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The Balkans are China’s New Gateway to Europe

07 Oct 2021
By Dr Nina Markovic Khaze
Pelješac bridge in final stage of construction (June 2021)

China has stepped up its economic and political influence in the Balkans through the Belt and Road Initiative. However, as this region is considered a military flashpoint, Chinese influence raises concerns for other European states.

Is Serbia a new strategic hub for China in Europe? Serbia, and the Balkan region more broadly, has certainly become the “first entry point” for China’s flagship projects in Europe. China’s financing in the region since the announcement of the AU$1.2 trillion Belt and Road initiative in 2013 now exceeds $7 billion — making China the fourth-most important external economic actor in the Balkans. In January 2021, Serbia became the first European country to use Chinese-made vaccines for mass inoculation. On 9 September 2021, Serbian President Aleksandar Vucic laid a foundation stone for the construction of China’s Sinopharm vaccine factory — thereby placing Serbia as the first European country to produce Chinese vaccines. The new factory’s manufacturing capacity will be up to 40 million doses per year after its expected completion in April 2022. This move signals Beijing’s willingness to use its “best friend in Europe as the regional hub and distributor of China’s R&D to Europe, the Middle East, and Africa.  

China’s footprint in the Balkans has increased significantly during the COVID-19 pandemic, following a decade of steadily rising Chinese economic presence in the EU’s troubled neighbourhood. The Balkans is still a potential flashpoint for European peace and security, with unresolved border and sovereignty issues, such as the ongoing diplomatic wrangling between Kosovo and Serbia. In May 2021, the US and Russia held concurrent military drills in the region. Although a candidate for EU membership and a participant in the North Atlantic Treaty Organization’s (NATO) Partnership for Peace Program, Serbia’s close military links with Russia and growing defence ties with China are increasingly being probed by the European Parliament. The EU’s slow decision-making on the progress of membership talks for the remaining “Balkan six” has opened the door wide for other external players, in particular Russia and China but also Turkey and some Gulf states, to position themselves as geopolitical alternatives to the West. The Balkans remains the EU’s litmus “test of credibility” in the view of many observers — which the EU has failed in the past, warranting US military presence as the security guarantor in the region.  

China’s key strategic projects in the Balkans 

The Balkans is China’s gateway to Europe. China’s Balkan investments in infrastructure and related projects aim to increase its connectivity to the EU. In Serbia alone, China has invested more than $5 billion in mining, infrastructure, energy, and technology projects between 2014 and 2021. Serbia is the largest recipient of overall Chinese foreign direct investment in the Balkans. While Serbia remains China’s closest economic and political ally in Southeast Europe, other countries including EU members such as Croatia, Hungary, and Greece have also engaged with China on strategically important projects in recent years.  

In Croatia, despite concerns expressed by critics, which include some Bosnian and EU politicians, China is on the way to completing the construction of a 2.4 kilometer bridge across Adriatic Sea. The Peljesac Bridge project will last four years in total, and by spring 2022, it will link two EU territories separated by geography. The countdown to the “reconnecting of Croatia” has already begun. The construction for the project, worth more than $885 million, was mostly financed with EU funds (around 80 percent). It is China’s first such large-scale infrastructure project in the EU and a “showcase for China in Europe.” In Serbia, the China Road and Bridge Corporation had already completed a similar but much smaller project, the Pupin Bridge in 2014, which was China’s “first big infrastructure investment in Europe.” Lessons learned from the Balkans can certainly assist the Chinese state-backed companies to win future strategically important infrastructure and other projects in Europe. 

Another strategically important project that aims to link Southern and Central Europe and which is co-financed by China includes the 350km Budapest-Belgrade-Skopje-Athens railway for cargo transportation that will pass through the Balkans. Russia is also involved in its construction. However, this project — which was once dubbed “a flagship project” for China’s Belt and Road Initiative — has had many setbacks. Furthermore, recent events relating to Montenegro’s proclaimed inability to pay its $1.4 billion debt to China for the construction of the world’s “most expensive motorway” might deter some European states from borrowing from China in the future for uber-expensive infrastructure projects. While the responsibility falls on both the creditors and borrowers, the Balkan states continue to be in urgent need of infrastructure uplift, with most of their roads, railways, ports, and airports having been constructed during the socialist era over thirty years ago. With the EU turning its gaze inward following Brexit and the French government’s slowing down of accession talks with Albania, North Macedonia, and EU enlargement generally, China has emerged as a competitor to Western interests in the Balkans — including in the military and security field.  

China-Serbia military and security ties 

Serbia is the only country in Europe with close military-to-military, policing, and security sector ties to the Chinese government. In 2019, Serbia launched joint police patrols with the Chinese officers in several Serbian cities with the rationale of enhancing security for and providing a link between the Serbian police and numerous Chinese tourists. Since a memorandum of understanding was signed in that same year between Serbian and Chinese interior ministries, Serbia has implemented a “Safe City” project which saw thousands of cameras with facial recognition technology being installed in Belgrade. In June this year, the European Parliament voiced its concerns about mass surveillance in Serbia by Chinese-made Huawei technology without Serbia first enacting appropriate legislative measures that would guard against any abuse of privacy infringements.  

As an unequivocal sign of deepening military ties, in 2020 Serbia purchased the Chinese FK-3 air defence system and six unmanned aerial vehicles in Europe’s first such deployment and China’s export of military aviation equipment in Europe. Regional observers are warning that China’s arms sales to Serbia could add fuel to a regional arms race which is largely being undetected in the Western press.

The future of China’s presence in the Balkans 

It is likely that China’s role and influence in the Balkans will grow over the next few years  including in the cultural, education, and R&D spheres — with the region becoming, once again, a zone of political and economic competition between the East and the West. As EU accession fatigue grips the Balkan six, it is pivotal for the future of European security that the EU recommits to enlargement with realistic incentives for reform by candidate and future candidate states. Failing that, non-Western actors are almost certainly going to gain a formidable stronghold in the Balkans, a post-conflict region that is still dealing with the legacy of conflict, reconstruction needs, brain drain, high levels of youth unemployment, and growing streaks of authoritarianism

China’s success with infrastructure projects will anchor Chinese big business and government interests in the Balkans. With Serbia’s newest proposal to establish a direct aviation route between Belgrade and Beijing in the near future, China’s bridge to Europe will be complete.   

Dr Nina Markovic Khaze has been a national political reporter for SBS radio since 2013 and a prolific media commentator in her areas of expertise, a sessional academic in Sydney (UNSW and Macquarie) since 2014, and a Senior Parliamentary Researcher in the Foreign Affairs, Defence and Security section of the Parliamentary Library (2007-2014).

 This article is published under a Creative Commons Licence and may be republished with attribution.