Western Balkans : Growing economic ties with Turkey, Russia and China

Abstract

Although the European Union (EU) countries constitute the largest trade partner and investor of the Western Balkan economies, economic exposure in terms of trade and investments to Turkey, Russia and China has been on the rise in the past decade. Turkey is among the top trading partners of Serbia and Bosnia and Herzegovina, while its investments in the banking sectors in the rest of the Western Balkan economies is gaining also in importance. Going further, the trade volume with Russia is overall small except for Serbia, however, Russian investments are sizable in key sectors (e.g energy, real estate) in Montenegro and Bosnia and Herzegovina. Financial and economic ties with China have intensified particularly between 2015 and 2017, not least because the region is part of the New Silk Road and the so-called “16+1 format”. China invests in regional infrastructure, such as ports, railroads and highways mainly in Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro and Serbia. Overall, the growing influence of non-EU global players poses an additional pressure on the EU to thoroughly follow its Western Balkan strategy.