Abstract
Foreign direct investment (FDI) is a very important element of economic integration because it creates an opportunity for accelerated development, technological innovation, and corporate restructuring. Western Balkan countries mainly focused their activities on attracting investments from EU countries. However, as investments from these countries have been reduced recently, the countries of the Western Balkans have opened their markets to incoming Chinese investments. Serbia is currently the first country in the Western Balkans. Based on the inflow of Chinese investments, and in the coming period, we can expect a trend of intensive growth of Chinese investments related to the “Belt and Road” Initiative, which will lead to additional development of the Serbian economy. The main subject of this research focuses on the distribution of Chinese investments on a global scale, as well as the importance of the “Belt and Road” Initiative for both multinational companies and recipient countries of Western Balkans, with special reference to Serbia.
TopBackground
At the end of 2013, the Chinese President Xi Jinping announced that China plans to implement one of the most ambitious foreign policy and economic projects in the coming period – Belt and Road Initiative (BRI). In the first quarter of 2015, the National Development and Reform Commission announced an action plan for BRI. The Chinese initiative promotes the development of infrastructural goods, which will significantly contribute to the economic and social development of the country. This will open the way to Western countries, primarily to Europe and its market, which is very attractive to Chinese investors. It is this novelty that represents a new direction when it comes to Chinese foreign policy, given that it is a new economic model that aims to strengthen China's position as an economic superpower (Julien & Mitsuo, 2018).
Key Terms in this Chapter
Eurasian Economic Space: The Customs Union of Belarus, Kazakhstan and Russia was found on January 1, 2010, and was later renamed the Eurasian Customs Union. The four freedoms of movement, modeled on the European Union (goods, capital, services, and people), were fully implemented on 25 th of January 2012, with the establishment of the Eurasian Economic Area.
Foreign Direct Investment (FDI): Is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest in and a significant degree of influence over an enterprise resident in another economy. FDI is an important channel for the transfer of technology between countries, promotes international trade through access to foreign markets, and can be an important vehicle for economic development.
Countries of the Western Balkans: Balkan countries (Serbia, Bosnia and Herzegovina, Northern Macedonia, Albania, and Montenegro) that are not the members of the EU.
Multinational Company (MNC): Is a corporate organization that owns or controls production of goods or services in at least one country other than its home country.
Belt and Road Initiative (BRI): Is a strategy initiated by the People’s Republic of China that seeks to connect Asia with Africa and Europe via land and maritime networks with the aim of improving regional integration, increasing trade and stimulating economic growth. It is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organizations.
Economic Development: The process of continuous economic growth in a dynamic environment.
Competitiveness: The ability of a country to produce goods and services that pass the test of the international market in free and equal market conditions, while retaining and increasing the real income of the population in the long run.