The Cost of Disengagement: How Serbia Became China’s Strategic Win in Europe

Xi Jinping and Serbian President Aleksandar Vučić. 2024. Source.

As global attention gravitates toward flashpoints like Ukraine, the Middle East, and the Indo-Pacific, a quieter but equally consequential contest is unfolding on Europe’s periphery. In the shadow of the great power rivalry between the United States and China, developing countries are left to navigate an increasingly complex international landscape, often without the benefit of sustained Western engagement. While conversations about the Global South typically evoke images of sub-Saharan Africa, Southeast Asia, or Latin America, one of the clearest illustrations of what happens when transatlantic focus wanes lies not far from the heart of Europe. In the southeast corner of the continent, Serbia, a country that sits both geographically and politically between East and West, has emerged as a testing ground for influence, diplomacy, and strategic alignment. Here, in a nation seeking to balance its aspirations for European Union membership with growing ties to China and Russia, the consequences of geopolitical neglect are playing out in real time.

Serbia: A Strategic Gateway

Zooming in on Serbia, a landlocked nation of seven million in the heart of Southeast Europe, can provide a great insight into results of Chinese global outreach. Far from the Indo-Pacific or African corridors where China’s global ambitions are most scrutinized, Serbia offers a compelling, if underexamined, window into how Beijing’s overseas agenda is taking shape. Over the past 15 years, the country has emerged as one of China’s most active European partners, embracing infrastructure development financed through preferential loans, welcoming billions in foreign direct investment, and, more recently, signing a free trade agreement with Beijing. But what began as an economic courtship has since evolved into something far more expansive. Today, the China-Serbia relationship touches nearly every domain, from political alignment and cultural exchange to security cooperation and digital infrastructure. This transformation is not solely the product of bilateral ambition that happens in a vacuum. It is also the result of shifting geopolitical currents and economic asymmetries, dynamics that extend well beyond Serbia and offer broader lessons for how developing and transitional countries are recalibrating their foreign policy in a divided and distracted world.

Serbia, a candidate for European Union membership, occupies a unique and often misunderstood position on the geopolitical map. Its modern political trajectory diverges sharply from that of many of its Eastern European neighbors. Where former Soviet-bloc countries experienced largely peaceful transitions from communism, Serbia, at the time a constituent republic of Yugoslavia, was thrust into a decade of violent conflict during the federation’s collapse in the 1990s. As Yugoslavia disintegrated, Serbia emerged as a central player in the wars that followed. The last phase of the conflict ended with the NATO intervention in 1999, justified by crimes committed by Serbian forces in Kosovo. The following year, Slobodan Milošević was ousted, and a new government pledged a pivot to the West. While the government proclaimed a commitment to democratic reform and Euro-Atlantic integration, the scars of the conflicts and the feeling of antagonism towards the West just began to develop. Therefore, while Serbia is not a country that has had a history of colonialism, nor was it impacted by the period of global imperialism, bombing of the country and territorial losses created a feeling like the one in those societies.

While at the beginning of the millennium Serbia appeared ready to join the European mainstream, momentum proved fragile. In 2008, just as the global financial crisis was gathering force, Kosovo unilaterally declared independence with the backing of the very Western allies Serbia hoped to join. The move not only reopened deep national wounds but also exposed the limits of Serbia’s pro-Western trajectory. In response, Serbian leaders began to recalibrate. EU membership remained the formal objective, but not at the expense of severing ties with partners in the East. Russia, long seen as a historical ally, retained importance. But it was China, still in the early stages of its global ascent, that seized the opening. Over the next decade and a half, Beijing would cultivate a deep and multifaceted relationship with Serbia, using it as a strategic foothold to project influence deep into the European continent. By 2016, the partnership between China and Serbia had matured into a carefully cultivated alliance, formally marked by the signing of a comprehensive strategic partnership agreement. That same year, President Xi Jinping visited Belgrade, a highly symbolic move that signaled China’s growing interest in deepening its influence. From that point on, the bilateral relationship began to expand at a rapid pace. Serbian political leaders became frequent visitors to Beijing, and economic cooperation continued to intensify, reaching levels previously unseen between a Southeast European state and the Chinese government.

For Serbia, this deepening engagement provided not only capital but also political validation. Faced with limited access to Western financial institutions, often burdened by complex bureaucratic processes and strict conditions, Belgrade turned increasingly to Beijing for support. Chinese financing allowed for the swift implementation of long-delayed infrastructure projects that were crucial to Serbia’s development narrative. Roads, railways, and bridges funded by Chinese loans began to reshape the physical landscape of the country. These projects were often accompanied by the establishment of Chinese-owned factories and industrial facilities, embedding China’s presence in Serbia’s economy and labor market. The economic bond reached new heights in 2021 when China became Serbia’s largest single source of foreign direct investment. Annual Chinese investment surpassed one billion dollars every year from 2022 onwards, reinforcing the depth and scale of Beijing’s economic role in the country. The momentum carried into 2023, when Serbia and China signed a Free Trade Agreement, which came into force in July 2024. This agreement removed barriers to trade between the two sides and further accelerated the flow of goods, capital, and political goodwill.

Xi Jinping’s second visit to Belgrade in May 2024 underscored the strategic and emotional dimensions of the partnership. His arrival on May 7, the 25th anniversary of the NATO bombing of the Chinese embassy in Belgrade, was no coincidence. The embassy bombing remains a potent symbol of perceived Western aggression in Chinese political memory, often cited as a turning point in China’s foreign policy posture. Xi’s presence in Belgrade on that anniversary was widely viewed as a deliberate act of remembrance and solidarity, aimed at both honoring the past and projecting China’s role as a reliable partner on the global stage. During that visit, Serbia became the first European country to formally join China’s “Community with a Shared Future for Mankind,” a diplomatic initiative that seeks to redefine the norms of international cooperation around principles such as mutual respect, sovereignty, and non-interference. This move signaled a further alignment of values between the two countries and a shared vision of a multipolar world in which Western influence is no longer taken for granted. For China, Serbia served as a model of how sustained investment and diplomatic engagement could lead to lasting influence in Europe. For Serbia, the agreement represented another layer of strategic partnership at a time when its relationship with the European Union remained uncertain and ties with Transatlantic communities were scarce.

The alliance also extended into the political and ideological realm, particularly regarding sensitive questions of territorial integrity. Both countries have long-standing territorial disputes that shape their national identities and foreign policy strategies. China has refused to recognize Kosovo’s 2008 declaration of independence, supporting Serbia’s position in international forums. In return, Serbian officials have offered Beijing unflinching support on the issue of Taiwan. President Aleksandar Vučić has repeatedly stated that Taiwan is an internal matter for China and has gone so far as to describe its position towards the question as an issue that should be resolved however Beijing wants to resolve it.

Geopolitics of Vulnerability and Influence

The deepening partnership between Serbia and China offers a revealing case study of how Beijing capitalizes on a complex blend of historical grievance, economic aspiration, and political vulnerability to expand its global influence. In Serbia, anti-Western narratives rooted in the legacy of NATO’s 1999 intervention continue to resonate across segments of the political elite and broader public. These sentiments, coupled with a pressing need for economic development and a political system that still struggles with transparency and institutional checks, have created fertile ground for China’s engagement strategy. While such an approach is consistent with the pursuit of national interest on the global stage, it also serves to marginalize the influence of actors who view China as a strategic competitor.

Serbia is not an isolated example. Countries on the very periphery of the transatlantic sphere of interest increasingly find themselves in similar positions. The Western Balkans are not only economically and institutionally vulnerable but are also critical to the security architecture of Europe as well as the broader community of liberal democracies. The question that emerges is not only whether China’s role in this region should be contested, but whether the transatlantic community is still willing and able to do so.

The broader international order, which has been largely shaped by Western liberal democracies since the end of the Cold War, is now under active revision. In this new landscape, countries like Serbia that have yet to fully consolidate democratic institutions are especially susceptible to external influence that promises immediate rewards. The allure of financing that comes with no rigorous oversight, no stringent environmental or labor protections, and no conditions tied to good governance is powerful. In the absence of credible alternatives, such engagement can displace long-term development goals and erode already fragile democratic norms.

This trend is further supported by the repositioning of the United States and its recalibrated approach to global outreach. Recently, Washington has reduced or restructured key development aid programs that once served as a cornerstone of its soft power strategy. The lack of consistent investment in international development creates a vacuum that Beijing is increasingly well-positioned to fill. Without a robust and visible U.S. presence offering meaningful alternatives, Chinese influence across the Global South is likely to expand uncontested. This not only gives Beijing greater leverage in shaping global norms and standards but also challenges the credibility and relevance of the democratic model that the United States has long championed.

The Retreat of the United States and Its Consequences

It is essential to acknowledge that many developing and transitional countries remain dependent on international assistance. Faced with structural inequalities and under-resourced public sectors, they are often compelled to pursue whatever support is most accessible, regardless of the source. In this context, China offers what appears to be a fast and uncomplicated route to progress. Yet, the long-term consequences of such choices are often profound, locking countries into corrosive financial arrangements, weakening public accountability, and shifting the balance of political alliances.

To counteract this trend, the international community must consider how to offer viable alternatives. Providing lower-barrier access to development support is one such strategy. Historically, the United States has played a central role in this process. In moments where countries have stood on the edge of backsliding or instability, U.S. assistance has often served as both a buffer and a bridge, one that helped preserve democratic institutions while enabling growth rooted in fairness and rule of law. The lack of it could easily backfire. And the harm could be multifaceted. From democratic decline in the developing countries, to increased security challenges for the U.S. and its partners. Therefore, while it is logical that each and every actor in the sphere of international relations are putting their interest first, the ones that have had a power to shape the very platform have been the one that have provided enough resources to the ones around it, and it looks that cards are set for China to do this without contest in the upcoming period.

(Editor: Nick Zeller)

The views expressed in this article represent those of the author(s) and not those of The Carter Center.