Beijing – the fourth pillar of Serbian foreign policy

A recently signed strategic partnership agreement between Serbia and China means that Beijing is now firmly established as the fourth pillar of Serbian foreign policy.

By Ian Bancroft

The signing of a strategic partnership agreement between Serbia and China firmly establishes Beijing as the fourth pillar of Serbian foreign policy after Brussels, Washington and Moscow. Primarily concerned with economic, infrastructural and technological co-operation, the agreement will provide Chinese companies and investors a firm foothold in the Balkans and, ultimately, the EU. With further co-operation proposed in multilateral arenas and on defence-related matters, particularly the military-industrial sector, Serbia has positioned itself to benefit from the growing economic, military and international importance of China.

The strategic partnership – signed during a recent visit to China by Serbia’s president, Boris Tadić, at the invitation of his Chinese counterpart, Hu Jintao – revolves around four distinct elements. Though trade between the two is down over 30% year-over-year, Serbia and China have committed to enhancing bilateral trade and economic co-operation, particularly in the areas of infrastructure, petrochemicals, energy and high-technology. From a political perspective, meanwhile, the two countries will seek to foster various inter-governmental, inter-parliamentary and inter-party exchanges. China and Serbia have also agreed to strengthen multilateral co-operation in international bodies, primarily through regular consultations and exchanges of points of view. Steps will also be taken to enhance people-to-people contact in the spheres of education, culture, sports, science and technology.

In the midst of its economic struggles, Serbia is especially keen to encourage Chinese enterprises to invest in Serbia. Tadić was keen to stress that the fact that Serbia’s “has signed free trade agreements with lots of European countries, and is preparing to be a member of the European Union” would give Chinese companies access to European markets. Serbia has also proposed the establishment of a special customs free zone for Chinese companies and the construction of a port on the Danube to facilitate the import and distribution of Chinese goods. China, meanwhile, invited Serbia to take part in the EXPO2010 world exhibition in Shanghai.

With respect to infrastructural projects, Serbia is set to receive a favourable term loan of €200 million from the Export-Import Bank of China for the construction of a bridge crossing the Danube in Belgrade. Mlađan Dinkić, Serbia’s Minister of Economy and Regional Development, also stated that Chinese companies would be invited to invest in various other infrastructure projects totalling around €1 billion.

In the realm of defence, meanwhile, Serbia last week welcomed China’s defence minister, Liang Guanglie; the first such visit by a Chinese defence minister in twenty-five years. Whilst his Serbian counterpart, Dragan Šutanovac, who last year signed an agreement with China on co-operation in defence matters, concluded that the defence sector ties are “perhaps the best in the overall cooperation between the two countries”, he added that that there “are big prospects for expanding military cooperation”. Serbia’s Prime Minister, Mirko Cvetković, meanwhile, emphasized that “military-economic cooperation will be further intensified in the coming months: through an exchange of experiences in peace missions, cooperation between defence industries and military staff education”. The growing importance and budget of the Chinese military provides a variety of opportunities for the Serbian defence sector.

Through the signing of a strategic partnership agreement and further commitments to co-operate on defence-related matters, China has firmly established itself, in the words of Tadić, as “one of the four pillars of Serbian foreign policy”. With the Serbian economy expected to contract around 4% this year, and with the Serbian government struggling to secure financing for key infrastructural projects, the economic aspects of the deal are of immediate and fundamental importance. The significance of intensified co-operation on diplomatic and defence matters, meanwhile, will continue to grow as China plays an ever greater role in international affairs, particularly given its on-going support for Serbia’s stance on Kosovo.