Chinese President Xi Jinping’s “Belt and Road Initiative (BRI)”, which emerged during his visits to Indonesia and Kazakhstan in 2013, has found resonance in a vast geography that includes the Balkans. This initiative, which points to the Silk Road as its historical basis, aims to revive the Silk Road in two main aspects: maritime and land routes. The land route extends from China through Turkey to Europe, while the maritime route, starting from China, encompasses the Indian Ocean, the Suez Canal, and European ports. The goal of the BRI is to connect East Asia, Central Asia, West Asia, Africa, and Europe to each other in terms of trade, with a desire for sustainable and balanced development in the countries along the route.
Especially the Balkan countries located on the transit routes of the BRI, particularly the land route, hold geopolitical importance for the realization of the project. Ultimately, passing through the Balkan countries to reach Europe will provide China with a wide market area spanning a vast geographical region. According to a news report dated 2021, 135 projects of Chinese origin have been identified in Balkan countries. The report further mentions that these projects have a total value exceeding 32 billion euros.[i] Within this framework, Chinese capital has made various economic investments in countries such as Greece, Montenegro, Bosnia and Herzegovina, Albania, North Macedonia, and Serbia.
The global economic crisis of 2008 is considered one of the factors that paved the way for Chinese capital to enter the Balkan region. It’s worth remembering that during a period when the aftermath of the breakup of Yugoslavia was still fresh, the Balkans faced an economic crisis and underwent significant changes. The process of Yugoslavia’s dissolution began in 1991 with Slovenia, Croatia, and Macedonia, followed by Serbia and Bosnia and Herzegovina in 1992, Montenegro in 2006, and Kosovo’s declaration of independence in 2008, completing the process. In such a dynamic period, the outbreak of the 2008 Global Financial Crisis had negative effects on the region. The crisis led to a significant decline in the growth rates of Balkan countries. These developments facilitated the entry of Chinese capital into Europe.
Albania is one of the important countries in the Balkans within the Belt and Road Initiative. Albania, with a history of alliances dating back to the socialist era, has found its place in the project. Increasing European influence led to the Communist ties between Albania, China, and Russia being severed. Within the scope of the project, the names of these two countries have resurfaced. Following the entry of Chinese capital into Albania, an investment of 384.6 million euros was made in the Patos-Marinza oil field in 2016. Additionally, the entire Tirana International Airport was sold to China. Subsequently, Chinese investments in Albania have shown a declining trend.
After 2016, there hasn’t been any Chinese capital investment in Albania. On February 22, 2023, during his visit to Tokyo, the capital of Japan, Albanian Prime Minister Edi Rama made remarks drawing attention to the situation between the two countries. Referring to the Belt and Road Initiative, Rama pointed out that there has been no tangible result from the 17+1 economic cooperation. However, he also added that Albania intends to keep channels of communication open with China, indicating the intention to stay engaged despite the official termination of commercial activities. This statement can be interpreted as signaling the end of formal bilateral trade relations.[ii]
Serbia is one of the Balkan countries where Chinese capital plays a significant role under the Belt and Road Initiative. Chinese capital finances 61 projects in the country with a total value of 18.7 billion euros. Chinese companies provided support of over 2 billion euros to a total of 16 projects between 2012 and 2021 and also extended 5.7 billion euros in credit. Serbia stands out more prominently compared to other Balkan countries. From 2009 to 2021, out of the 32 billion euros of Chinese capital, 10.3 billion euros flowed into Serbia. Additionally, Serbia signed the Bulgaria-Pozega Road Project worth 333.74 billion dollars with the Shandong International Economic and Technical Cooperation Group. The project, which began in 2014, was completed in 2017.
Although Serbia is a candidate for European Union (EU) membership, it does not hesitate to strengthen its ties with Russia and China. This has led to concerns about the country moving further away from the EU bloc. In 2023, negotiations between China and Serbia officially began regarding a free trade agreement. Due to the impact of the Ukraine conflict, Serbia has moderated its stance towards Russia, which has drawn strong reactions from the EU. This ongoing trend is seen as an increase in Eastern capital in Serbia.[iii]
The financing from China has facilitated road construction projects in countries like Montenegro and Bosnia and Herzegovina in the Balkans. Montenegro initiated a road project in 2014 through an agreement with Chinese capital. The agreement involved a $1 billion loan from the China Import-Export Bank, and contracts were signed with the China Road company and the Bridge Corporation for bridges. Additionally, the Shandong International Economic and Technical Cooperation Group continues its work on tram infrastructure in Bosnia and Herzegovina. Furthermore, the same Chinese company has signed contracts for two highway constructions in the Serbian Republic.
In conclusion, Xi Jinping’s “Belt and Road Initiative” announced in 2013 has had a positive impact in the Balkans. Chinese companies have invested in many Balkan countries within this framework. As seen in the example of Serbia, some Balkan countries have become closer to Eastern capital, particularly from China and Russia, rather than the EU. However, the situation is not the same for every Balkan country. As in the case of Albania, there are countries that have not received sufficient attention from Chinese capital. Additionally, the situation with Montenegro shows that countries that exceed their limits with loans often turn to Western capital as a solution. The overall picture suggests that China’s Belt and Road Initiative will continue to increase in importance in the Balkans.
Furkan DOĞDU
[i] “China in The Balkans: Controversy and Cost”, Balkan Insight, https://balkaninsight.com/2021/12/15/china-in-the-balkans-controversy-and-cost/, (Date of Accession: 29.07.2023).
[ii] “Albanian PM: No Economic Benefits from Chinese Cooperation”, Euro Activ, https://www.euractiv.com/section/politics/news/albanian-pm-no-economic-benefits-from-chinese-cooperation/, (Date of Accession: 29.07.2023).
[iii] “China Returns to the Western Balkans”, Emerging, https://emerging-europe.com/news/china-returns-to-the-western-balkans/, (Date of Accession: 29.07.2023).