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Shkruar nga David L.Phillips
He is pitting the US and China against each other, luring both. This approach may serve Serbia's interests for now. But very soon Serbia must decide whether its long-term interests are with the West or Eurasia...
The United States and China are locked in an escalating trade war over supplies of lithium, which are essential to the booming electric car business around the world. Serbia is pitting one side against the other, trying to take advantage of both.
Because in this country are the largest lithium deposits in Europe, which can guarantee an annual industry of 6.5 billion dollars. Tesla, Google and Apple are all waiting to invest in the extraction of this mineral. The trade war between the US and China is filled with many geopolitical ramifications, which have an impact on US-China relations, but also on European industries.
During his recent visit to Belgrade, Chinese leader Xi Jinping lobbied Serbian President Aleksander Vucic for access to lithium reserves. Vucic is open to any offer, benefiting from Chinese investments, while maintaining good relations with the US and Euro-Atlantic institutions.
He is pitting the US and China against each other, luring both. This approach may serve Serbia's interests for now. But Serbia must soon decide whether its long-term interests lie with the West or Eurasia.
According to the US Geological Survey, Serbia has 118 million tons of lithium oxide, a key raw material coveted for electric batteries by Tesla and other companies. Vucic calls lithium "one of the greatest hopes for Serbia". The largest amount of lithium in Europe is found in the region of Western Serbia, Macva, where lithium deposits hold up to 2 percent of Europe's deposits.
Rio Tinto, the major Australian mining company, is interested in managing Macva. The Chinese newspaper "South China Morning Post" reports that Vucic and Xi met in Belgrade on May 8 to discuss a wide range of cooperation in various industries. They discussed China's investments in space science and technology, as well as the sale of Chinese weapons to Serbia. Lithium was at the center of the discussion on the expansion of economic cooperation. The Biden administration has taken this fact into account. This week, the US announced new tariffs on Chinese-made electric cars, solar panels, steel and other goods, citing China's unfair trade policies as justification.
The tariffs, aimed at protecting US jobs in an election year, include a 100 percent border tax on electric vehicles coming from China. The initial installment of the proposed US tariffs would affect $18 billion of Chinese goods.
Also, the new trade regulations aim to limit the indirect trade of Chinese electric vehicles through Mexico, which are driving up prices and directly affecting American consumers. According to US officials, Chinese control of the electric vehicle market poses a risk to US national security.
The Commerce Department reports that China's largest automaker, BYD, is rapidly gaining market share. BYD makes a low-cost electric car called the Seagull, which sells for about $12,000 and is aimed at the mass market.
Comparable cars made in the USA cost 3 times as much. BYD uses the latest generation batteries made from iron phosphate and lithium. While it currently produces 3 million vehicles a year, that number will increase as China receives additional supplies of lithium.
Besides the economy, policy goals are a top priority for Xi Jinping. Vucic accepts China's demand that Serbia refuse to recognize Taiwan's independence and oppose US arms sales to the island nation.
Meanwhile, Xi returns the favor by supporting the state sovereignty of Serbia, and rejecting the independence of Kosovo, which is recognized by about 100 countries of the world, including all the members of the G7. In this case, China's views are influenced by NATO's accidental bombing of its embassy in Belgrade in 1999, where 3 Chinese citizens were killed.
Xi's recent visit to Belgrade was steeped in symbolism, and coincided with the 25th anniversary of the bombing of the Chinese embassy, an event that many in China and Serbia suspect was accidental. China's expanding influence always includes an economic element.
During last year's visit to Beijing, Vucic signed 18 agreements with Xi, including a free trade agreement that takes effect on July 1 this year. Other agreements promote legal, regulatory and economic cooperation.
China owns mines and factories across Serbia, and has loaned billions for roads, bridges and new facilities through its Belt and Road initiative, which finances infrastructure development. During his visit, Xi praised the relations with Serbia, saying: "China and Serbia are true friends and good partners. The mutual political trust between the two countries is very strong. Pragmatic cooperation, institutional improvement and multilateral coordination are close, and our strong friendship is eternal.”
Anti-American sentiments are strong in China, further bringing Beijing closer to Moscow. Likewise, Serbia has refused to join Western sanctions against Russia over its invasion of Ukraine. Xi sees support for Russia as a geostrategic counterbalance to US influence.
Both countries are suspected of engaging in extensive disinformation campaigns aimed at influencing US public opinion. Vucic is manipulating alliances in an effort to balance US influence as he strengthens Serbia's ties to autocratic states such as China and Russia.
As a protagonist of former NATO military intervention, Washington is one of the main supporters of Kosovo's independence and state-building. The possession of large reserves of such an important mineral is already giving Serbia great benefits.
The US is showing greater respect to Serbia in the EU-sponsored dialogue to normalize relations with Kosovo. Meanwhile, Vucic is benefiting quite a bit politically through the more equal approach of the Biden administration. An old Chinese proverb says: "One must have a lot of patience to catch the big fish".
Thus, China is playing a long game, investing in Serbia through the Belt and Road Initiative, and exerting its economic influence. Russia is also preparing for a long war in Ukraine, biding its time to take advantage of the shift in alliances. Serbia is having fun luring all comers until its lithium mines become productive. Lithium is the key point of the changing dynamics of the energy market in South East Europe. / Adapted "Pamphlet" from "The Hill"
Note: David L. Phillips, Adjunct/Adjunct Professor in the Security Studies Program, Georgetown University, USA.
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