Tyre and automotive investments key to China’s Ironclad friendship with Eastern Europe

When Chinese premiere Xi Jinping landed in Belgrade on 7 May 2024, the Serbian government literally rolled out the red carpet. As well as providing security, the president Xi’s escort of MIG-29 fighter jets was another way of honouring what has become known as the ”ironclad friendship” between the countries. After Serbia, Hungary is the next stop on president Xi’s tour of Eastern Europe. Since both countries have also become home to significant tyre and automotive manufacturing investments in recent years, it appears that the influence of China and Chinese companies in Eastern Europe is growing.

Indeed, China now claims to be the largest source of foreign direct investment (FDI) in Serbia. And at this point, it is worth highlighting, when it came to substantiating that claim Chinese ambassador to Serbia, Li Ming named tyre manufacturer Linglong as one of three largest strategic investments in Serbia. He also said that, together with Chinese home appliances manufacturer Hisense and mining company Zijin, the businesses provide 20,000 jobs in Serbia.

Similarly, in February, Serbia’s president said Linglong could be the country’s fifth or sixth largest exporter.

China’s claim that it is the leading investor in Serbia echoes what Tyres & Accessories learnt during a visit to Linglong Serbia last year, but that claim is disputed and the BBC suggests UN trade figures put China in fifth place on the foreign direct investment list behind Germany, Italy, the US and Russia.

Nevertheless, the impact of Chinese investments in the region are undeniable, something that is underscored by the fact that Hungary is set to become home to a new BYD vehicle manufacturing facility and there are many other non-Chinese tyre and automotive-related plants in both countries.