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Deconstructing the Sino-Serbian ‘Bridge of Friendship’: Discerning Dominant Chinese Logics and Geopolitical Implications

0 Comments 🕔14.Dec 2015

This article is part of our feature Re-imagining the Silk Road.

The Pupinov bridge in Belgrade. Photo credit: stefanogiantin.


by Graham Hollinshead

On December 18th 2014, a sense of pride was palpable in the Republic of Serbia as Prime Minister Vučić attended the opening ceremony of an imposing bridge over the river Danube, close to Belgrade. The structure, named after the late eminent Serbian scientist Mihajlo Pupin, physically conveyed a sense of renewal and rehabilitation for the  former Yugoslav Republic after the country’s  infrastructure was devastated by North Atlantic Treaty Organization (NATO) bombardments in the 1990s and economic sanctions from the West, lending it ‘pariah’ status within the international  community. According to Vučić, the construction of the Pupin Bridge signaled only the start of a massive program of infrastructural upgrading, with plans already in place for multi-million Euro investments into the modernization of roads, rail, telecommunications and energy in Serbia as well as neighboring South East European (SEE) countries.

Yet, amid the euphoria, the presence of Chinese Prime Minister Li Keqiang, standing alongside his Serbian counterpart at the opening event, offered an intriguing ceremonial clue as to the reality of the construction process. The Bridge had been far from an exclusively Serbian initiated and executed project, as the hyperbole surrounding it might have suggested. In fact, its construction had been the prime responsibility of the state-owned China Road and Bridge Company (CRBC), which commenced work on the project, the company’s first in Europe, in April 2011. The total cost of construction was €170 million, €145.5 million of which was funded by the China Exim bank in the form of a ‘friendly’ loan to the Serbian government to be repaid over 15 years at a 3% interest rate, while the Serbian government itself contributed 15% of total funding. Furthermore, the construction of the bridge was carried out by a mobile force of around 200 Chinese workers who had been attached to various overseas projects of CRBC, and who inhabited dormitories adjoining the structure for the duration of the project. Indeed, the Serbian contribution was restricted to the building of a 21.5 kilometer approach road, and related demolition work, with the Serbian headcount amounting to 47% of total workers employed.

A witness to the construction site could only be surprised, and perhaps alarmed, at observing this impressive example of Chinese civil engineering prowess in a remote location on the periphery of Europe. How could this extraordinary and concrete manifestation of Chinese involvement in the economy and society of a sovereign European state be explained?

In order to shed light on this question, it is necessary to understand the distinctive nature of Chinese Overseas Foreign Direct Investment (OFDI), the policy of ‘going overseas’ having been formally ratified by the Chinese Communist Party in the late 1990s. Bearing in mind its status as a ‘socialist market’ economy, it should be recognized that the ‘invisible hand’ of the State lies behind not only industrial organization in China itself, but also the region and sector specific trajectories followed by the handful of state-owned corporations permitted to invest and operate abroad. Indeed, following the universal condemnation of the Chinese state by the West following the Tiananmen Square massacres in 1986 and China’s subsequent isolationist stance in the global economic and political order, it is argued that the Peoples’ Republic placed developing economies at the center of its ‘going overseas’ policy, offering to assist in rapid industrialization and poverty alleviation through the mechanism of bilateral governmental accords (Mbaye 2010). Accordingly, in 2002, the sixth national congress of the China Communist Party endorsed the role of state-owned construction companies and exported manual labor in driving China’s internationalization agenda. It has been argued that Chinese OFDI was targeted towards countries with abundant natural resources but underdeveloped institutional arrangements, these conditions being associated with the ready accumulation of ‘rents’( Amaghini, Rabellotti, and Sanfilippo 2011).

In more recent years, the global reach of Chinese infrastructural projects has become more extensive, embracing numerous developing economies in Asia, Africa and beyond. Some observers of this phenomenon, undoubtedly stretching the facts to some extent, have referred to the emergence of a new ‘Chinese Empire’ or a ‘China Marshall Plan.’ Yet, insight into the institutional circumstances surrounding the generation of such Chinese OFDI may indeed prove disconcerting from a Western perspective. As has been authoritatively pointed out (Buckley, Clegg, Cross, Liu, Voss, and Zheng 2007), state-owned Chinese outward investors possess distinctive ownership advantages by dint of their patronage by home country institutions, and particularly by the State itself. As a result of ‘capital market imperfections,’ Chinese outwards investors may have financial resources available to them at below market rates for considerable periods of time, equipping them with disproportionate comparative and competitive advantages at a global level (Antkiewicz and Whalley 2006).

Serbian and Chinese flags over the Pupinov Bridge

Serbian and Chinese flags over the Pupinov Bridge. Photo credit: stefanogiantin.


It is of considerable interest, yet perhaps somewhat neglected by the Western media and in public policy circles, that Chinese OFDI has now reached a dependent economy on the periphery of the European Union. Undoubtedly, following the decimation of its infrastructure in the 1990s, and as a result of its continuing lack of significant economic progress, Serbia is receptive to injections of capital and regenerative assistance from ‘friendly’ external sources, particularly in the East. Indeed, the Socialist Federative Republic of Yugoslavia and The Peoples’ Republic of China have enjoyed political, ideological, and cultural independencies over a period spanning at least sixty years, dating from the communist regimes of Marshall Tito Broz and Chairman Mao. The latest article of diplomatic accord between China and Serbia, and one which elevates the status of the relationship between the two nations, is the Sino-Serbian Strategic Partnership, signed by the Presidents of the respective countries in 2009. This bilateral partnership agreement provided the formal basis for the construction of the ‘Bridge of Friendship,’ as well as initiating or consolidating further Chinese commercial interventions in the Serbian energy, auto manufacture, agricultural machinery and information technology sectors. The Partnership also provides Chinese companies with access to a free trade area of 800 million potential consumers by virtue of free trade agreements Serbia has entered with the EU, the Central European Free Trade Agreement (CEFTA) and the European Free Trade Association (EFTA).

On the surface, the provisions of the Sino-Serbian Partnership agreement appear to mutually offer vital strategic benefits to each of the signatories: Serbia receives much needed financial and technical assistance from a trusted ally on a preferential basis, while China gains valued access to Central European markets. Yet underlying the rhetoric of transnational friendship, a form of geopolitical leveraging is apparent, which also characterized the relationship between China and its African assistance recipients in the past. As Pavlićević (2011) has stated in researching the Strategic Partnership, Serbia is now bound to refrain from condemning China’s human rights record in EU forums and is to recognize the ‘One China Policy’ at the expense of Taiwanese independence. Given its status as an EU candidate country, the growing dependency of Serbia on China may lead to rifts with the EU on important matters of policy.

Furthermore, it is has been recognized that, given the aforementioned financial and politically- derived specific endowments enjoyed by outward investing Chinese corporations, they are prone to behave in an idiosyncratic fashion (Antkiewicz and Whalley 2006), to frequently turn a ‘blind eye’ to institutional fragilities in target destinations, and are prepared to tolerate extraordinary political risk. The tolerance of institutional ambiguity may have smoothed the flow of funding from Chinese banks into Serbian infrastructure, yet arguably broader institutional and regulative conditions should have been attached to such investments if the former Yugoslav Republic is to engage in necessary root and branch reform of governance systems as a precursor to real economic and political progress.

Focusing on ‘the Bridge’ itself, it is clear from sources close to the structure that the key drivers for its building were reputational rather than financial. Although the financial outlay from the Chinese Exim Bank will ultimately be recouped with modest interest, the most vital intangible asset realized by the inward-investing corporation is likely to be knowledge of how to operate in the relatively highly-regulated European environment. It would  follow Chinese ‘step- by- step’ logic that reputation-building and learning should occur first in the peripheral and ‘friendly’ SEE zones prior to more fully fledged migration of Chinese enterprise to the European heartlands. Undoubtedly, the constructor’s showcasing of the environmental friendliness of the civil engineering project, built in the precise area which had been subject to toxin release resulting from previous NATO bombardments, was a reputational ‘trump card.’

While the Chinese laborers attached to the Bridge were virtually ‘invisible,’ living in its shadow at a remote site outside Belgrade, their very presence and the conditions of their employment could well become a serious concern for trade unions in the sector, and for European Union policy makers in general, when such projects proliferate in the future. It is understood that the Chinese migrant builders were required to work 24/7 to ensure that concrete slabs were laid before setting, and clearly their segregated and detached work location rendered the application of health and safety regulations highly problematic.

In conclusion, it is pertinent to reflect briefly on the overall motivations underlying Chinese OFDI in Europe, although, to a certain extent, this is a speculative exercise. Firstly, ‘market seeking’ and ‘market creation’ overseas is vital for the Chinese economy given the possibility of stagnating demand for products and services at home. Secondly, ‘strategic-asset seeking’ involves the quest for reputational and intangible and learning related assets, which will assist China in its desire to ascend international value chains. Thirdly, the ability to leverage dependent economies’ goodwill in order to modify prevalent geopolitical agendas—for example, at the EU level—in China’s favor is significant. Finally, and perhaps disconcertingly from a European perspective, the pattern of Chinese funded infrastructure projects on the outskirts of Europe appears to assume a distinct geographical ‘shape,’ possibly paving the way for streamlined logistical infrastructures and transport corridors from China into the heartland of Europe.


Graham Hollinshead is professor at Hertfordshire Business School at the University of Hertfordshire, UK.


This article is part of our feature Re-imagining the Silk Road.


Amaghini, Alessio, Roberto Rabellotti and Marco  Sanfilippo, “China’s outward FDI; An Industry – level Analysis of Host Country Determinants.” Unpublished paper, CESifo Venice Summer Institute, “China and the Global Economy Post Crisis,” July 18, 2011.

Antkiewicz, Agata and John Whalley, “Recent Chinese buyout activities and the implications for global architecture,” National Bureau of Economic Research (NBER) 2006.

Buckley , Peter, L., Jeremy Clegg, Adam, R. Cross, Xin Liu, Hinrich Voss, and Ping Zheng, “The determinants of Chinese outward foreign investment,” Journal of International Business Studies, no. 38: (2007): 499-518.

Mbaye , Samou,“Matching China’s Activities with Africa’s Needs,” Chinese and African Perspectives on China in Africa, edited by Axel Harriet- Sievers, Stephen Marks, and Sanusha Naidu, 1-15. Oxford: Pambazuka, 2010

Pavlićević, Dragan, “The Sino- Serbian Strategic Partnership in a Sino- EU Relationship Context,” Presentation at Briefing Series, China Policy Institute, University of Nottingham, 2011.

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