China-Serbia cooperative leap from roads to robots

MA XUEJING/CHINA DAILY

Serbian President Aleksandar Vucic's visit to China from May 24 to 28 comes at a time when China-Serbia economic cooperation has become a central pillar of Serbia's development strategy.

During the talks with Vucic on Monday, President Xi Jinping said that against the backdrop of a new scientific and technological revolution and industrial transformation, the two sides should expand cooperation in emerging sectors such as artificial intelligence, the digital economy, green energy and advanced manufacturing to foster new growth drivers.

The two countries signed more than 20 cooperation documents covering areas such as trade and economic relations and technology.

These developments indicate the evolution of China-Serbia cooperation and will inject fresh momentum into it.

Nowadays, direct Chinese investments in Serbia have reportedly exceeded 7.2 billion euros ($8.35 billion), with the total value of infrastructure and economic projects, including loans, surpassing 14 billion euros.

This influx of capital has had a transformative impact on Serbia, impacting infrastructure, industry, employment and trade. China is now one of Serbia's two largest investors and a leading foreign trade partner.

Ahead of his visit, President Vucic highlighted artificial intelligence, robotics and new technologies as key areas of cooperation, marking a new phase in bilateral economic relations.

China-Serbia cooperation initially focused on infrastructure, particularly under the Belt and Road Initiative. Serbia, a landlocked country strategically positioned between Central and Southeast Europe, faced the problem of outdated transport corridors.

Chinese projects in roads, bridges, railways and energy facilities helped Serbia improve physical connectivity, strengthen links with regional corridors, expand production and attract investment. These infrastructure projects laid the groundwork for a broader economic agenda, reducing logistics costs and making Serbia more attractive for production and export.

The key question now is how to transform this infrastructure into industrial capacity, export growth and higher value-added production. The next phase of cooperation should be measured by how well connectivity supports manufacturing, technological upgrading and Serbia's integration into regional and global value chains.

This transition is already visible. Chinese economic engagement in Serbia has expanded into industries such as mining, metallurgy, rubber production and automotive components.

These manufacturing investments have a deeper long-term impact than infrastructure alone, creating employment, expanding exports and supporting supplier networks.

Serbia's industrial base, skilled labor and proximity to European markets make it an attractive destination for Chinese companies seeking to connect with European and regional supply chains. Notable industrial projects include Zijin in Bor, HBIS in Smederevo, Linglong in Zrenjanin, Minth in Loznica and Šabac, Xingyu in Niš and Yanfeng in Kragujevac.

Zijin's investment in the Bor copper complex has significantly increased copper production and strengthened the role of copper in Serbia's export structure. In 2018, the Serbian government accepted Zijin's offer to acquire a 63 percent stake in RTB Bor, with the total investment package valued at $1.26 billion.

Exporting raw copper ore has a limited effect on industrial development. But processing refined copper into plates, sheets or pipes creates higher value, requires more skills, supports related industries and strengthens the domestic industrial base. This is why the next stage of cooperation should focus on value-added production.

But a recent study shows that there is a shortage of skilled labor in Eastern Serbia and insufficient processing capacity, so a rapid shift toward an export structure based on processed copper products is unrealistic. A more practical strategy would be to strike a balance between raw material exports and processed copper exports.

A similar logic applies to the steel sector. The acquisition of the Smederevo steel plant by HBIS was a significant example of Chinese participation in Serbia's existing industrial capacities.

The steel plant was long plagued by unstable production and heavy losses. HBIS acquired the plant in 2016, reviving production and exports, and reestablishing the company as one of Serbia's most important exporters.

This shows that Chinese investment has not only created new projects, but also helped modernize Serbia's existing industrial capacities.

Another example is Shandong Linglong's tire plant in Zrenjanin, one of the largest Chinese greenfield investments in Serbia valued at 800 million euros.

Linglong started building its tire factory in Zrenjanin in 2019, showing that Serbia is not only a destination for acquiring existing enterprises, but also a potential production base for new capacities.

Alongside Linglong, investments by Minth, Xingyu and Yanfeng point to a broader trend of Chinese engagement in automotive components.

Though smaller than Zijin or HBIS, these investments are significant because they connect Serbia more directly with European automotive and industrial supply chains. This is especially relevant for Chinese investors.

If the first phase of China-Serbia economic cooperation focused on infrastructure, and the second on industrial production, the coming phase may go beyond traditional manufacturing and emphasize high-technology and innovation-oriented sectors.

Recent announcements indicate that robotics, AI, digitalization and advanced industrial technologies are becoming part of the bilateral agenda.

The cooperation announced with the Chinese company AGIBOT Innovation in humanoid robots is especially noteworthy. While relevant statements suggest that Serbia could soon become a base for the mass production of humanoid robots, Vucic also announced that a robot factory could open in a few months in Šabac. This would be a qualitatively new type of Chinese investment in Serbia.

The China-Serbia joint laboratory for green steel manufacturing, jointly launched by the HBIS Group and the University of Belgrade, shows that cooperation in traditional sectors such as steel can gradually move toward cleaner production, research cooperation and technological upgrading. It connects the older industrial pillar of cooperation with the newer priorities of sustainability, innovation and green transformation.

This initiative is important for Serbia because it diversifies cooperation with China, strengthens the country's export base and creates the possibility for deeper supplier linkages, technology transfer and skills development.

The strategic value of Chinese investment in Serbia lies in linking infrastructure, manufacturing and trade into a single development platform.

Roads and railways improve connectivity, but their full effect appears only when they support production, exports and industrial integration.

Mining and metals increase output, but their impact is greater when they move toward processing and higher value added. Greenfield investments create new jobs, but their importance depends on whether they become embedded in local supplier networks and regional value chains.

This is why the next phase of China-Serbia cooperation shifts from connectivity to productive capacity.

Infrastructure remains the foundation, but manufacturing is the test of maturity. If Serbia can use Chinese investment not only to build but also to produce, process, export and innovate, the cooperation will have a stronger and more sustainable effect on the country's development.