Who is in fact Serbia's best external trade partner?

According to data from the Statistical Office of the Republic of Serbia, by September this year, Serbia imported the most from China, worth as much as USD 481.6 million, and its largest export partner was Germany – USD 363.6 million. China only appeared in the top five largest foreign trade partners in 2021, while Germany was in first place.

In 2023, trade in goods with the EU accounted for 60% of Serbia's total trade in goods, and China is Serbia's second largest trading partner, Europa reports. Although Serbia increased its foreign trade in goods by 3.9% in the first nine months of 2024, the growth in the trade deficit increased by 20.4% compared to the same period last year, according to the report of the Statistical Office.

Among its largest trading partners, Serbia recorded the largest deficit with China – as much as USD 316.5 million from January to September 2024. With Germany, with which Serbia annually exchanges the most goods, the deficit is USD 89.6 million for the same period. The most important foreign trade partners in September 2024 in exports are Germany, Bosnia and Herzegovina, China, Italy and Romania, while for imports they are China, Germany, Italy, Turkey and Poland.

In order to simplify trade, Serbia signed a Free Trade Agreement with China on July 1, 2024, which exempts about 60% of goods from customs duties. On the other hand, although the European Union allows non-member countries to more easily carry out financial transactions with the EU through the Single Euro Payments Area (SEPA), Serbia is still not part of SEPA. The biggest benefit of SEPA would be a significant reduction in commission costs. The National Bank of Serbia says that the process of harmonizing domestic banking systems with SEPA standards has been underway since 2014, and that the only thing that is waiting for is the green light from the European Union, reports Euronews. Bloomberg reports that the latest statements from the Serbian political leadership indicated that entry into SEPA could take up to two months compared to the originally planned deadline – January 1, 2025.

Who is the larger trading partner – the EU or China?

The Chamber of Commerce of Serbia states in the December edition of MAT (Macroeconomic Analysis and Trends) that "Serbia has found an alternative to subdued demand from the EU this year in the markets of China and Turkey. If this had not happened, in the first nine months we would not have had a growth in goods exports of 1.9%, but a decline of 1.9 (goods exports would have been lower by EUR 921 million)".

According to the same data, exports to China increased by 65% (from September 2023 to September 2024), and to Turkey by 80%.

When it comes to investments, the EU for You website states that the European Union has invested four billion euros in grants and seven billion euros in soft loans in the last ten years. On the other hand, according to data from the National Bank of Serbia, the total amount of foreign direct investment from China in the period from 2010 to 2023 amounted to EUR 5.5 billion.

The export value of the 15 largest exporters from Serbia in 2023 amounted to seven billion euros, of which a third of that amount was achieved by Chinese companies that sell copper, gold and steel on foreign markets, Bloomberg reports. Among these companies is China Railway International Co Ltd, which, together with China Communications Construction Company Ltd., worked on the reconstruction of the canopy in Novi Sad that collapsed on November 1, killing 15 people, and which, according to data from the Business Registers Agency, was the 19th most profitable company in Serbia in 2023.

Another Chinese company operating in Serbia is Linglong International, a tire manufacturing company based in Zrenjanin.