Lost on the New Silk Road

Chinese immigrants in Belgrade

By Anna Russo

Novi Beograd is divided into blocks. Not the “walk two blocks then turn left” kind of block, but ordered cement divisions clearly visible from the window as a plane descends into Belgrade type. Blok 70 is one such division – differentiated from the architectural uniformity of the surrounding city by a garish red 7-0 popping out of a yellow circle. And just as Blok 70 diverges from the homogeneity of its surroundings, so too do the people it houses: a small community of Chinese immigrants, a visible minority against the backdrop of an 83% ethnic Serbian population.

Wang* was shuffling through photos of a toddler on her smartphone when I approached her stall in the Blok 70 Chinese Market, a Chinatown of sorts that is condensed into a labyrinth of wholesale stalls and a handful of food vendors. Wang sells cotton clothes, plastic toys, and other inexpensive, basic items. Besides me, there were no other customers perusing her merchandise.

“Nobody wants to buy at my prices,” Wang said in Mandarin. “They pick up the clothes, touch them, look them over. But in the end, they don’t buy.” Wang had been running the stall and living in Serbia for a few years, long enough for her daughter, the toddler on her phone, to spend her first three birthdays in China without her mother.

To the question of whether the sacrifice is worth it, she replied simply: “I want to go home.”

Wang moved to Serbia on her own, searching for economic opportunity. Ultimately, she says, she has found none. Her experience aligns with macroeconomic conditions: as a country with a projected stagnant 1% GDP growth rate for 2015 and unemployment stuck between 20-25%, Serbia is a clear opportunity downgrade from China. Regardless, Chinese people are moving to Belgrade in the tens of thousands, taking advantage of Serbia’s relaxed immigration procedures. Wang wants to go home, but others have set their sights on the rest of Europe and the potential economic benefits that the European Union can provide them and their children.

A future in the EU is not entirely out of the question. Zhang*, another shopkeeper in Blok 70, moved to Belgrade from Beijing 10 years ago, and her son now studies in Switzerland. Zhang explained that the rich people or their children make it to Europe and America, often on student visas, while the poor work for years to pay off the debt incurred when they bought their merchandise, hoping only to return home to China. But even for Zhang, whose vegetable stand had notably more traffic than Wang’s did, “quality of life here is lower than in Beijing.”

Political rhetoric tells a different story. In a December 2014 guest post in The Financial Times, Serbian Prime Minister Aleksandar Vučić writes: “The first character in the Chinese word for Serbia and Serbian is pronounced sai. It translates as ‘place of strategic importance.’” This claim of a budding strategic alliance is not unfounded – in December 2014, Belgrade hosted the third annual China-Balkans summit. In addition to strategic meetings, Belgrade has also attracted a $260 million investment in a bridge across the Danube along with two billion Chinese dollars in other infrastructure projects.

Chinese money in infrastructure is attractive for Serbia in their economic stagnation, but what strategic importance can the sai of Serbia be for China? China has invested in the Middle East and Africa to secure natural resources, but Serbia has neither oil reserves nor diamond mines. Its strategic importance lies in its location – adjacent to, and maybe someday a part of, the European Union. So could Serbia be the final doorway in China’s New Silk Road Project, a land route that would connect China to the European Union while circumventing Russia? China’s strategy remains unclear.

But China’s strategic interests may not by in the recipient country’s best interests. Even with Chinese money flowing in the form of infrastructure projects and CEE Equity Partners investments, a €1.5 billion fund owned by the Import-Export Bank of China and dedicated to projects in Eastern Europe, Serbia’s economy is stagnant.

Michael Kirby, the US Ambassador to Serbia, believes that Vučić’s political hopes “to reform our economy, create more jobs, raise the standards of our people, and give them hope that the future is something they can look forward to” may not come about as a result of Chinese investment. When a Chinese company takes over a project such as the $260m Danube Bridge, they fly in their own steel, concrete, labor, and “even cabbages for food,” Ambassador Kirby explained.
This creates an economic multiplier of roughly 1.5x rather than the 4x multiple of investment from the US and Europe. But a new bridge is better than an old bridge., and each new investment forges Serbia a new geopolitical connection.

Outside the realm of speeches and summits, however, strategy is irrelevant. Unemployment, the economy, and consumer demand are what matter inside Blok 70 and all the blocks surrounding it. Investments in bridges mean nothing when they do not spur demand for cheap cotton underwear. And what if the ease of Chinese immigration is part of some grand Sino-Serbian scheme?

Both Wang and Zhang have the same answer. As Zhang articulates it: “Yes, the government supports my decision to move here. But can they help me feed my family? Can they make people buy more clothes? No, the government is irrelevant.”

*Names withheld to protect the privacy of persons interviewed.

Anna Russo, 2017 is an Applied Math and Economics double major in Berkeley College. Contact her at anna.russo@yale.edu.