Chinese Foreign Minister Wang Yi made stops in Belgrade, Serbia, and Tirana, Albania, this week, seeking to further the Chinese government's "17+1" effort to promote trade and investment between Beijing and the countries of Eastern and Central Europe.

While Wang was received cordially in both countries, Serbia and Albania have taken somewhat different approaches to economic cooperation with Beijing through China's Belt and Road initiative, which has funded infrastructure projects throughout the developing world.

A stop in Greece on Wednesday and a scheduled stop in Italy on Saturday served as bookends to Wang's visit to the Balkans. The trip is widely seen as China's attempt to shore up economic ties in the region, which has traditionally looked more toward the European Union for development assistance.

Friendship 'made of steel'

In Serbia, officials presented Wang with a building permit for a stretch of railway from Novi Sad to Subotica, part of a larger project to modernize the railroad between Belgrade and Budapest, Hungary. The move reflects Serbia's relative openness to Chinese investment in the country.

Serbian President Aleksandar Vučić reiterated that Belgrade supports the "one China" policy, which considers Taiwan part of China. Wang, in turn, said Beijing respects the territorial integrity of Serbia, a signal that Beijing will continue to refuse to recognize the independence of Kosovo, which declared independence from Serbia in 2008.

Wang said the friendship between the two countries was "made of steel" and added, "Serbia is a country that has its own principles and that Beijing is proud to have such a friend."

Vučić said that Serbia and China are implementing joint projects worth 8 billion euros ($9.3 billion) and trade between the two countries has tripled.

Large Chinese presence

According to Bojan Stanić, the assistant director for analytics at the Serbian Chamber of Commerce and Industry, in addition to 1.5 billion euros ($1.73 billion) in direct foreign investment from China in the past five years, more than 20,000 people in Serbia work in Chinese-owned companies. Additionally, more than half of the suppliers of the Smederevo Ironworks, which is owned by the Chinese HBIS Group, a Chinese state-owned enterprise, are Serbian companies.

Serbia and China have had a strategic partnership agreement since 2009 and a comprehensive strategic partnership agreement since 2016. The latter involves more high-level meetings between both country's officials, and more extensive personnel exchanges. China is the dominant lender for road construction in Serbia. Beijing is also the owner of the Bor mining complex and the Linglong tire factory, which is under construction.

Extensive Chinese ownership of businesses in Serbia has raised concerns about compliance with environmental protection and working condition regulations in factories.

Chinese Foreign Minister Wang Yi, left, poses for a photo with Albanian Prime Minister Edi Rama in Tirana, Albania, Oct. 29, 2021.

Relationship unclear

Other concerns arise from the difficulty in understanding the relationship between Chinese firms and the Chinese Communist Party's security services.

Igor Novaković, research director at the Center for International and Security Affairs Centre – ISAC Fund, said it is not always clear where a company's commercial interest ends and the CCP's political interests begin.

"I do not claim that companies operating in Serbia are dangerous in themselves, but when there is a connection between politics and business, then there is a danger of using business decisions in favor of the political interests of the country from which investments come," Novaković said.

Belgrade visit

Wang traveled from Belgrade to Tirana Thursday, ahead of Friday's meetings with Albanian President Ilir Meta, Prime Minister Edi Rama, and Minister of Europe and Foreign Affairs Olta Xhaçka.

In Belgrade, officials have historically been much more cautious with regard to Chinese investment and lending.

"The truth is that serious doubts have actually been raised about Chinese funding following the experiences in some African countries and in the Balkans as the time comes for debt refinancing, that is, debt repayment and liabilities that have placed the governments of these countries in great financial difficulties," said Selami Xhepa, an economist and a member of the Assembly of the Republic of Albania.

"This has required some kind of renegotiation, or similar diplomacy, with the Chinese authorities," he added. "I think market discipline is better than diplomatic negotiations."

UN Security Council

Last year, Albania joined a group of nations, headed by the United States, that has shut out Chinese firms Huawei and ZTE from providing equipment essential to the rollout of 5G wireless service in the country.

Nevertheless, with Albania about to take a seat on the United Nations Security Council, of which China is a permanent member, experts saw Wang's visit to the country as an important opportunity to cement ties between the two countries and open dialogue about issues important to Albania. Among those issues is China's continued effort to block the recognition of Kosovo as an independent country, which Albania supports.

"China is a permanent member of the U.N. Security Council and it is necessary to talk about Kosovo, about Kosovo's accession to the United Nations, where China is a very big obstacle," said Besnik Mustafaj, a former foreign minister of Albania who now serves as president of the Council of Albanian Ambassadors. "It is time to say that there is no parallelism between Kosovo and Taiwan, that Albania recognizes only one China."