Belgrade’s Trojan Horse? China on Brussels' Border

When a global authoritarian superpower 8,000 miles away starts pouring investment into one of the most corrupt countries in Europe, a small landlocked state attempting to join your economic union, it should set off a few alarm bells. 

I imagine many of these same bells rang in the heads of the Trojans as they watched a great wooden horse arrive on their doorstep.

In January 2024, a Chinese firm finalized a deal investing €2.2 billion for renewable energy and a hydrogen production facility outside of Belgrade. This brings the total Chinese investment in Serbia to €20.9 billion since 2009, an especially large sum considering Serbia’s GDP of €58 billion. Though divided between public and private origins, even private investment begs scrutiny: the state-controlled nature of large Chinese firms means that even private investment takes on a distinctly government-associated flavor.

Serbia has an uncertain future. They have joined Poland and Hungary in concerns of democratic backsliding, and within Europe they maintain one of the worst cases of corruption. As far as Serbia’s EU relationship, to call it slow-moving would be an understatement (the EU changed the name of their candidate states’ yearly “Progress reports” to just “Reports” for a reason). Serbia has been in the accession process since it joined the “Stabilization and Association Agreement” in 2003, officially becoming a candidate in 2012. Since then, progress has been minimal, and in some areas, it is regressing. It doesn’t help that the continual conflict over the statehood of Kosovo (which five EU member states do not even recognize) has been a serious barricade towards accession progress.

Chinese goals in Serbia are believed to be twofold, but both facets revolve around China’s aspirations to become a regional competitor to the EU.

Most clearly, China sees Serbia as its economic route into the EU. In 2016, Chinese state-owned COSCO firm acquired a majority stake in Greece’s largest port, Piraeus, on the outskirts of Athens. This is one of the crucial pieces in the European branch of Beijing’s famous Belt and Road Initiative. Having secured a major port in Greece, the only state between China and mainland EU access is Serbia.

Taking this into consideration helps contextualize China’s investments in Serbia, which center around industrial development and, crucially: transportation. The cornerstone of these are high-speed rail and highway projects, most notably the high-speed Belgrade-Budapest rail line.

By building a route directly from the Mediterranean into the heart of the EU, China can support greater trade with the EU, and become a much more substantive regional competitor in both breadth and depth, accessing new markets as well as deepening ties with preexisting ones. 

This goal, in and of itself, is not particularly troublesome. However, the second set of goals could be more concerning.

Serbia is one of the most corrupt countries in Europe and still holds significant gravity over the Western Balkans. On top of this, Serbia’s longtime President Aleksander Vućić, who has led the nation’s ruling nationalist party for 12 years, first as Prime Minister and now as President, has been widely accused of democratic backsliding and authoritarianism. It is no secret that between weak rule of law and widespread corruption, of the billions of euros China is investing in Serbia, millions never make it to their destination, instead lining the pockets of politicians and greasing the palms of high-level businessmen along the way.

For Beijing, this could very well be part of the plan. 

Despite its issues with corruption, Serbia is one of the frontrunners for EU accession. The EU has shown a willingness to cut corners before, notably in its acceptance of neighboring Croatia, Romania, and Bulgaria, all of which were accepted while still having glaring deficiencies in the EU’s “Copenhagen Criteria” or accession standards. Romania and Bulgaria in particular struggle with corruption and rule of law as Serbia does. Even Bosnia and Herzegovina, a former Yugoslav Republic, was awarded candidate status after eight years, despite virtually zero progress toward the EU’s accession criteria.

Should Serbia be accepted to the EU, this could become a major concern. Unless the trends of corruption and democratic backsliding are reversed, the millions of euros skimmed from infrastructure projects into the pockets of Serbian elites could soon be put to work by Beijing, buying political and economic influence. Influence that could be used to steer EU policy from within.

We have already seen how powerful the spoiler effect can be with the case of Hungary and their ever-apparent sympathies toward Moscow. A second spoiler within the EU, one which Beijing could use to influence (or block) EU policy, would be an Achilles’ heel that Brussels cannot afford.

Maybe the influx of Chinese investment continues to corrode and corrupt Serbian politics and business. Maybe the EU, overeager to continue building the Union, compromises and prematurely welcomes Belgrade into the fold. Maybe the EU becomes one state less functional, Hungary becoming only the beginning of a larger EU crisis of cohesion.

Or maybe not.

Maybe Belgrade uses its Chinese investment to build infrastructure, industry, and modernize the country. With this could come democratization, Serbians demanding reform and democratic values (it wouldn’t be the first time they’ve done so). Maybe Serbia can weather the gambit of Chinese investment and become a regional leader, reinvigorating the Western Balkans on their similarly lengthy path to accession.

The EU needs to learn from the Trojans and take a hard look at the great Serbian horse on their doorstep: does it hold opportunity and promise for Belgrade and Brussels, or is it a vessel for Chinese influence and Serbian corruption?