Shift in focus proving mutually beneficial
Updated : 2023-10-20
Experts and business leaders are confident that despite challenges posed by geopolitical tensions and sluggish cross-border investment sentiment, cooperation between Chinese and Serbian companies will remain resilient thanks to their complementary industrial structures.
In contrast to previous years, Chinese investments in Serbia have recently undergone a significant shift in focus. According to Pan Yuanyuan, an associate researcher at the Chinese Academy of Social Sciences' Institute of World Economics and Politics in Beijing, instead of primarily concentrating on mining and infrastructure development, there has been a notable pivot towards modern manufacturing and an emphasis on trade in services.
Hisense Group, an appliance and electronics manufacturer based in Qingdao, Shandong province, exemplifies that shift. The company opened its third factory for refrigeration appliances in Valjevo, a city 91 kilometers southwest of Belgrade, in mid-September. Hisense invested 45 million euros ($48.08 million) in the factory, which is poised to manufacture refrigerators catering to the needs of European markets.
The projected production capacity of the new facility is 750,000 appliances annually, and the combined annual production of the three operations is anticipated to reach 1.7 million units by 2025.
Han Jianmin, Hisense's CEO for Europe, said the new plant represents a significant investment and is a testament to the group's unwavering commitment to Serbia and the European market.
"Beyond our commercial pursuits, we strongly believe in contributing to the community that has warmly welcomed us and become our home," said Han. "Acknowledging our social responsibility, we have made significant contributions to enhancing the well-being of the local population." The new facility increases the number of Hisense employees in Valjevo to 2,750, over 10,000 in Europe and more than 100,000 worldwide, Han added.
Meanwhile, after investing $990 million in the construction of a tire manufacturing plant in the industrial zone of the Serbian city of Zrenjanin in 2018, China's Shandong Linglong Tire said the facility will achieve its planned production capacity by 2024 and aims to manufacture specialized-function tires by 2025. After completion of the project, the annual output of high-performance radial tires will reach 13.62 million units, with annual revenue of $600 million. The project has created 1,200 jobs for local residents.
The Yantai, Shandong province — based company said the establishment of a manufacturing base in Serbia greatly improves the timeliness of supply and service quality for automobile manufacturers in Europe and is conducive to getting close to the target consumers, constantly adjusting the company's product structure and increasing the proportion of high value-added products.
From the Belgrade-Budapest high-speed railway project to the Hebei Iron and Steel Group's plant in Smederevo, Zijin Mining Group's copper mine in Bor and Shandong Linglong's manufacturing center in Zrenjanin, the rich results of bilateral cooperation have brought benefits to businesses and people in both China and Serbia, said Fang Qiuchen, president of the Beijing-based China International Contractors Association, which helps Chinese companies secure business in overseas markets.
China Road and Bridge Corp, a Beijing-based State-owned enterprise, has been commissioned by the Serbian government to build wastewater treatment plants in 65 cities across the country. And China Construction Fifth Engineering Bureau, another State-owned enterprise based in Changsha, Hunan province, plans to deploy more resources to grab a greater market share of economies involved in the Belt and Road Initiative, such as Serbia, Croatia, Algeria, Pakistan and Thailand. It has expanded its construction projects to include rail networks, airports, highways, bridges and ports in more than 35 countries and regions.
Tian Weiguo, board chairman of China Construction Fifth Engineering Bureau, said the group plans to take hold of growth areas in global industrial chain transformation and market revitalization in order to participate in "new infrastructure" projects.
Unlike traditional infrastructure such as railways, roads and water conservancy, the concept of "new infrastructure" refers to critical facilities based on information technologies like 5G, artificial intelligence, the industrial internet and "internet of things" device networks that can connect and exchange data.