16.02.10

Following the same pattern applied in Asia and Africa, China is now seeking to expand its influence in the Balkans and eastern Europe by cooperating on major infrastructure and energy projects.

Serbia is to be the site for China's first multi-million euro infrastructure project on the European continent after Belgrade and Beijing signed a preliminary contract to build a much needed bridge over the Danube in the capital. With these investments and through a strategic partnership - signed last August when Serbian president Boris Tadic went to China - Serbia hopes to become China's gateway to the Balkans and Europe. "The interest coincides in the fact that Serbia, with its specific geostrategic position and geographic location, is an ideal place for China to spread (business) from here to the (Balkans) region and Europe," Olivera Kiro of the Serbian Chamber of Commerce said. "As a part of China's 'go global' strategy Europe has an important place and in that sense Serbia is a good choice" to start with, Kiro told AFP.

Serbia, the largest country in the western Balkans, has free-trade agreements with the European Union, Russia, Belarus, Turkey, as well as with members of the European Free Trade Association, or EFTA. "Many Chinese enterprises are interested in coming here," Ren Yi, economic and commercial counselor of China's embassy in Belgrade, told AFP. In October Serbia signed a preliminary contract with the China Road and Bridge Corporation for a 170-million-euro ($232-million) bridge over the Danube and construction is due to start in the second half of the year.

Most of the money needed to finance the project would come from the Chinese Exim bank through a preferential buyer's loan. Negotiations are ongoing and Ren said he expected them to be concluded by the end of the month. In addition, earlier this month Serbia signed another preliminary accord, this time with the China National Machinery and Equipment Import and Export Corporation, or CMEC, to overhaul two main power plants and build a new one. This second pilot project, worth 890 million euros, is also expected also to be financed by a Chinese Exim bank's loan to Serbian state-owned Electric power industry of Serbia, or EPS. "(Chinese companies) are looking if those first two projects will be successful and if everything goes smoothly, these two projects will set examples for the others," Ren said.

More infrastructure projects were under discussion, starting from ring roads near the Serbian towns of Sabac, Kraljevo and Kragujevac, to motorways, tunnels and a highway leading to neighboring Montenegro and its part of the Adriatic coast, according to the Serbian chamber of commerce. Vesna Arsic, Serbia's economy state secretary, stressed the longstanding political ties and friendship between Serbia and China, adding that the infrastructure investments were only the beginning of deeper long-term cooperation. "We advocate the benefits of launching production in Serbia in order to access a market of some 800 million people" in the EU, Russia and Belarus, Arsic said. "All this is an enormous market and any serious economic power will certainly look at Serbia (in light of) the possibility to enter this market first of all through establishing production in Serbia," Arsic said.