China was Serbia’s largest foreign trade partner last year and, judging by the announcement of Prime Minister Ana Brnabić, good cooperation should be confirmed by a free trade agreement by the end of this year.
They are also in the plan with Egypt and the Emirates, which indicates the need to look for new markets for Serbian goods in addition to European ones.
Brnabić stated at the “Kopaonik Business Forum” that the Government’s priorities in 2023 are to work on achieving three basic agreements on free trade with China, Egypt and the United Arab Emirates.
“I believe that we will reach an agreement on free trade with China, which I hope we will negotiate and sign by the end of this year, and that we will be even stronger there,” said the Prime Minister.
She believes that this will open additional space for trade exchange and exchange of services, but also for the influx of new technologies into Serbia. For her, she says, there is a special focus on artificial intelligence.
An important step by China and Serbia
In particular, our exports to China increased and, as our officials pointed out, it was 152 times higher than ten years ago. At the end of last year, it reached a value of 1.2 billion dollars, and in 2012 it was a modest seven million.
Compared to 2021, when we imported goods from China for 4.3 billion dollars, it was higher by about 500 million.
Commenting on the Sputnik plan presented by the prime minister, a good expert on the Chinese economy and Serbian-Chinese relations, foreign policy commentator Borislav Korkodelović says that such an agreement would be of great importance for our cooperation with that country.
He notes that China has 24 free trade agreements of which 16 have been signed and are being implemented.
They are in different stages of negotiations, and one of these is the one with the Gulf countries, which has been under negotiation since July 2004, which, he recalls, was especially discussed during the visit of Chinese President Xi Jinping to Saudi Arabia last December.
Sensitive matter
“In general, the negotiation of those agreements goes quite slowly because they are sensitive matters. This is also visible in the example of Serbia and China, where you have a medium-sized economy like Serbia and a partner like China, the first or second largest economic power in the world, depending on what criteria you use to measure it. It is an agreement that would bring significant gains to Serbia,” Korkodelović has no doubts.
He explains that the advantage is that domestic or foreign companies operating in Serbia enter a huge market of 1.4 billion inhabitants with a large middle class of at least 400 million people who want to have access to foreign goods, especially from Europe.
Our interlocutor, however, indicates that possible dangers should be avoided in the creation of those agreements.
“If you open the duty-free door wide to such a large economy, it can greatly influence the development of domestic companies. That is why these negotiations are long-lasting, sensitive and comprehensive,” noted Korkodelović.
High technology
Referring to the Prime Minister’s remark that the focus of the agreement, especially with China, would be the high technology sector, he believes that this is a great chance.
“Proposals concerning high technologies are one of the three topics dominating the current session of the so-called two sessions, one of the most important political events in China.
Because of the American threat, China will invest large amounts of money in high technologies, close to 200 billion dollars a year,” says our interlocutor.
He explains that China’s high-tech sector is in a huge boom and it will be even more so because China is almost forced to do so, because the US sees China as its main competitor in the coming decades and a kind of security threat due to strong economic development.
China, he adds, is practically the leading power when it comes to three-quarters of new high technologies, which was recognized by the Australian Institute for Strategic Policy, a scientific institution that many consider to be an extension of the military-industrial complex, primarily in the US and are anti-Chinese moody.
“They found that China is outperforming the US in 37 of 44 cutting-edge technologies that are thought to drive innovation, growth, military power, in the coming decades.” This is primarily about artificial intelligence, robotics, biotechnology, modern industry and quantum technology,” Korkodelović specifies.
Technological park
When asked how willing China would be to transfer new technologies to Serbia, which Prime Minister Brnabić especially hopes for, our interlocutor reminds us of the joint plans that have already been discussed.
“Since before, there has been an idea of developing a technology park near us along the banks of the Danube in Zemun. There is an example of Belarus, where Chinese companies have already established a technological park worth more than one billion dollars in which certain activities are already taking place.
“Huawei already has a long-term cooperation with higher education institutions in Serbia”, notes our interlocutor.
He believes that something like that could probably be achieved with other Chinese companies. There is also the possibility of meeting the needs of the numerous Chinese middle class, primarily in the area of the food industry and certain luxury goods , according to Korkodelović.
Difficult negotiations
The agreement on free trade with China became relevant after the meeting between Serbian President Aleksandar Vučić and Chinese leader Xi Jinping in Beijing at the beginning of February last year.
At that time, it was reported that the President of China instructed his Ministry of Trade to continue and quickly conclude talks on a free trade agreement with the Government of Serbia.
The Minister of Finance, Siniša Mali, then assessed that “difficult discussions and negotiations regarding the agreement ” await us, which will mean new jobs, new factories, new challenges, but also investments in new technologies, organizations, and management.
In 2022, compared to 2021, the value of exports of certain goods recorded an exceptional growth.
The export of alternating multiphase motors was worth nine times more, and electric motors were also exported from Serbia for the first time. Three times more copper ore and concentrate was exported, which is the largest item in our export. The list also includes beech boards, as well as 4.5 times more frozen beef.
Wheat is, first of all, what Serbia recommends for the large market of Egypt , as well as fruits and vegetables for the United Arab Emirates, which the officials of Serbia and these Arab countries have already discussed.
Sign up for business updates & specials.
