China-Serbia Forum: The U.S. Sanctions Drama Unfolds in Serbia

Everyone, I just attended the SC Forum. What exactly is this? “S” stands for sustainability, and “C” stands for connectivity—hence “SC,” short for Belgrade Star City. But “SC” is really just a cover; the real issue is China-Serbia cooperation. While the forum was underway, I heard the organizers say that the U.S. has specifically set its sights on this place, and it has even become a venue for covert rivalry. Hearing that really made me feel a bit uneasy. One of the forum’s key guests was Serbia’s Zijin Copper—Serbia’s largest foreign-owned enterprise, the company with the most Chinese investment in the country (accounting for more than half of total investment), and Serbia’s top exporter. So what’s going on with the U.S.? Just one day before the forum opened, they issued a “withhold release order” against Zijin Copper’s products—meaning U.S. Customs can detain the company’s goods upon discovery. What excuse is the U.S. using? They’ve got to have some justification, right? They claim that Zijin Copper engages in forced labor, and U.S. tariff laws prohibit the import of products made with forced labor. Under the guise of protecting workers’ rights, they are actually using compliance reviews as a political weapon. When put that way, it sounds like a robbery carried out by imperial decree. The U.S. is warning Serbia: “We know you’re in cahoots with China.” It’s a well-rehearsed tactic: they use an NGO called China Labor Watch to collaborate with local Serbian human rights organizations and provide various pieces of “evidence.” This is selective enforcement; the U.S. simply wants to force European automakers to decouple from the Chinese supply chain. The detention of Zijin Copper’s products has little impact on its business. The core markets for copper are Europe and China; very little is exported directly to the U.S., so the losses are minimal. However, the U.S. is doing this to tarnish Zijin’s reputation, damage its business credibility, deter downstream companies from partnering with it, and create friction in the supply chain. In China, if a company is sanctioned by the U.S., it’s a sign that it truly has clout. But this confidence stems primarily from our ability to retaliate; for other countries, there is still a very, very long way to go. Serbia’s mineral resources rank among the best in Europe. The Bor Basin in the east is home to a century-old copper mine, in which Zijin holds a 63% stake, and the company has also acquired the Peji Copper-Gold Mine in its entirety. In addition to copper, lithium—a key metal for the green transition—is also crucial. The Jadar Valley to the west is home to Europe’s largest lithium deposit, controlled by the Western-backed company Rio Tinto. Last year, the EU even designated it a strategic project in an effort to compete with China in the green industry. Currently, the EU has a Western Balkans Growth Plan in place, and this funding isn’t being handed out for nothing—it must meet 5G standards. The Jadar lithium mine even aims to compete with China for clients in the infrastructure sector. But by doing so, the EU is contradicting the very values it preaches daily, and many who firmly believe in those values will feel betrayed by the EU—how could it possibly hand over real money to Vučić? They’re furious. So Vucic’s strategic positioning is truly masterful: even though Serbia isn’t an EU member, it maintains rock-solid ties with both China and Russia. With everyone vying for its favor, it’s happy to play both sides to its advantage. Now that Serbia has a new government, its position has become even more unique. Logically, it should serve as a bridge through which both China and Europe can cooperate. This forum serves exactly that bridging role. I’m heading to the dinner tonight and will also be meeting with the Prime Minister—time to change clothes. Bye for now.