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China’s Growing Ties With Serbia

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China Power

China’s Growing Ties With Serbia

Political ties have long been strong, and are now being supported by increased economic links.

China’s Growing Ties With Serbia
Credit: REUTERS/Kim Kyung-Hoon

On February 5, 2016, Chinese President Xi Jinping made an official statement acknowledging Serbian statehood day. In the press release that followed, Xi highlighted deepened cooperation between China and Serbia in recent years, and reaffirmed China’s intentions to expand economic links with Serbia in the years to come. This statement came on the heels of announcement by Chinese ambassador to Serbia Li Manchang that Chinese companies were planning to invest heavily in the construction of an industrial park in Serbia, to attract Chinese visitors to the country. The progress of these investments has been tacitly confirmed by Xi’s acceptance of an invitation from his Serbian counterpart Tomislav Nikolic to visit Belgrade in 2016.

These diplomatic overtures confirm Serbia’s status as China’s strongest and most consistent ally in Eastern Europe. The strength of the China-Serbia partnership can be explained by two principal factors. First, China and Serbia are normatively compatible on issues of sovereignty and territorial integrity, leading to both countries’ supporting each other on Kosovo, Tibet and Xinjiang. Second, Serbia’s strategic location makes it a vital cog in China’s attempts to link its One Belt, One Road project to Central Europe, and consequently, a natural destination point for Chinese economic and infrastructure investments.

China and Serbia: Normative Partners on Sovereignty Disputes

The China-Serbia alliance was crystallized during the 1990s as both countries came under fire from the West for their refusal to grant independence to autonomous regions under their control, and for human rights abuses towards minority communities. China strongly backed Slobodan Milosevic’s regime during the Kosovo crisis, arguing that Serbian paramilitaries were intervening in Kosovo to prevent Albanian separatists from violating Yugoslavian sovereignty. Chinese support for Milosevic became especially prominent during the 1999 NATO bombings of Kosovo, as China believed that NATO had no legal right to bomb Serbian military targets.

The perceived recklessness of NATO’s military intervention in Kosovo was confirmed in the eyes of Beijing’s policymakers by the accidental bombing of the Chinese embassy in Belgrade. The U.S. insisted that this bombing was the product of outdated CIA maps. But the Chinese government unofficially linked this action to America’s broader sovereignty violations in Serbia. In fact, subsequent reports alleged that the Chinese embassy was used as a backup communications center for the Yugoslav army.

Even though Milosevic’s hold on power was severely weakened by 2000 due to UN sanctions and international isolation, Chinese diplomats continued to meet publicly with the Serbian dictator and China invested $300 million into the Serbian economy in December 1999 to prevent a destabilizing financial crisis. The Chinese state media frequently depicted Milosevic as a crusader against Western imperialism and violations of international law, while virtually ignoring his regime’s ethnic cleansing against Albanians in Kosovo. Prior to his 2000 election defeat, both Belgrade and Beijing believed that recognizing Milosevic as the legitimate leader was vital to upholding Yugoslavian sovereignty and solidarity during the late 1990s provided the foundation for a durable bilateral partnership.

Even though Serbia has thawed relations with Europe in the fifteen years, since Milosevic’s demise, China and Serbia have continued to maintain their normative bonding on sovereignty born out of the Kosovo experience. China scathingly condemned Kosovo’s unilateral declaration of independence in 2008, and warned that the West’s legitimization of this decision would destabilize the Balkans. The strength of China’s alliance with Serbia was illustrated by Beijing’s decision to enter a legal challenge to Kosovo’s secession through the International Court of Justice (ICJ) in December 2009. This unprecedented action was aimed at providing legal legitimacy for Serbia’s right to protect its territorial integrity.

China’s hawkish response to Kosovo’s independence declaration is linked closely to its fears that international legitimization of Kosovo’s secession from Serbia will repeat itself in autonomous territories governed by Beijing. Russian Foreign Minister Sergey Lavrov publicly linked Kosovo’s decision to unrest in Tibet in March 2008, and China’s support for Belgrade can be explained by its desire to avoid setting a precedent that Tibetan nationalists could exploit. Serbia’s staunch support for a One China Policy, criticism of the decision to award the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo, and consistent emphasis on the domestic nature of the Tibet dispute, has resulted in a durable normative partnership between Belgrade and Beijing. As these norms are at odds with European values, the China-Serbia alliance has frustrated European policymakers who seek to integrate Serbia firmly into the EU fold.

Economic Foundations

The economic interests underpinning China’s expanded cooperation with Serbia, since the two countries established a strategic partnership in 2009, are multifaceted and diverse. Infrastructure investments have been a vital component of the partnership, as China seeks to construct a Belgrade-Budapest railway and smaller railways across Serbia to give its One Belt, One Road project a foothold in the Balkans. Negotiations conducted in December 2014 to facilitate the progress of this railway construction project highlighted the potential for Serbia to be a fulcrum in a trade network transporting Chinese manufactured goods from Piraeus, Greece to Central Europe.

China’s investment proposals have also attracted keen interest from other Southeastern European countries like Romania, Macedonia, Bosnia-Herzegovina and Montenegro. This demonstrates the large potential for expanded Chinese geopolitical leverage in the region should Beijing’s relationship with Serbia continue to strengthen.

Chinese infrastructure investments have been a gateway for intensified efforts to diversify the Serbian economy. The 2010 Sino-Serbian Friendship Bridge, which was constructed by a leading Chinese state-owned enterprise and funded by Chinese creditors, resulted in expanded Chinese investment in Serbian energy, with thermal power plant construction particularly successful. Serbia’s dependency on Russian energy supplies has been exploited by Kremlin policymakers, who charge Belgrade a higher rate for Russian gas exports than other Eastern European countries like Hungary. In light of this, Serbian policymakers have understandably welcomed China’s energy infrastructure investments, as an appealing alternative.

Serbia’s manufacturing capacity has also benefited considerably from Chinese money. Li Manchang stated in March 2015 that officials from China’s Hebei province had visited Belgrade with the intention of investing in Belgrade’s automotive industry. This followed Serbia’s signing of 13 agreements with China in 2014 covering the financial, infrastructure, telecommunications, and transport sectors. The IMF’s suspension of credit to Serbia in 2012, due to the country’s failure to comply with the financial conditions it set, increased the attractiveness of Chinese manufacturing investments. The relevance of Chinese linkages with Belgrade is likely to continue to escalate as the Serbian economy grapples with budget deficits, the aftershocks of a severe recession from 2013-2015, and acute capital shortages.

While EU policymakers continue to correctly focus on Russia’s military cooperation and deep economic partnership with Serbia as a potential bulwark against Belgrade’s integration with the EU, China’s expansion of ties with Serbia has added another dimension to the long-standing EU-Russia competition for influence in the Balkans. As Serbian policymakers fear sovereignty violations resulting from firmly pivoting towards Europe or Russia, China’s geographic detachment could increase its appeal as a third option partner and result in Serbia becoming a durable foothold of Chinese influence in Eastern Europe.

Samuel Ramani is an MPhil student at St. Antony’s College, University of Oxford in Russian and East European Studies. He is also a journalist who is a regular contributor to the Huffington Post Politics and World Post verticals, and recently to the Kyiv Post