Follow the Money: Why the EU, Not China, Matters Most to Serbia and Georgia

Both countries have a thirst for Chinese investment, and both are candidates for membership of the European Union. 

Yet neither Vucic nor Kobakhidze has ever lavished such warm words on Ursula von der Leyen, president of the European Commission, or enlargement commissioner Marta Kos.

And that might seem odd, given that the data shows the EU is a much more important economic partner than China for both Serbia and Georgia.

In Serbia, in the decade between 2013 and 2023, EU member states invested over 18 billion euros, more than three times the 5.5 billion in investment from China; over the same period, Georgia received more than 4.4 billion euros in direct investment from the EU, compared to a total of 1.1 billion from China and Russia.

Analysts say the reluctance of Serbian and Georgian leaders to pour praise on the EU reflects how far the countries have veered from the path of accession, their resentment of the democratic standards set by the EU as a condition of integration, and the public image of the bloc. It also comes down to differences in the economic relationship.

They would be foolhardy, however, to think China can supplant the EU when it comes to trade and investment, analysts warn. Indeed, it is precisely their potential as a bridge between East and West that interests China.

“If we become isolated from the West, we will not interest China either,” said Giorgi Kartvelishvili, a researcher at Tbilisi State University.

China focused on infrastructure

A sign in Georgian and Chinese at a construction point on a stretch of Georgia’s main East-West highway, built by Chinese companies. Photo: BIRN.

Even though Georgia signed a Free Trade Agreement with China in 2017 and has long been economically dependent on its much larger neighbour, Russia, the EU remains the country’s dominant trade partner, with total turnover exceeding that with Russia and China combined.

Despite claims of rising Chinese and Russian financial influence and a Georgia-China strategic partnership sealed in 2023, data shows that the EU remains the dominant investor in the South Caucasus country. Between 2013 and 2023, Georgia imported products worth more than 23.8 billion euros from the EU and exported around seven billion.

So why the red carpet treatment for China? 

According to Aleksandar Matkovic, a postdoctoral researcher at the University of Barcelona specialising in the economic history of Europe and the Balkans, China gets better press because, “for the past five years, [it] has focused on key industrial infrastructure, unlike European investments”.

European investment is more complex, from privatisation to donations and other financial support; China’s, on the other hand, “is an expression of a planned economy that primarily targeted industrial sectors – mining, energy, transport, and there is no doubt that the effect of China is visible in a different way”, Matkovic told BIRN.

This is all part of China’s Belt and Road Initiative, a sprawling infrastructure investment strategy spanning Asia and reaching deep into Europe. It often involves roads or bridges built by Chinese companies, using Chinese workers, and paid for by loans from Chinese banks.

Such projects make headlines, but, under the surface, when it comes to the far more consequential matter of trade, the value of imports and exports between the two countries and the EU far outstrips the value of their trade with China.

In 2023, Serbia imported 24 million euros worth of goods from the EU, five million from China and less than two million from Russia; the same year, the country exported almost 21 million euros worth of goods to the EU, compared to roughly 1.3 million for both China and Russia. 

Stefan Vladisavljev, programme director at the Belgrade-based NGO Foundation BFPE for a Responsible Society, said that China is perceived in both countries as a benefactor, regardless of the specifics.

“There is no clear distinction, either in Serbia and Georgia, between investment, infrastructural projects financed by loans, and trade exchange, which can be seen as a third pillar of economic cooperation,” Vladisavljev told BIRN.

Instead, he said, it is a matter of how such actors are “presented to them [the public] by the political elites”.

Gas transit

Georgian Prime Minister Irakli Kobakhidze delivers a speech at the 8th China International Import Expo in Shanghai, China, November 2025. Photo: EPA/ALEX PLAVEVSKI

The EU waived visas for Georgian citizens in 2017 and made the country a candidate for membership in 2023, moving to shore up the bloc’s position the year after Russia’s full-scale invasion of Ukraine.

Georgia is of particular strategic interest given its position as a transit country for gas.

“Georgia is a very good location to transit gas from Azerbaijan and Kazakhstan,” said Otar Abesadze, Associate Professor of Economics at Tbilisi State University.

“This is why the EU invests so much money in Georgia, and in turn, we get financial benefits, grants to develop our social systems, and most importantly – defence.”

Kobakhidze and his ruling Georgian Dream party, however, have slammed the brakes on EU accession, angry at criticism from Brussels about democratic backsliding.

In November 2024, Kobakhidze announced the suspension of EU accession negotiations after the European Parliament rejected the results of Georgia’s parliamentary elections as unfair.

This sparked a wave of ongoing protests, which authorities responded to with violence and increasingly draconian laws targeting activists, independent media and opposition figures.  

China, on the other hand, makes no demands of Georgia in terms of democracy, media freedom or human rights.

“Georgia’s current government is seeking support from China, firstly to alleviate the economic impact of undermined relations with the West,” Ioseb Dzamukashvili Sekhniashvili, an analyst at the Georgian Foundation for Strategic and International Studies, wrote for China-focused analysis website CHOICE.

Georgian Dream hopes that “Beijing might serve as a reliable counterweight to the economic fallout of its turn away from the West”, he said.

Transparency International Georgia made a similar point in a May 2025 report: “China offers political support to the ruling Georgian Dream party by characterising it as enforcing policies of ‘peace, stability, and development’, while Georgian officials increasingly portray China as a strong partner and an alternative to the West.”

Kartvelishvili said he believes the Georgian government will resume accession talks with the EU, citing the fact the bloc has always found ways to do business with far less democratic countries.

“Azerbaijan has bigger issues with freedom of speech and expression than Georgia, but the EU is still purchasing its oil,” he said.

EU image taking a hit

Protesters hold a banner reading ‘Knowledge is power’ during an anti-government rally in Belgrade, Serbia, January 2026. Photo: EPA/ANDREJ CUKIC.

Like Kobakhidze, Serbia’s Vucic is also facing anti-government protests, triggered by the November 2024 collapse of an outdoor canopy at a newly renovated railway station in northern Serbia, in which 16 people died. The renovation work was part of a Chinese-led upgrade of the rail link between Belgrade and the Hungarian capital, Budapest.

Unlike in Georgia, however, protesters in Serbia are not waving EU flags.

Vladisavljev said the EU accession process had not led to an improvement in “the level of democratic practices” in Serbia.

And despite the level of economic cooperation between the EU and Serbia, it “did not contribute greatly to the creation of a positive image of the European Union”.

After so many years, the Serbian public’s faith in the process has largely evaporated, leaving fertile ground for “narratives” about the generosity of China and “the image that China is not making you do anything”, Vladisavljevic told BIRN.

This article was published as part of the Spheres of Influence Uncovered project.