Chinese investment in the Balkans leaves a trail of controversy

China’s decade-long investment campaign in the Western Balkans has produced a wellspring of pushback. In order to document this broad-based backlash, Just Finance International has created a map tracking the rising number of court cases and public protests across five countries.

In 2014, Chinese leader Xi Jinping announced plans to include Europe in his signature global trade and infrastructure project, the Belt and Road Initiative. Since then, countries in the Western Balkan region, in particular, have secured hundreds of Chinese investments,  aimed at improving everything from communications and energy networks to additional employment opportunities.

Yet beneath the official pronouncements and publicity campaigns, many of these investments were not as warmly received. On the contrary, much of the activity has resulted in fierce public backlash and long-lasting legal battles.

JFI has conducted a rigorous mapping of the protests and criminal complaints against Chinese  investments in Serbia, Montenegro, Bosnia & Herzegovina and North Macedonia between 2014 and 2024. In total we found more than 100 cases questioning the legality and ethics of the investments. An even greater number of complaints have been filed against the local and national governments, which often support or are aligned with Chinese investments, but they have not been included in this mapping.

Our map indicates that China’s development campaign in the Western Balkans comes at a high cost for human rights, transparency and the environment, with particularly strong consequences for the climate. In many countries, local and national politicians appear to have skirted or minimized important regulations in order to encourage capital inflows and achieve economic growth targets.

Frequently, developers have rushed to begin construction work even before fulfilling the relevant  legal requirements, including submitting public tenders, spatial plans, relocation plans and their crucial environmental impact assessment. A majority of the legal complaints covered in this  map are focused on such breaches of the national legislation.

Across the region, local communities have borne heavy tolls from the implementation of these development projects. In many jurisdictions, local residents have suffered from excessive  air pollution, land confiscations, inadequate or entirely absent land compensation, and other severe impacts on their lives and livelihoods.

To date it is not clear how many of the filed complaints may be rejected by the courts, or actually lead to meaningful convictions. Many cases have dragged on for multiple years, incurring high costs for the involved parties.

In some cases the Chinese investor has been convicted and fined by a Serbian court. But the amount the company had to pay was low and it did not hinder them from continuing to breach the local legislation. This happened for example on several occasions in Bor where Zijin mining is operating a large scale mining and smelting complex. 

However, the number of criminal complaints does provide a clear and incontrovertible signal that many Chinese investments—as well as their mismanagement by local governments—are provoking fierce opposition and lengthy efforts at resistance from affected communities.

Energy, mining, and infrastructure projects account for the majority of Chinese investments in the Balkans, with projects in these sectors also generating the most complaints since 2014. All participating companies require an approval from the Chinese state to be able to participate in the Belt and Road initiative – a process which increases secrecy and devoid any public consultation.

Some of the Chinese companies may also cause a security concern for the Western Balkan countries. For example the company AVIC is a big producer of arms with direct links to the People’s Liberation army (PLA). AVIC, and several other Chinese investors are also sanctioned by the United States.

Our mapping also includes cases in which Chinese workers, relocated to the Western Balkans by the involved investment firms, are protesting against poor working conditions, living standards and insufficient payments. Among these is a case of forced labour of foreign workers from the construction of the LingLong tire factory in the city Zrenjanin. 

An overview of the most disputed investment projects in each of our five mapped countries can be found below. 

Serbia:

As the Western Balkan country with the largest capital inflow from China, Serbia leads our mapping with the highest number of criminal complaints and public protests. In total, JFI identified 52 complaints or protests in the country since 2014.

The single most disputed Chinese investment project in the country is the mining and smelting complex in Bor and Majdanpek in northeastern Serbia. The copper mine, which is the biggest in Europe, was taken over by China’s Zijin mining in 2018. The company then tripled the production, which has led to the increasing amount of protests and criminal complaints. 

Among other things, allegations against Zijin mining include: 
– pollution of the water, air, soil;
– illegal displacement of villagers during expansion of the mining pits;
– illegal demolition of a mountain peak;
– breach of workers rights;
– construction of facilities without a working permit or environment impact assessment studies. 

Other investment that has resulted in multiple complaints is illegal expansion of the Drmno coal mine in Kostolac and the construction of the Linglong tire factory in the city of Zrenjanin.

In 2021, a local journalist disclosed the deficient living conditions of 400 Vietnamese migrant workers in an old abandoned industrial area outside Zrenjanin. The workers were found shivering in the freezing barracks without heat, sufficient food and money. The workers said that their employer had taken their passports.

This incident led to two criminal complaints, a resolution from the European parliament as well as public pressure on the Serbian Ombudsperson to  better manage the issuance of work permits for migrant workers. China’s investment in the Linglong tire factory also generated criminal complaints related to illegal construction of production facilities and endangering the health of the citizens.

Another controversial Chinese investment  is the steel and iron factory in central Serbia’s Smederevo. Starting in 2021, local environmental activists have organised several protests and filed criminal complaints against the Chinese company HBIS for environmental pollution in the town of Smederevo and the surrounding villages.

Montenegro:

The single most disputed Chinese investment in Montenegro is the construction of the Bar-Boljare highway, considered to be one of the most expensive roads in the world. Private citizens, civil society organisations as well as the state of Montenegro have filed lawsuits against the China Road and Bridge Corporation (CRBC), which oversees development of the highway. 

Many of the complaints focus on the limited access to public information from the state of Montenegro – both concerning the permits for the road construction and for their financing. The secrecy around the highway construction has also received criticism due to the fact that significant state aid from Montenegro is provided to the Chinese investor and its local subcontractors, who have close ties to the ruling elite, without adequate oversight.

Near the Tara river, organizations reviewing environmental damage wrought by the development activity have been denied access to public information such as tender procedures, construction activities, use of explosives, noncompliance with the Environmental and Social Impact Assessments, as well as damages on private property during construction activities. Residents living close to the construction area say that their rights were repeatedly overrun and they have filed at least  23 different complaints related to land issues due to the highway construction. 

Bosnia-Herzegovina:

Most complaints filed against Chinese companies in Bosnia-Herzegovina are in the sector of coal thermal power plants. At least eight legal complaints have been filed concerning plans to construct three new coal power plants: the Tuzla 7, Ugljevik 3 and Stanari.

There have also been several disputes over investments in hydropower in Bosnia-Herzegovina. For example, the Chinese company Dongfang invested in the thermal power plant Stanari then began construction without an EIA. In another case, a criminal complaint was lodged against the company Sinohidro for constructing a power plant on the Neretva river that endangered the local biodiversity.

The construction of the Banja Luka-Prijedor highway has also been controversial. The Chinese firm leading the construction, Shandong High-speed International, has received complaints regarding possible corruption and illegal changes of the road route.

North Macedonia:

Compared to other Western Balkan countries, North Macedonia has relatively few Chinese investments. The only investment that has been controversial is the construction of two highways: Miladinovci-Shtip and Kichevo-Ohrid. Sinohydro, the Chinese construction company, received complaints for damaging private property during construction activities and for endangering and destroying local rivers.

Albania:

One of the main Chinese investors in Albania is Bankers Petroleum Ltd. with operations in the Patoz-Marinz oil fields. The company has received complaints from community members and from civil organizations regarding:

– pollution of agricultural land;
– damage of private property;
– not adhere to the regulations on the Albanian oil market.