Xi's visit to Serbia is testimony to a long-standing economic bond

Editor's note: Matteo Giovannini, a special commentator for CGTN, is a finance professional at the Industrial and Commercial Bank of China and a member of the Global Young Leaders Dialogue. The article reflects the author's views, and not necessarily those of CGTN.

Chinese President Xi Jinping has arrived in Belgrade to pay a state visit to Serbia. The visit holds significant importance for both countries and reflects the depth of their bilateral relations.

The economic ties between China and Serbia have deep roots and have witnessed significant growth and development in recent years, marked by increasing trade volumes, investment flows, and strategic cooperation. This partnership has now evolved and expanded, encompassing trade, investment, infrastructure development, and cultural exchanges, and is contributing to economic development and connectivity between the two nations.

Chinese investments in Serbia's infrastructure have been instrumental in upgrading and expanding critical transportation networks, energy facilities, and telecommunications systems. This infusion of capital has helped modernize Serbia's infrastructure, improving connectivity within the country and with neighboring regions. For instance, projects like the Belgrade-Budapest railway and highway construction have enhanced transportation links, facilitating trade and economic growth.

The capital injection from China has generated employment opportunities in Serbia, both directly through project-related jobs and indirectly through increased economic activity. This has contributed to economic growth and helped reduce unemployment rates, particularly in sectors like construction, manufacturing, and services.

Meanwhile, Chinese investments have offered Serbia an alternative source of capital and investment compared to traditional Western sources. This diversification has reduced dependence on a single market or investor beyond the European Union, thereby strengthening Serbia's economic stability and resilience.

Technology transfer and innovation play an important part in the relationship between the two nations. Chinese companies investing in Serbia often bring advanced technologies and expertise, facilitating technology transfers and knowledge sharing. This contributes to innovation and skills development in Serbia, enhancing competitiveness and fostering a more dynamic business environment.

Chinese telecommunications companies have shown interest in the Serbian market with giants such as Huawei that has been involved in deploying telecommunications networks and has partnered with local telecom operators.

As bilateral trade between the two countries has flourished over the years, Serbian exporters have benefited from access to a vast market in China exporting agricultural products, metals, minerals, and manufactured goods. At the same time, Chinese businesses have been able to explore business opportunities in Serbia while exporting a range of products, including electronics, machinery, textiles, and consumer goods.

Initiatives such as the China-Serbia comprehensive strategic partnership, established in 2016, have further intensified the level of collaboration in various fields, including trade and investment, with both countries signing agreements to promote economic ties and remove trade barriers.

President Xi's visit to foreign nations often coincides with announcements of major economic agreements and investment projects. In this sense, the visit is providing a golden opportunity to deepen economic cooperation, signing new trade agreements, and promoting Chinese investments in key sectors such as infrastructure, energy, and manufacturing.

As Serbia plays a crucial role in the Belt and Road Initiative, serving as a strategic hub for connectivity, President Xi's visit offers the chance to discuss the development of projects in the European nation. Being a key partner in this initiative, Serbia's transportation infrastructure projects can contribute to regional connectivity linking Europe and Asia while broadening economic integration and development across the Balkans and beyond.

Improved infrastructures and economic development attract tourists and investors, creating a virtuous cycle that benefits Serbia's tourism and services sectors. This contributes to the overall growth of the economy and enhances Serbia's attractiveness as a destination for business and leisure, promoting cultural exchanges and people-to-people ties between China and Serbia. An enhanced cultural understanding, in addition to educational cooperation, can contribute to fostering mutual respect and friendship between the two nations, strengthening the foundation of their economic bond.

Overall, the economic relationship between China and Serbia is characterized by mutual benefit and strategic alignment. While these relations offer opportunities for economic growth and development, it is essential for both countries to ensure that the cooperation is structured in a way that continues to maximize the benefits for their respective economies and populations. Maintaining a constant dialogue and promoting collaboration in a growing number of industries is the way to go as it can further strengthen the economic partnership between the two countries in the years to come.

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