Funding of Transport Infrastructure in Serbia: China in Focus

Abstract

In the Western Balkans, Serbia is considered one of China’s key partners, represented both in the political sphere and financially in the number of investments from Chinese corporations and banks. This paper examines the rate of Chinese expansion in Serbia by examining the investments in Serbian transportation infrastructure. It also analyses the relationship between the two countries and examines the response of other powers towards the Chinese expansion in Serbia. The annual report of the Ministry of Construction, Transport and Infrastructure (MGSI), Serbia summarises the recently implemented, ongoing and planned investments. According to this document, from 2004 to 2020 Serbia has and is planning to invest nearly EUR 6 billion into development projects with a 3:1 ratio in favour of investments to railway projects (MGSI 2018, ‘Overview of Finalised, Ongoing and Planned Transportation and Construction Infrastructural Projects,. 3). Although European institutions play a crucial role in financing the projects, Chinese financial institutions are becoming increasingly influential. Based on the assessment of the data in the Ministry report and considering the projects with an identified financing provider, one-fifth of the total value is provided by the Chinese banks. While the Chinese side argues that they strive to ensure a ‘win-win’ position for all stakeholders, the European Union (notably, the Western Member States) and the United States have reservations about Chinese expansion in the region.