'Role for Serbia in China's Silk Road plans'

Beijing keen to build closer ties with Balkan state, which can play key role in boosting China trade links: Xi

SMEDEREVO (Serbia) • Serbia could play a significant role in Beijing's ambitious plan for a new "Silk Road" to boost trade with Europe, Asia and Africa, Chinese President Xi Jinping said yesterday.

Mr Xi said China was ready for more cooperation with Belgrade during a visit to Serbia that has seen his country strengthen its economic presence in the Balkans with more than 20 finance and infrastructure deals.

China's "One Belt, One Road" initiative, intended to open new trade links for Chinese firms as the domestic economy slows, envisages a new Silk Road from Western China to Central Asia and on to Europe via the Balkans, a region keen to attract Chinese investment.

Addressing workers and officials at a steelworks bought by a Chinese company, Mr Xi said: "We are developing the One Belt, One Road project... With its position and advantages, Serbia will have a significant place in this... This cooperation should be an example of Chinese cooperation with countries in southern and eastern Europe."

China's Hesteel signed a €46 million (S$70 million) deal in April to buy the Smederevo steelworks, a 100-year-old company that was part of US Steel during the early years of this century, before being handed over to the Serbian government.

SERBIA A KEY PLAYER

We are developing the One Belt, One Road project... With its position and advantages, Serbia will have a significant place in this.

CHINESE PRESIDENT XI JINPING

Hesteel chairman Yong Yu said the company plans to make the plant one of the most competitive in Europe.

European Union steel producers have complained that the purchase of a steelworks in an EU candidate country by a state-owned Chinese enterprise raises serious concerns about unfair competition from state-backed enterprises.

Serbian Prime Minister Aleksandar Vucic said there are ongoing talks with the Chinese on setting up a free trade zone at Smederevo, a city on the banks of the Danube, a short distance from Belgrade. Mr Vucic also invited Chinese firms to invest in Serbia's troubled copper and petrochemical industries.

Since China and Serbia signed a strategic partnership agreement in 2009, China has invested more than US$1 billion (S$1.4 billion) in Serbia, mostly in soft loans for infrastructure and energy projects.

On Saturday, Mr Xi backed Serbia's bid to join the EU. "China will support Serbia's effort to join the European Union," said Mr Xi, after talks with his Serbian counterpart Tomislav Nikolic in Belgrade.

EU membership is one of the Balkan state's foreign policy priorities.

After Serbia, Mr Xi travels to Poland. He will also visit Uzbekistan for a summit of the Shanghai Cooperation Organisation, a Chinese and Russian-led security grouping.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on June 20, 2016, with the headline ''Role for Serbia in China's Silk Road plans''. Print Edition | Subscribe