“We have to, you know, live even before joining the European Union, and we have to think about our country, our children and our future,” Serbian president Aleksandar Vucic told media in Beijing in mid-October prior to his ministers signing a free trade agreement between the two countries.
Vucic’s statement was a reaction to EU Commission spokesperson Peter Stano, who said Serbia would have to withdraw from all bilateral agreements with third parties on the day it joins the EU.
According to data published by Serbia’s Statistical Office, China was Serbia’s second-largest import partner between January and September 2023. The report, however, also notes that Serbia’s corresponding exports are not high, and the country’s biggest trade deficit is with China.
This agreement is a step forward in deepening the economic relations between the two countries.
China has been financially present in Serbia since before Vucic’s Serbian Progressive Party came to power, but this relationship deepened in the last couple of years. It helped Serbian authorities to “keep jobs”, such as in the Smederevo Ironworks, which was bought by China’s Hesteel Group (HBIS) in 2016, and to build kilometers of highways, which leaders have declared is a great success and a sign of progress.
At the same time, these projects did not conform to the country’s legal system, and were a direct deal between the state and its Chinese partners. In practice, this meant that Serbia did not consider other offers. The subcontractors on these projects are domestic companies, but, in some cases, those were close to the ruling elite.
Serbian institutions never reacted to serious allegations of violation of workers’ rights in Chinese companies and problems with pollution.
According to an analysis by BIRN, in 2021 there were at least 61 projects in various stages of completion in Serbia that had been or were being implemented by or in cooperation with Chinese entities over a decade, with a value of at least 18.7 billion euros.