China accounts for a relatively small share of foreign investment in the Western Balkans compared to the European Union, but observers say the extent of Chinese influence linked to the billions of dollars Beijing has invested in the region since 2005 is prompting a growing concern.

Others, however, say that China’s regional influence is overstated.

Financial estimates vary. The London-based International Institute for Strategic Studies says China has invested an average of around $ 1 billion annually in the region since 2011, while the American Enterprise Institute estimates roughly the same amount each year. since 2005. The Washington-based Center for Strategic and International Studies has put the figure close to $ 1.8 per year since 2012.

Experts agree, however, that around 80% of Chinese investment in the Western Balkans, including projects in Albania, Bosnia and Herzegovina, Kosovo, Montenegro and North Macedonia, goes to Serbia.

While China accounts for around 1% of annual foreign investment in Serbia, eclipsed by the 70% of the EU, a June 2020 survey by the International Republican Institute showed that 71% of Serbs identified China as an important economic partner in the region.

Regional experts concerned

At a recent conference in Belgrade on Chinese influence in the region, some experts said that public opinion favorable to Beijing’s investments compared to those in Western Europe was skewed by politicized discourse.

FILE – A man holds a Serbian flag during a rally in Belgrade, Serbia, November 28, 2021. Activists accuse Serbian populist authorities of allowing foreign investors, mainly Chinese, to harm the environment of the Balkan nation in their pursuit of profit.

“Much of the pro-Chinese narrative comes from the Serbian political elites and media, which are under the direct or indirect control of the Serbian elite,” said Vuk Vuksanović, expert on China, EU and Western Balkans at the Belgrade Center for Security Policy. “So in this regard, China did not campaign excessively to shape its image in Serbia, for the simple reason that it was not obligated to do so. China has the Serbian government. [do] all for her, and realistically the perception of China is positive in Serbian public opinion. ”

Stefan Vladisavljev of the Belgrade Fund for Political Excellence said some lawmakers and regional officials prefer Chinese investments because Beijing demands fewer obligations from regional officials and actors on the ground.

“When [China] approaches countries – these are generally developing countries – [China] offers often agreed-upon infrastructure projects [upon in] some not transparent [way] … They come without a lot of conditions, and that’s attractive, ”said Vladisavljev, referring to EU investment guidelines which require regional governments and companies to prove that they are in compliance with EU standards.

“If someone does not pressure you politically … to submit to certain reforms, [to show] respect for competition or the rule of law, you will be very happy to implement such projects, “said Vladisavljev.

Officials at the Chinese Embassy in Belgrade did not respond to multiple requests for comment.

In 20 years, Vladisavljev added, Serbia is expected to hold more than $ 7.9 billion in Chinese loans. Before accumulating any additional debt from Beijing, he said, Serbia should ensure that guarantees are in place for Serbian workers, highlighting allegations of abusive labor practices at Chinese company Shandong Linglong Tire Co in Zrenjanin – less than an hour’s drive from Belgrade – where Vietnamese migrants workers are not paid and live in unheated barracks.

“Now we are talking about the rights of Vietnamese workers, and tomorrow maybe our own Serbian workers,” Vladisavljev said.

Linglong did not respond to multiple requests for comment on accusations of poor labor practices, nor did officials at the Chinese Embassy in Belgrade.

Serbian leaders such as Prime Minister Ana Brnabic played down the tire factory briefing, saying the bad media coverage was staged “by those who oppose Chinese investments” in Serbia, hinting at frequent criticism the West that Chinese plans there are bureaucratically opaque, ecologically questionable. and designed to strengthen Beijing’s political influence in Europe.

FILE - Serbian Prime Minister Ana Brnabic, right, greets Chinese Foreign Minister Wang Yi ahead of her meeting at the Serbian Palace in Belgrade, Serbia, October 27, 2021.

FILE – Serbian Prime Minister Ana Brnabic, right, greets Chinese Foreign Minister Wang Yi ahead of her meeting at the Serbian Palace in Belgrade, Serbia, October 27, 2021.

“At first, it was the environment. Now… they’re focusing on the workers there. After tomorrow there will be something else, “she said in reports.

Serbian President Aleksandar Vucic said a Serbian labor inspector had been dispatched to the Zrenjanin site, but was blunt about the expected conclusions.

“What do they want? Do they want us to destroy a $ 900 million investment?” Vucic asked, echoing widely with proponents of Chinese investments who say they are stabilizing the region through job creation.

Role of the EU

Until recently, the Western response to Chinese influence in the region was minimal. It is only recently that EU officials have marked investments in the Western Balkans, such as the Recently unveiled $ 46 billion for targeted regional technology and infrastructure spending, as a key part of the West’s response to China’s Belt and Road Initiative.

But Igor Novakovic of the Belgrade-based Center for International Affairs and Security said EU funding is often more difficult to obtain than Chinese investments.

“With [long-established Serbian-Chinese] cooperation, the money was obtained quickly and the work was done quickly, but the question of price and the negative aspect for the environment remains, “he told VOA.” Cooperation with the EU is slow, but thorough. ”

Economic consultant Jens Bastian said China often grabs hold of public infrastructure projects that are rejected or not carried out by EU actors.

“China is [compelled] come to south-eastern Europe and invest because others haven’t, ”Bastian told VOA. “Beijing is strategically determined to stay in the region for a long time.

Montenegrin financial adviser MiloÅ¡ Vuković said that the devastation caused Podgorica’s public finances caused by a Belt-and-Road loan – a billion dollar highway project that went out of tender and pushed national debt above GDP – should serve as a stern warning to neighboring countries vulnerable to China’s so-called debt trap diplomacy.

FILE - The Bar-Boljare highway is visible in the village of Pelev Brijeg, Montenegro, on May 27, 2021. A Chinese loan for the first phase of a highway connecting the Adriatic sea port of Bar and the border with Serbia increased Montenegro's debt.

FILE – The Bar-Boljare highway is visible in the village of Pelev Brijeg, Montenegro, on May 27, 2021. A Chinese loan for the first phase of a highway connecting the Adriatic sea port of Bar and the border with Serbia increased Montenegro’s debt.

If Montenegro defaults, Vuković said, public assets such as the country’s electricity grid or industrial ports could become collateral for Chinese debts.

“Later, if we can’t pay … they can say, ‘We will take electricity from the state. [and] invest in renewable energy sources, ”he told VOA. “So they replace the project that is not profitable for them with a project that is profitable – and we know that energy is the future, especially renewables.

Belgrade University economist Ivan Vujacic, Serbia’s ambassador to the United States from 2002 to 2009, said regional corruption, especially local political elites who deliberately distort Chinese loans as investments, is in part responsible for Chinese-funded projects that put state property, workers’ rights or the environment at risk.

“I guess for investments [that China has] calculated, it pays off for them and … they are on their way to achieving a [profitable] result, ”said Vujacic, referring to China acquires a debt-burdened copper mine in 2018 in Bor.

“As for Serbia, I suppose and hope that the feasibility studies have been done correctly and that they will yield results,” he said. “But we don’t have any guarantees for that.”

This story was born in Serbian service of VOA.

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