Milica Radenkovic Jeremic
BBC journalist
Traditional, “steely” friendship, but now also traditional, “iron” debts.
From 2000 to 2022, Serbia received $7,7 billion from China, a huge portion of which was through loans, according to data from international organizations. AidData.
AidData, a research lab that tracks how governments spend money outside their own borders, published this October a comprehensive report on Chinese investments around the world.
For Chinese money in Serbia, analyzed in a special report, it is characteristic that the largest share is made up of loans for infrastructure projects, mining and energy, many of which are given on the condition that the projects use services or goods from Chinese companies.
Loans worth millions have raised the question of whether Serbia will be able to repay its debts.
“Serbia is not over-indebted to China in terms of the overall level of debt, but the rate of debt growth and the issue of its concentration towards creditors may be a signal for caution,” economist Nikola Stakić, a professor at Singidunum University, told BBC Serbian.
The largest single creditor is the Chinese state-owned bank – Export-Import Bank of China, according to which Serbia, latest data for September 2025, owes $2,8 billion, which is $45 million more than a year ago.
Globally, China borrowed more than $2 trillion worldwide from 2000 to 2023, double previous estimates, it shows. AidData report.
Money flowed to both poor and rich countries, with $200 billion flowing to America from Chinese state lenders.
Much of the lending to rich countries was directed at critical minerals and high-tech industries, which created fears in the West of Chinese dominance in key sectors and led some governments to tighten regulations to prevent the inflow of Chinese money.
“For many years we assumed that virtually all of China’s money was going to developing countries,” he says Brad Parks, CEO AidData, for the BBC.
“And so it was a big surprise for us when we realized that actually hundreds of billions of dollars were going to countries like the US, the UK and Germany, and it was all happening right under our noses.”
In a statement to the BBC in Serbian, Brad Parks explains that Chinese loans given to developing countries, a group to which Serbia belongs, are mainly directed towards infrastructure projects and are included in the public debt of countries.
“Chinese state-owned banks are major financiers of public infrastructure in transportation, energy, and industrial development in low- and middle-income countries.
“In contrast, Chinese lending to high-income countries is less focused on public infrastructure.
“In richer EU member states, Chinese state-owned lenders provide corporate loans, commercial bank financing, credit lines for Chinese subsidiaries in Europe, and lending that facilitates Chinese investment abroad,” he says.
Another difference is that investments undergo weaker control in Serbia than in EU member states.
“This can explain why Serbia has become one of China’s most important economic partners in the Western Balkans.”
“Serbia does not have the same restrictions and is therefore crucial for Chinese firms that want to operate near, but not within, the EU regulatory space,” says Parks.
Specifics of Chinese loans
Beijing considers details of its overseas investments – how much money it spends and where – a state secret.
In Serbia, loan agreements go through the parliament and are publicly available.
Analyze AidData However, it also shows the money that the Chinese state directed towards companies operating in Serbia, such as Zijin, the majority owner of the Bor Mining and Smelting Basin.
“It was more difficult for us to obtain data and documentation on Chinese grants and loans given to Serbian state institutions,” Brad Parks told BBC Serbian.
“Over time, Beijing’s overseas lending and grantmaking activities have become increasingly opaque,” Parks explains.
This can be seen, he continues, in the latest report on Chinese money in the world.
In terms of loans, the analysis states that borrowing terms for Serbia were more favorable than Chinese loans to other countries with similar incomes.
“The financial terms of credit arrangements in the case of Chinese creditors should be viewed as part of a broader mosaic, taking into account the overall strategic relations of the two countries, the structure of projects and Chinese investments, but also the political framework of mutual respect and friendship,” says Nikola Stakić.
“On the other hand, more favorable borrowing conditions do not mean that the overall economic arrangement is more favorable, because other elements need to be taken into account.”
As an example, it gives the payment amount interest rate, which he says is “pretty low”.
Mining rent is money that companies pay to the state for exploiting its mineral resources.
In previous years, mining experts have emphasized the low mining rent in Serbia, while Energy Minister Dubravka Đedović Handanović said that it is among the highest in the world, reported by Danas.
In addition to lower interest rates, there are other specificities of Chinese loans compared to loans coming from Europe.
Loans from China are more flexible and accessible to Serbia, and it does not have to go through complicated procedures, project documentation and everything that European banks require, says Stakić.
But the drawback is that there is no proper transparency, he points out.
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How did Chinese money come in?
Since 2010, the inflow of Chinese funds into Serbia has been increasing.
The peak was in 2019, when Serbia received $1,6 billion, of which $1,1 billion was a loan for the modernization of the railway from Novi Sad to the border with Hungary.
As part of this project, the reconstruction of the Novi Sad Railway Station was carried out, where a canopy collapsed in 2024, killing 16 people, which triggered a wave of anti-government protests.
The main contractor for these works was a consortium of Chinese companies. China Railway International (CRIC) i China Communications Construction Company (CCCC), while the subcontractors were both Chinese and domestic.
Companies on this project received and performed work by circumventing domestic regulations, based on the principle of friendly agreements, which is the basis for corruption, one of the conclusions informal Inquiry Commission that analyzed the reconstruction of the Novi Sad Railway Station.
The “friendly ties” between China and Serbia were, however, confirmed much earlier through official documents.
Serbia thus signed in 2009 Intergovernmental Agreement on Economic and Technical Cooperation in the Field of Infrastructure with China, which will become the basis for later work contracts on large projects.
This agreement was signed during the rule of the coalition around the Democratic Party (now the opposition), but was later supplemented with annexes during the rule of the Progressive Party.
For example, the second annex, adopted in 2013, provides that programs and projects “shall not be subject to the obligation to call for public tenders for the performance of investment works and the supply of goods and services, unless otherwise specified in the commercial contract”.
This means that the companies performing the work can be directly selected, which is generally not the case for domestic projects.
The beginning of millions of Chinese loans for infrastructure projects was the construction of a bridge connecting two Belgrade neighborhoods, Zemun and Borča, also known as Pupin’s Bridge (after the great Serbian scientist Mihajlo Pupin).
It was officially opened in December 2014 by the then Chinese and Serbian Prime Ministers Li Keqiang and Aleksandar Vučić.
Pupin Bridge was then described as the first major Chinese infrastructure project in Europe.
In addition to the Pupin Bridge and the modernization of the railway, Chinese loans were also used for the construction of highways such as Miloš Veliki, as well as the Kostolac B Thermal Power Plant.
Chinese state money also reached Zijin Koper (Zijin Copper) i Ziđin Majning (Zijin Mining), owned by Ziđin.
A controlling stake in RTB Bor was purchased, and later investments were made in technological improvements to the mine.
In total, around $525 million in loans were given, which AidData refers to as “potential public debt.”
This means that although the state of Serbia is not the recipient of the loan, nor is there evidence that it has provided state guarantees for these loans, there is a possibility that it could participate in its repayment, explains Brad Parks.
The mining complex in Bor, which primarily extracts gold and copper, contributes three percent to Serbia’s total gross domestic product.
In the event that the joint venture that runs the mine is unable to repay the Chinese debt, the Serbian government could help repay it because the company is important to the national economy, Parks explains.
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How much money did China give to Serbia?
When all is said and done, as of 2022, China was Serbia’s second largest development partner.
Ahead of it is the European Union with 10,3 billion euros.
However, while the bulk of this ten billion dollars of EU money is made up of grants, of the Chinese 7,7 billion, the total grant aid is 304 million euros.
AidData However, it also points out that in-kind contributions are not easily converted into money, which is why their monetary value is “probably underestimated.”
Among the donors, Zijin stands out, who invested in the fields of education, health, sports, as well as $730.000 from the Chinese state for the University of Novi Sad, where the Confucius Institute is located.
The majority of the loans, a total of 4,5 billion, are in repayment, while nine loans worth 250 million should have been repaid by now, the data shows. AidData.
The value of the loans that are repaid may be higher because for some of the loans AidData It said it found no data.
“What accompanies the international policy of Chinese creditors in developing countries (especially African and Asian countries) is a high level of so-called “hidden debt”, i.e. various arrangements that do not appear in official statistics.
“If even part of that is present in Serbia, it would mean that the official public debt does not fully reflect the real situation,” says Nikola Stakić.
Brad Parks, however, says that, according to their data, “Serbia’s exposure to hidden sources of public debt is relatively small, compared to other countries participating in the Belt and Road Initiative.”
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