Serbia.
It hopes to join the European Union,
so it can enjoy the economic benefits.
But is also needs money now.
So it’s turned to China.
And that might not be the wisest choice.
Welcome back to China Uncensored.
I’m Chris Chappell.
Serbia.
You may not know where it is on a map,
but the Chinese Communist Party sure does.
It’s here, by the way.
In the Balkans.
Ok, that’s not super helpful.
It’s here.
You might sort of vaguely remember from the ’90s
that Serbia was part of the former Yugoslavia,
and then there was a war,
and NATO bombed everyone,
and something something.
Unless you weren’t born yet in the ’90s,
in which case,
don’t tell me,
because then I’ll feel old.
Anyway, Serbia is a country in Eastern Europe
with a complicated history.
And things are still complicated.
Some Serbians want to join the European Union
to enjoy all the financial benefits,
but the standards to get in are really high,
and other Serbians aren’t sure
whether they can even meet those standards.
In fact, there are so many forces pulling every which way—
that even the two-headed eagle on the Serbian flag
seems unsure which way to go.
And that’s when China showed up with billions of dollars.
The Chinese Communist Party has offered to make Serbia
the European heart of its massive Belt and Road Initiative,
also known as One Belt, One Road.
That’s the plan to spread Chinese investment around the world.
And this offer has put Serbia at a difficult crossroads.
It’s like, it’s Rush Week at your college.
One option is to try to join the honor society frat.
Sure it’s really hard to get into,
but girls really like going to their parties,
because all the guys are actually nice.
But there’s a curfew,
they won’t let you drink too much,
and they kick you out if you get bad grades.
And then there’s the “party” frat—
where there’s no rules,
no standards,
and the beer flows freely—
but everyone warned you to stay away
because things can get a little crazy
and you heard rumors about the time that Sri Lanka
woke up in a bathtub with a kidney and a port missing.
Anyway, Serbia is a long way from even
qualifying for the European Union frat.
For example,
they have massive environmental problems,
like a “trash mountain and toxic canals.”
Serbia’s two biggest cities
“dump raw sewage directly into the Danube and Sava rivers,”
the country has “countless unregulated landfills,”
and it “recycles only around 3 percent of its municipal waste.”
This is a far cry from EU standards,
which are to recycle 50 percent of municipal waste.
And according to this European Commision report card
on how close Serbia is to meeting the standards
for being allowed into the EU...
Let’s just say,
they’re not going to get on the honor roll yet.
There are plenty of areas for improvement,
including respect for fundamental rights,
rule of law,
transparency in government,
and market reform.
Serbia has officially been a *candidate* for EU membership
since 2012.
But its bad report card means that
the earliest it could get in to the EU is 2025—
and maybe not at all if it doesn’t shape up.
Still, there are benefits to being even just a candidate.
Thanks to the EU’s several
pre-accession financial assistance programs,
Serbia has already received over 4.2 billion dollars
in European grants—
money they never have to pay back.
The EU is also the biggest lender to Serbia,
with over 4.9 billion dollars in loans.
The trouble is,
the EU has conditions for their loans.
And it’s been pressuring Serbian politicians
to be transparent and play by the rules.
The Chinese Communist Party frat, meanwhile,
doesn’t care whether Serbia reforms!
And the cash has been rolling in.
“Investment in Serbia has reached
between 2.2 billion and 2.5 billion euros.”
That’s just under 3 billion US dollars.
Anyway, please continue.
“Direct investments to Serbia show that Serbia
is the center of cooperation between China
and Central and Eastern European countries.”
And the feeling is mutual.
“The distance cannot separate us,
so we can have more understanding.
China and Serbia will have a very profound relationship
and a very special brotherly bond.”
Xi Jinping gave that speech at the site of
Serbia’s only steel mill—
which a Chinese state-owned company
bought in 2016 for 52 million dollars.
Xi Jinping said he would make Serbia
the European hub of the Belt and Road infrastructure plan.
He suggested China would pour money into roads and railways
to connect China and Western Europe with a transport corridor
running through the heart of Serbia.
According to Vladimir Krulj,
former economic advisor to the Serbian government,
“Chinese companies have snapped up
critical industries in Serbia
such as a copper mine,
a steelmaker
and a thermal power plant,
along with high-speed rail lines,
roads and ports.”
But all that Chinese money pouring into Serbia
has European officials worried.
One concern is that quick and easy Chinese money
has caused a lot of Serbian leaders
to give up on making all those political and social reforms
they’d need to join the EU.
So it essentially undermines efforts
to make the country better for its citizens.
Another concern is that all this Chinese investment
could put Serbia into deep debt—
what’s called “debt trap diplomacy.”
We’ve seen it before in Sri Lanka,
Pakistan, and Djibouti.
Chinese loans come in,
but the country can’t repay them.
So then Chinese state-run companies—
or the Chinese military—
take over important strategic assets
in exchange for forgiving the debt.
As one overseas investment expert says,
“[China is] not in it to help countries out,
they’re in it to grab their assets.”
If that sounds dirty...it is.
He says China is purposefully
plunging recipient countries into debt,
then going after what’s in their dirt,
like minerals and rare earth metals.
Also there’s the danger that China’s investment
might target critical technologies
and strategic industries.
That’s a serious problem throughout Europe, actually.
So much so,
that this week the European Parliament adopted
an EU-wide mechanism to screen foreign investments,
most importantly from China.
The aim is to protect critical European industries
like aerospace, health, and nano-technology
from getting taken over by Chinese companies—
and undermining European security.
Vladimir Krulj —
the former Serbian economic advisor —
says “it would be daft not to support
[this new foreign investment policy],”
The problem is,
if Serbia were to adapt that,
it would disrupt some of China’s
current development projects there.
Which some people don’t want to do.
So Serbia is at a crossroads.
It needs money,
but it’s stuck between making reforms to join the EU,
or a Faustian bargain with China—
a bargain it has already begun to make.
And “By dithering over Serbia’s accession,” says Krulj,
“the EU is actually forcing Serbia into the arms of China.”
So maybe it’s time EU authorities consider
whether their frat’s Rush Week
that’s lasted since 2012
and pushes most students away
is really the best way
to build a strong fraternity.
So what do you think about Serbia
being stuck between a rock and a hard place?
Leave your comments below.
And while you’re here,
it’s time for me to answer another question
from a fan who supports China Uncensored—
through the crowdfunding website Patreon.
Casey asks:
“[Why have] american coin collectors
loved gold and silver pandas
seemingly more than any other foreign mint
since the late 90's?
They always trade at a slightly higher price
than the going rate for an ounce.
Could this be an example of a successful
soft power strategy by the CCP?”
Well, Casey, I assume you’re referring to
these Chinese panda coins.
Why do people like them?
I don’t know!
Why does anybody like pandas?!
“Oh, they’re so cute and cuddy.”
No they’re not!
They’re giant racoons that’ll rip your arms off
if they had the chance.
Or at least your jacket.
Anyway, all gold coins go for
a higher price than the metal itself.
Which is why physical coins
aren’t the best gold investment anyway.
They’re just a collectors’ item.
Are they Chinese Communist Party propaganda?
Yes, but only in the sense that pandas in general
are a propaganda symbol.
The Party uses them to make itself
look cute and cuddy,
but in the end,
they’ll rip your arms off.
Thanks for your question, Casey.
And I hope all of you can be like Casey
and support China Uncensored
through the crowdfunding website Patreon.
Casey supports this show by pledging
a certain amount per episode—
and you can, too.
Help us keep covering the kind of episodes
that expose China’s pandas
for what they really are.
Once again, I’m Chris Chris Chappell.
Thanks for watching China Uncensored.