Given the hopelessly one-sided nature of China-Serbia trade, analysts doubt the proposed joint association of Serbian and Chinese companies will bring Serbia any real benefit.
Serbia’s National Council for Cooperation with Russia and China and the Chinese ambassador in Belgrade, Li Manchang, have pledged to support the establishment of a Chinese-Serbian association of companies.
However, many experts doubt that Serbia stands to gain much from it, unless the country greatly increases its volume of exports.
“There will be no benefit for Serbia until we find a way to increase our exports to China. This is not an issue of good will; it’s whether you have something to offer,” Milan Culibrk, economic analyst and editor-in-chief of the weekly NIN magazine, said.
“This [proposal] made me laugh a little bit,” said foreign investment consultant Milan Kovacevic, who scoffs at the National Council as an institution created for Serbia’s retired former President, Tomislav Nikolic.
The Council was created after the presidential elections in April 2017, in which Prime Minister Aleksandar Vucic stood as the Progressive Party’s candidate, replacing Nikolic.
At first threatening to run for President independently, Nikolic buckled after negotiations with Vucic. After Vucic’s victory in the elections, the National Council for Cooperation with Russia and China was formed in May, with Nikolic at its helm.
“It is completely unclear to me what the purpose of Nikolic’s institution is. I only see that they created [it] to appease him,” Kovacevic told BIRN, also questioning Nikolic’s qualifications for the job.
However, China’s ambassador Li told Nikolic at a meeting last Thursday that Chinese companies are interested in forming a joint association. Kovacevic, however, says this is just a payoff to Serbia for being “of perfect use” to China.
“We are the first country that accepts all of [China’s] perfect ideas – perfect for them, that is – which is to … loan Serbia credits at interest rates they define, and then pay their comapnies to build Serbian railways, bridges and roads,” Kovacevic said.
Culibrk agrees: “We keep listening that political and economic relations are great, but they all come down to Chinese companies coming here through some credit arrangements, which previously China approved to Serbia.”
Kovacevic added that if China needed an association to further this plan, they will push for it, the only question is whether Serbia “can afford to behave like this”.
“This is expensive to us, and I do not see how that would make a difference in how we are doing business with China thus far,” Kovacevic concluded.
According to the National Statistics Bureau, Serbia’s current economic cooperation with China is not delivering results.
The trade deficit has risen steadily every year since 2011, from 1.47 billion US dollars in 2011 to 1.58 billion dollars in 2016.
“When we look at the economic relations between Serbia and China, it is like an ant and an elephant, considering that Chinese imports dwarf … Serbian exports,” Culibrk says.
He adds that even Albania exports more goods to China than Serbia, whose politicians nonetheless brag about “strategic partnership” and claim to have drawn the largest number of Chinese investments to this part of Europe.
He believes that a Chinese-Serbian association will not bring about the arrival of new Chinese companies to Serbia.
“If they estimate that coming here pays off, they will come, association or not,” Culibrk concluded.
Source; Balkan Insight
