Capacities for Development Serbia's Cooperation with China

Dimitrijević, Duško (2017) Capacities for Development Serbia's Cooperation with China. China-CEEC Institute Working Paper (4). pp. 1-14. ISSN 2560-1628

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Abstract

In the last two decades, in a time of transition and transformation of a planned economy into a free market economy, Serbia has almost lost its primary industry sector. In other words, the Serbian primary industry sector was largely "de-industrialized" although in the secondary and tertiary industry sectors maintained a certain vitality and development potential. Starting from the political changes of the 2000, Serbia catches up with other countries in the region in the most important aspects of the transition process. In this sense, foreign direct investments have a significant impact on the Serbian economy, by improving economic structure and giving it new competitive qualities, increasing access to international markets, serving as a resource for improving the balance of payments and helping to accept modern technology, knowledge and management. It gives real hope that Serbia with the help of foreign capital will be able to re-industrialize their production and to restore and develop its industrial capacity. Serbia sees China as the most important foreign trade and financial partner in Asia and as a major partner in achieving its strategic economic objectives. Lack of financial resources needed for realization of the planned economic development goals, enables China to invest own financial resources on favourable terms using the Serbian market openness and good mutual relations permeated with mutual trust and benefits. Given that Serbia has a huge need for the reindustrialization and economic development, China foreign investments, both “direct” and “portfolio” could be of primary importance. On the other hand, Chinese investments in Serbia can be a good test for the Chinese economy and its placement on other international markets, mainly to the EU market. Taking into account the appropriateness of mutual economic cooperation, it could be reasonably concluded that the Chinese investments in the Serbian economy can contribute to the achievement of common interest which in itself is a factor that contributes to the achievement of the Chinese development strategy of the "New Silk Road".

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