Countries' cooperation a building block of BRI

Strong bilateral business relations spur pursuit of FTA

Officials and market monitors said closer bilateral business relations between China and Serbia are expected to inject new impetus into growing the Belt and Road Initiative well into the future.

Despite recent global challenges such as rising trade protectionism and demand limits, the degree of interdependence between the two countries remains stable in bilateral trade, said Liu Qing, vice-president of the China Institute of International Studies in Beijing.

Serbia is China's major trading partner in Central and Eastern Europe, and trade volume between them amounted to $3.55 billion in 2022, up 10.1 percent year-on-year, according to data from the General Administration of Customs. That trend continued in the first seven months of this year, while bilateral trade surged 14.7 percent on a yearly basis to $2.46 billion.

China exports mainly construction machinery, computers, manufacturing equipment, steel, electronics, textiles, garments and household appliances to Serbia, which reciprocates by shipping copper ore, tires, non-alloy steel products, electric motors, wire and cable products, food and tobacco products to China.

Lin Meng, director of the modern supply chain research institute at the Beijing-based Chinese Academy of International Trade and Economic Cooperation, said because China and Serbia have deployed large amounts of resources into regional connectivity, manufacturing and modern agriculture, they are strong supporters of multilateral trade and investment growth.

Lin said the two countries have huge cooperation potential in industrial and supply chain coordination, infrastructure construction and e-commerce development because they have differentiated supply and demand advantages.

In a concerted effort to elevate the trade relationship, the first round of negotiations for a free trade agreement between China and Serbia was held in the Serbian capital of Belgrade in June. The two sides made positive progress on a wide range of issues, including trade in goods, rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, technical trade barriers, trade remedies, dispute settlement, investment and competition.

A free trade agreement would further contribute to the expansion of bilateral trade, said Serbian Minister of Domestic and Foreign Trade Tomislav Momirovic, who noted that cooperation between Serbia and China has significantly intensified in recent years and a number of successful infrastructure projects have been implemented.

Speaking at the Communication-Integration-Ecosystem conference in Belgrade in mid-June, Chen Bo, China's former ambassador to Serbia, said closer Sino-Serbian cooperation, boosted by the tangible growth of the BRI, has yielded significant achievements, especially in the field of infrastructure.

In July, Power Construction Corporation of China, also known as PowerChina, a Beijing-headquartered centrally administered State-owned enterprise, announced it is building a photovoltaic station project in the Serbian village of Saraorci. As the first large-scale ground-mounted photovoltaic power station built by a Chinese company in Serbia, it will feature an installed capacity of 13.86 megawatts and its scope of work will include the construction of solar farms, surveying, design, supply, civil engineering of switching stations and outgoing transmission lines, as well as the electromechanical installation and commissioning.

China's advanced technologies and equipment will be used in the project, said Liu Shaoquan, Power-China's head of the Eurasian regional headquarters.

Upon completion, the project will provide more than 16 million kilowatt-hours of green electricity annually and reduce carbon dioxide emissions by 16,000 metric tons, he said.

PowerChina's other projects in Serbia include the Belgrade subway, the Gornji Milanovac bypass and a package of transportation projects in the central and western regions of the country, according to China's State-owned Assets Supervision and Administration Commission of the State Council.

In March, the one-year-old China-built Belgrade-Novi Sad section of the Serbia-Hungary Railway, the first high-speed railway in Serbia and a landmark BRI project in Europe, marked an impressive milestone with nearly 3 million passenger trips recorded, according to China Railway International. Over the first year of its operation, the line has greatly facilitated commuter travel and become a symbol of the international cooperation between the Chinese and Serbian railway industries while playing a positive role in serving the high-quality growth of the BRI. The 80-kilometer railway, with a designed top speed of 200 kilometers per hour, cut travel time between the two cities from 90 minutes to about 30 minutes, dramatically boosting social and economic development in the region.

China-developed train control systems, including traction transformers and overhead pantographs, also showcase China's railway technology, said Song Wei, a China Railway International engineer working on the project.

The Belgrade-Novi Sad railroad has received recognition from the European Union, which is significant for China's railway manufacturers to expand their global reach, and Song said the company has shouldered its responsibility by promoting solutions to projects and showcasing its equipment and technology globally.

The 342-km Serbia-Hungary Railway is an important BRI project in Europe, linking Belgrade and Budapest, the capital of Hungary. Serbia's section is expected to be operational by the end of 2024, while the Hungary section is under construction. Upon completion, travel time between the two capitals will be reduced from eight hours to around three hours.