In a landmark move to strengthen economic and diplomatic relations, China and Serbia signed a historic free trade agreement in October 2023. This agreement, the first between China and a Central and Eastern European country, is set to take effect in the coming months.
“The China-Serbia Free Trade Agreement is a significant step in implementing the consensus reached by the leaders of our two countries,” remarked a Chinese official. “It represents a pivotal achievement of the third Belt and Road Forum for International Cooperation.”
A Foundation of Strong Partnership
China and Serbia have cultivated a robust partnership over the years. Establishing a strategic partnership in 2009 and elevating it to a comprehensive strategic partnership in 2016, the two nations have collaborated closely in various sectors. The implementation of a comprehensive visa-free regime in 2017 further facilitated exchanges between the countries.
High-level interactions have been frequent, yielding remarkable results in infrastructure, energy, economy, trade, and tourism. Significant projects include the E763 highway, the Zemun-Borca Bridge, the Hungary-Serbia railway, and the acquisition of the Smederevo Steel Mill by HBIS Group. These initiatives highlight Serbia’s role as a focal point for Chinese investment in Central and Eastern Europe.
Deepening Economic and Trade Relations
In 2022, China became Serbia’s largest source of foreign direct investment. By 2023, bilateral trade surged to $4.35 billion. The new free trade agreement aims to further liberalize goods trade, with both countries agreeing to cancel tariffs on about 90% of tariff lines, covering approximately 95% of bilateral trade volume.
Over 60% of tariff lines will see immediate tariff elimination upon the agreement’s commencement, while other products will transition to zero tariffs gradually. This is expected to significantly boost bilateral trade.
China will enhance its exports of products such as new energy vehicles, photovoltaic components, lithium batteries, and communication equipment to Serbia. Conversely, Serbian products like beef, wine, nuts, generators, and motors will enter the Chinese market at more favorable prices. Both nations anticipate mutual benefits and a win-win outcome.
A European Example of Open Economic Cooperation
Amid calls from some Western countries for “de-risking” in relations with China, the China-Serbia Free Trade Agreement stands out as a valuable example of fostering an open world economy. It underscores the potential for cooperation and growth between China and European nations, reinforcing China’s commitment to collaborative development under the Belt and Road Initiative.
Reference(s):
China-Serbia Free Trade Deal: A Landmark of China-CEEC Cooperation
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