serbia Became China’s Dirty-Energy Dumping Ground,” Vuk Vuksanovic, a senior researcher at the Belgrade Centre for Security Policy, discusses the effects Serbia’s participation in the BRI has on the environment and offers expert insight. China’s fast development has come at a high environmental cost. Vuksanovic draws attention to China’s prodigious reliance on coal for energy generation, which has led to extensive land, water, and air pollution. Additionally, carbon dioxide emissions per person have dramatically grown and now exceed those of the whole industrialized world put together.[30]

Vuksanovic illustrates how Chinese firms have taken over faltering Serbian industrial facilities, disobeying strict European environmental regulations. Examples include Hesteel and Zijin Mining. As a result, public health has been negatively impacted by increased soil and air pollution. Vuksanovic mentions instances of protests in Smederevo and Bor when locals expressed their displeasure over pollution brought on by Chinese-owned copper mining and steel factories. Serbia ranks ninth internationally in terms of pollution-related mortality, which worries the European Parliament and obstructs Serbia’s road to joining the EU.[31]

In the examined cases of Bor and Smederevo, there are signs of increased pollution following Chinese acquisitions. Bor faces sulfur pollution likely due to overcapacity, and concerns about elevated arsenic levels exist. In Smederevo, black dust adds to existing environmental issues. Citizens are increasingly concerned about air quality, with questions arising about the Serbian government’s role in permitting opaque practices by new Chinese owners. Promised production increases have had adverse environmental and health effects. The lack of pollution data and expert marginalization compound the problem. Civic activism has grown, tied to anti-government sentiments. These cases challenge a simplistic “China bad, West good” narrative, emphasizing the Serbian government’s role in environmental practices. International pressure could push Chinese investors toward greener practices, as seen in initial pollution reduction steps. However, sustained pressure is needed for lasting change in Serbia’s environment.[32]

In April 2021, Zijin faced serious consequences when it was instructed to cease operations at its copper mine due to its failure to adhere to environmental regulations and construct an essential wastewater treatment facility, reflecting a troubling pattern of pollution violations that has led to repeated fines by Serbian authorities.[33] Now, Zijin Copper is developing a plan to reduce emissions and transition to renewable energy. The company aims to reach carbon dioxide emissions peak by 2028 and achieve climate neutrality by 2050, with plans to install 100 MW of solar power capacity by 2033. Notably criticized as a major polluter in Serbia, particularly in Bor, where it is situated, the firm is identifying its largest CO2 emitters and collaborating with the University of Belgrade to model emissions from mining and metallurgical activities, alongside preparations to replace inefficient equipment and switch to natural gas in its smelting process for substantial emission reductions. Furthermore, project documentation is underway for the construction of solar power plants to meet electricity needs and reduce the company’s carbon footprint, with an initial phase targeting a 9.9 MW photovoltaic system.[34]

EU Integration and Conditionality of Investments

Chinese investments in the Western Balkans impact greatly the region’s pursuit of EU integration. One key aspect highlighted is the lack of conditionality in Chinese investments, making them more attractive to Balkan countries compared to EU investments, which come with stricter reforms and standards. This undermines the effectiveness of the proposed EU reforms, particularly in areas related to social rights, sustainability, and environmental protection.[35]

The issue of China’s growing presence in Serbia from the EU perspective is not new, and the need for Europe to offer unwavering support and protection to countries like Serbia in their pursuit of EU membership has been the leading idea for some time.[36]

On December 16, 2021, the European Parliament issued a resolution expressing deep concerns over various issues related to Serbia, including forced labor, human rights violations, and human trafficking at the Linglong Tire factory in Zrenjanin, northern Serbia. The resolution called on the Serbian authorities to thoroughly investigate the alleged abuses and ensure the protection of fundamental human rights, particularly labor rights, for the approximately 500 Vietnamese workers involved. Passport confiscation, along with irregular employment contracts suggesting labor exploitation, have exacerbated concerns about the disregard for Serbian labor laws and EU integration standards. It further urged Serbia to align its labor laws with EU standards, adopt a new law on the right to strike, and address issues of corruption and lack of transparency in the environmental sector, particularly in relation to Chinese investments. The resolution also addressed concerns over China’s increasing influence in Serbia and the Western Balkans, calling on Serbia to strengthen compliance standards for Chinese businesses operating in the country and ensure that Serbian labor and environmental laws are applied to these companies.[37]

Chinese investments in Serbia have increasingly diverged from EU integration goals. Serbia has entered into numerous contracts with major Chinese industrialists and has granted China expanded legal privileges, often conflicting with EU regulations in areas of labor rights and environmental protection, which are tied with the Serbian accession process into the EU.

Risk of Debt Trap and Lessons from Montenegro

The European Parliament has in its Resolution on the 2022 Commission Report on Serbia expressed worries over Chinese business initiatives in Serbia, stating that Chinese businesses operating in Serbia’s economy are taking advantage of inadequate social and environmental norms at the expense of local populations’ safety. The size of the debts that would need to be repaid to China as well as Serbia’s growing reliance on Chinese defense products and technology, notably a Huawei mass surveillance system in Belgrade, alarmed the Parliament. The Resolution calls for the Western Balkan Investment Framework implementers, the European Bank for Reconstruction and Development, and the European Commission to put in place the necessary safeguards to prevent Chinese companies from circumventing labor and environmental laws while working on projects backed by the European Union or the European Investment Bank. As a viable alternative to Chinese investments, the EU and Serbian authorities are urged to make the most of the Union’s Economic and Investment Plan for the Western Balkans.[38]

EU Commissioner Johannes Hahn expressed apprehension regarding the heavy borrowing from China by some Balkan countries, highlighting China’s lack of concern for a country’s ability to repay loans. The risk of assets being transferred to China in case of repayment issues adds to the concerns. Smaller economies dealing with debt related to the Belt and Road Initiative, like Sri Lanka and Uganda, have faced challenges and unfavorable outcomes. Despite the need for infrastructural development in the Balkans, the vulnerabilities of countries like Serbia, with fragile economies and weaker institutions, make them susceptible to Chinese loans and investments, potentially impacting their autonomy and long-term sustainability.[39]

EU’s fears from debt traps in the Western Balkans are fairly justified, after experience with Montenegro’s struggle with Chinese loans. Montenegro was in a default risk, since it was unable to finance its debt to China for the construction of a highway connecting the port city of Bar to Serbia, part of the BRI. Montenegro borrowed around EUR 1 billion from the Chinese Exim Bank in 2014 for the project, despite warnings from international institutions about its commercial viability. China held about one-quarter of Montenegro’s total debt, which reached over 100% of GDP in 2020, raising concerns about the country’s financial stability. Furthermore, according to several sources, in case of Montenegro’s default under the loan agreement, Exim bank is entitled to seize land in Montenegro, except for military owned or land used for diplomatic purposes.[40] Montenegro’s situation is not unique, as other countries involved in the BRI, including Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Pakistan, and Tajikistan, also face the risk of debt distress, according to research by the Center for Global Development.[41]

According to available data, Serbia currently seems to be on a relatively safe distance from encountering the Montenegrin scenario, in terms of ability to service its obligations towards China and its structure of exposure towards foreign creditors. Exim China has a significantly lower share of Serbia’s public debt (currently 6.6% out from total foreign debt of 35.7 billion EUR)[42] compared to Montenegro (currently 19.73% out from total foreign debt of 3.5 billion EUR).[43] Additionally, Serbia seems to have a better coverage of public debt with its GDP (current foreign debt share amounting 35.5% of GDP) from Montenegro (current foreign debt share amounting 61.3% of BDP). However, the sustainability of Serbia’s debt exposure towards China will principally depend on the terms under which these loans were contracted and future needs for financing BRI-related projects through Chinese sourced loans. Furthermore, if we presume that a considerable amount of Chinese loans are still under a grace period, as previously mentioned in Section 2.3, it is to be seen how the Chinese loans will impact the Serbian economy in the following years. In this respect, careful financial planning is crucial to sustain the financial exposure towards the Chinese capital in the years to come and to mitigate any potential adverse effects of its growth in Serbia’s foreign debt structure.

5. Conclusion

BRI has undoubtedly brought substantial changes to Serbia’s economic and diplomatic landscape. China’s extensive investments through the BRI, have fueled economic growth, enhanced infrastructure, and deepened bilateral ties between the two countries. The partnership has seen the rise of strategic projects, such as the renewal of industrial facilities, the development of major infrastructure undertakings, and the exploration of a comprehensive free trade agreement. However, this dynamic relationship also raises critical questions and concerns that require further careful analysis.

China’s role as a significant trade partner and investor in Serbia has become increasingly pronounced. The investments, particularly in crucial sectors like manufacturing, energy, and infrastructure, have led Serbia in a new era of economic development and industrial expansion. The surge in FDI and trade volume between China and Serbia indicates wide-ranging integration of these two economies. These projects have created jobs, propelled economic growth, and have also positioned Serbia as a regional trade and logistics hub of the BRI. The partnership’s financial implications, especially the sizable debt owed to the Export-Import Bank of China, require strategic management to ensure long-term financial stability and sovereignty.

While China’s investments have yielded immediate optimistic impacts, concerns about environmental and financial sustainability and public health implications loom perilous. The expansion of Chinese industries into Serbia, marked by lax environmental standards and violations of labor rights, has sparked protests and public health concerns. The increase in pollution and environmental degradation resulting from these ventures raises pressing questions about long-term ecological sustainability. Moreover, the involvement of Chinese companies in strategic sectors has drawn attention to issues of transparency, labor rights, and compliance with international norms. The European Union’s concerns about the potential misuse of Chinese investments, coupled with environmental and human rights abuses, present complex challenges for Serbia’s domestic and international policies.

Serbia’s strategic alignment with China, particularly in the context of the BRI, has implications beyond economic cooperation. The comprehensive strategic partnership between the two countries, punctuated by high-level visits, political agreements, and the initiation of a free trade agreement, highlights the importance of their diplomatic relationship. While Serbia’s collaboration with China offers economic advantages and alternative development pathways, it must carefully navigate the delicate balance between strengthening ties with China and upholding its commitments in the EU integration process. The European Union’s legitimate concerns over China’s influence in the region, as well as its emphasis on labor and environmental standards, present a strategic challenge for Serbia’s dual aspirations of EU membership and partnership with China.

The tangled dimensions of economic prosperity, environmental stewardship, diplomatic collaboration, and geopolitical alignment underscore the multifaceted nature of China-Serbia relations under the BRI. Serbia stands at a crossroads, where it must thoughtfully manage the benefits of Chinese investments while addressing the growing concerns over environmental sustainability, labor rights, public health hazards, and economic dependency. Striking this equilibrium necessitates a careful examination of policy choices, regulatory frameworks, and diplomatic engagements. Serbia’s ability to capitalize on China’s economic contributions while safeguarding its long-term interests will define its trajectory as it navigates the complex terrain of the Belt and Road Initiative in the years to come. This intricate landscape demands not only strategic foresight but also a nuanced understanding of the opportunities and challenges that lie ahead.


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  31. Idem.

  32. Prelec, Tena. “Eco-Monsters & Eco-Fighters: China’s Investments in Serbia’s Heavy Manufacturing Industry as Seen through an Environmental Lens,” January 2021.

  33. Gocanin, Sonja. “Amid Environmental Concerns, A Chinese Mining Company In Serbia Looks To Repair Its Image Through Sport.” RadioFreeEurope/RadioLiberty, October 23, 2022.

  34. Spasić, Vladimir. “Serbia Zijin Copper Preparing Plan to Reduce Emissions, Switch to Renewables.” Balkan Green Energy News, April 14, 2023.

  35. European Parliament. “China’s strategic interests in the Western Balkans,” June 24, 2022.

  36. Vladimir Krujl. “Serbia torn between EU attraction and China ambitions”. Financial Times. November 2, 2017.

  37. European Parliament. European Parliament resolution of 16 December 2021 on Forced Labour in the Linglong Factory and Environmental Protests in Serbia (2021/3020(RSP)). December 16, 2021.

  38. European Parliament resolution of 10 May 2023 on the 2022 Commission Report on Serbia (2022/2204(INI)). Paragraph 95.

  39. Banovic, Rebecca. “China and Serbia Sign Major Infrastructure Deal Under the Belt and Road Initiative.” Forbes, April 28, 2019.

  40. Schmitz, Rob. “How A Chinese-Built Highway Drove Montenegro Deep Into Debt.” NPR, June 29, 2021.

  41. Giantin, Stefano. “Western Banks Help Montenegro Escape from the Chinese ‘Debt-Trap’ – Nato Defense College Foundation.” NATO Defense College Foundation, July 30, 2021.

  42. Republic of Serbia Ministry of Finance Public Debt Administration, 2023.

  43. Ministry of Finance of Montenegro. “Report on public debt as of December 31, 2022.” Government of Montenegro, April 13, 2023.