How The US and China Act Like Partners In Serbia

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Chinese investments in Serbia continue to grow, but the southeastern European country still firmly stands in the Euro-Atlantic geopolitical orbit. European Union officials often “express their concerns” over Beijing’s actions in the Balkan nation, although many EU member-states keep increasing economic cooperation with China. But how does the United States – the major foreign power operating in the Balkans – see Belgrade’s deals with Beijing? 

Serbia – the so-called Western Balkans’ largest economy that accounts for 44 percent of regional GDP – hosts several large Chinese equity investments…most notably, the Chinese Hesteel Group’s 2016 purchase of the Smederevo steel mill that was previously owned by the American company US Steel. Beijing also owns copper-gold assets in the Serbian town of Bor, which the Chinese Zijin Mining company purchased from the American Freeport McMoran Inc in 2019. Thus, Washington de facto gave “the green light” for China’s business in Serbia, even though US officials often tend to portray Beijing as “the major threat” for American interests all over the world.

It is also worth noting that in June 2020 Serbia reportedly publicly displayed six new military drones purchased from China. Beijing’s shipment of drones to Belgrade was its first export of military aviation equipment into Europe. Such a political maneuver, however, did not seem to worry the United States, given that the Serbian Army has close ties with Ohio National Guard. In addition, Serbia – whose Parliament declared armed neutrality in 2007 – conducted 13 military exercises with NATO member-states in 2019. Since in politics nothing happens by accident, Belgrade’s military and economic ties with China were likely approved by the US. Otherwise, Washington would have easily found a way to prevent such activities. 

It is worth remembering how on September 4, 2020, the White House clearly demonstrated who really pulls the strings in the Balkans. That day, the Prime Minister of Kosovo Avdullah Hoti and the President of Serbia Aleksandar Vucic signed the Washington Agreement – a “historic” deal on economic normalization – although the document looked more like a list of US demands that was addressed to its Balkan client states. For instance, the American officials have created an unusual mix of commitment to Belgrade and Pristina, from a ban on Huawei’s 5G technology, decriminalization of homosexuality, energy diversification, to the designation of Hezbollah as a terrorist organization.

At this point, however, Serbia is still doing business with Huawei, which suggests that pressure from Washington is still not that strong. It remains to be seen, however, if Belgrade will eventually have to replace the Chinese tech giant with some Western corporations that will install fixed broadband infrastructure (including the 5G network) in the country, or if Serbia can continue developing close ties with China in terms of technology. 

The Balkan nation was the first country in Europe to approve and start using the Chinese produced Sinopharm vaccine. In Serbia, the Chinese Sinopharm by far exceeds the other vaccines (Sputnik V, Pfizer-BioNTech and AstraZeneca) in availability. 

“Frankly, the government of Serbia has a right to be very proud of how well it’s done in procuring vaccines. Serbia is an independent country with its own foreign policy, its own economic policy”, said Anthony F. Godfrey, the United States Ambassador to Serbia.

In reality, Serbia’s foreign and economic policies are heavily dependent on the West, given the fact that the country is surrounded by NATO and the EU members. Still, the Western powers so far refrain from preventing the growing economic ties between Belgrade and Beijing. 

Cooperation between Serbia and China became more visible over the past few years, but the very basis for the partnership was the Agreement on Economic and Technical Cooperation in the Field of Infrastructure, which was signed on August 20, 2009 in Beijing. Ever since, China has been involved in huge infrastructure projects in Serbia, but China’ share of the country’s total public debt is only about three to four percent. In other words, at this point, there is no danger for Serbia to fall into “the Chinese debt trap”. In the long term, however, several newly announced China-funded projects, such as the construction of highways and motorways, as well as wastewater projects and landfills in Serbia, are expected to significantly increase the nation’s debt to the People’s Republic. 

At the political level, Serbia, as well as other Balkan nations, will likely remain stuck in the EU waiting room for the foreseeable future. China, and some regional powers – namely Russia and Turkey – will keep increasing their influence in the region, but their actions will always be closely coordinated with the United States. 

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