China overtook the European Union in terms of investments

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In the first half of 2022, the largest inflows of foreign investments were recorded from China in the amount of 491.5 million euros, from the EU 401 million, from the USA 56.7 million and from the Russian Federation 30.4 million euros

According to the preliminary balance of payments data of the National Bank of Serbia (NBS), during the first nine months of 2022, the inflow of foreign direct investments in Serbia amounted to 3.011 billion euros, which is slightly more compared to the same period of the previous year when 3.002 billion euros were invested.

“It is important to emphasize that after the temporary slowdown in the inflow of foreign direct investments during March and April, the positive trend from the record 2021 continued from May. Such developments confirm that the slowdown in the inflow was temporary and caused by the initial shock after the outbreak of the conflict in Ukraine. During this year as well, foreign investments in Serbia have been productively and geographically diversified, mainly in export-oriented companies”, according to the NBS.

When it comes to investments from the EU, China and Russia, we are talking about the most important destinations from which they come. Specifically, according to the published data of the NBS of Serbia, from 2010 to the second quarter of 2022, the inflow of foreign direct investments (FDI) from the European Union amounted to 19.204 billion euros, from China (including Hong Kong, Taiwan and Macau) to 3.281 billion, from the Russian Federation 2.473 billion and from the United States 733 million euros. Last year, FDI inflows from the EU were 1.762 billion euros, from China (including Hong Kong, Taiwan and Macau) 630.4 million, from the USA 105.6 million and from the Russian Federation 39.9 million euros.

Data on FDI inflows for 2022 by country are available as of the end of the second quarter and in the first half of 2022, the largest inflows of foreign investments were recorded from China (including Hong Kong, Taiwan and Macau) in the amount of 491.5 million euros, from the EU in the amount of 401 million, from the USA 56.7 million and from the Russian Federation 30.4 million euros.

“Given that a large part of FDI in Serbia is directed towards tradable sectors, most of the investments from these countries were concentrated in export-oriented companies, primarily in the processing industry and transport.” Also, a part of the investments from China and Russia was directed towards construction, and from the EU into the financial sector”, according to the NBS.

Bojan Stanić, assistant director of the Sector for Strategic Analysis of the PKS, says that China has emerged as the first investor and that it is creating a springboard for the future. China has a “Belt and Road” project that is global in nature and is building the infrastructure to support it.

“Before relations with the West were strained, China invested a lot in Britain and Germany. Since Serbia is not a member of the EU, and we have free trade agreements with the EU and Russia and a strategic partnership with China, they started investing in Bor, Smederevo, Zrenjanin… They would invest in other countries as well if they had the same approach as here. In our country, contracts are secret, while in Europe it is much more regulated”, notes Stanić.

He emphasizes that the EU is still the main investor if you look at the last three years, about 56 percent of all investments come from there.

“The United States of America has invested a little here, but it should be kept in mind that a lot of their investments come through the Netherlands because the tax policy is more favorable there. For example, NCR, which employs several thousand workers, is an American company, but it is registered as a Dutch company.

Russian investments mainly go through NIS. There was some talk about the arrival of a Russian trade chain, but that was stopped. “For the sake of comparison, Russian companies employ 2,000 workers here, and only German companies employ 40,000,” says Stanić, Politika writes.