Powering the ironclad friendship
Sustained China-Serbia partnership hinges on energy and finance, not industrial equipment
When Serbian President Aleksandar Vucic visited a “future factory” in Jiaxing, Zhejiang province, on May 27, the images that went viral were of the machines — a humanoid robot writing Chinese calligraphy, another mixing drinks, four-legged units clambering over obstacles, while production lines ran on their own. Vucic, by his own account, felt as if he had stepped into the 22nd century, and the footage earned the attention it deserved. But the consequential part of his state visit was harder to photograph. It lay in the investment agreements, the energy projects and the quieter financial arrangements signed around the spectacle.
This year marks the 10th anniversary of the China-Serbia comprehensive strategic partnership, and the relationship has clearly outgrown its first phase. For most of the past decade, cooperation was built on heavy infrastructure and traditional industry projects such as the Budapest-Belgrade railway, the Smederevo steel mill and the Bor copper complex, which mattered, and, in many ways, still matter.
China is, by now, Serbia’s largest source of foreign direct investment, with cumulative Chinese investment reported at more than 7.2 billion euros ($8.33 billion) and the total value of Chinese-backed projects, loans included, above 14 billion euros. Yet the questions now facing both sides are different ones. Serbia wants to move up the value chain, decarbonize its economy and stay on its long path toward European Union membership. China, in turn, is looking for durable, high-quality outlets for its capital, its technology and its clean-energy industries. In their talks in Beijing, both sides agreed to widen cooperation in emerging sectors, with green energy and advanced manufacturing high on the list. Sustainable energy, and the financing that is needed to support it, falls almost exactly at the intersection of those two agendas. That, more than the robots, is why it deserves attention.
Energy is where the structural shift is easiest to notice. Serbia still leans heavily on coal, which supplies more than half of its installed power capacity, and it is committed to ending coal-fired electricity generation by 2050 while pushing renewables toward roughly half of its mix by 2030. That is a very large gap to close, and it will not be closed cheaply. Chinese capital has already begun to fill part of it. Zijin Mining and Shanghai Fengling Renewables, for example, have committed around 2 billion euros to developing 1.5 gigawatts of wind, 500 megawatts of solar and a green-hydrogen facility, much of it meant to power the Bor copper operations rather than simply feed the national grid. Other Chinese companies have signed up for solar-module manufacturing, energy storage and additional wind farms. Put together, these projects mark a change in the character of the partnership: from China helping Serbia build power plants and steel mills to China helping Serbia build the renewable base it will need next.
Energy hardware, though, is only half the story, and arguably the easier half. The harder question is financial. The model under which Chinese investment flowed into Serbia over the past 10 years relied largely on state lending and engineering-procurement-construction contracts tied to individual projects. That model suited roads and bridges well enough. However, it suits a clean-energy transition far less, because such a transition depends on long horizons, predictable returns and patient capital rather than one-off construction deals. What Serbia needs now, and what would make the cooperation more durable, is a financial architecture designed for sustainability in the financial sense too: green bonds, long-term project finance, blended public and private vehicles, and clearer environmental and disclosure conditions attached to the money itself. Some of the groundwork is being laid. The free trade agreement that took effect in 2024 has helped lift bilateral trade to $6.48 billion in 2025, up 13 percent year-on-year, and the two governments have moved to set up a renminbi-clearing bank in Serbia and to widen local-currency settlement. These can sound like technical plumbing. In practice, they are part of what allows energy and industrial projects to be financed, hedged and scaled without relying entirely on a single channel of state credit.
This is also where a whole-industry view helps, rather than treating energy as a sector on its own. The investment agreements signed around Vucic’s visit, worth about 953 million euros on Serbia’s own part, ran across auto parts, robotics, artificial intelligence and energy, and were expected to create around 1,650 jobs. Chinese clean-tech sectors, from solar modules to batteries and electric vehicles, are placing more of their production units inside Serbia, and that production will increasingly run on locally generated renewable power. If it works, it forms something of a loop: clean energy supports green manufacturing, and green manufacturing creates demand for still more clean energy. For Serbia, which sends most of its exports to the EU and now faces the bloc’s carbon border levy, producing more cleanly is not only an environmental preference, but increasingly, a competitive necessity.
None of this happens on its own, and the work ahead should not be underestimated. Serbia’s EU accession path means its energy and industrial choices will be measured against European environment, competition and disclosure rules, and the carbon border adjustment mechanisms will increasingly reward genuinely low-carbon production, regardless of where the capital comes from.
In many ways that plays to the strengths of the China-Serbia partnership. Chinese clean-energy technology is among the most cost-competitive in the world, and pairing it with high environmental and disclosure standards would let Serbia treat compliance as an advantage rather than a burden. The cooperation will be most durable, in both meanings of the word sustainable, where the green content keeps deepening: financing tied to clear environmental benefits, projects built to the standards Serbia needs to meet in Brussels, and gains that reach local communities. These are demanding goals. They are also, arguably, where the real value lies.
The robots in Jiaxing were a fitting symbol of where the relationship wants to go. But symbols work best when they rest on solid structures. The less glamorous work, aligning energy projects with a financial system built for the long term and making sure the green content runs all the way through, is what will let sustainable energy anchor the next decade of cooperation, much as steel and highways anchored the last. If this visit is any guide, both sides look ready to do exactly that.
Lu Jiajun is a researcher at the Academy of Financial Research at Zhejiang University and an assistant professor at Zhejiang University International Business School. Ding Yuzhou is the section chief of the Investment Promotion Section at the Administrative Committee of Hangzhou Linping New City Development and Construction.
The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.
Contact the editor at editor@chinawatch.cn.
