By The Diplomat | Created at 2026-07-20 18:01:42 | Updated at 2026-08-04 12:46:55
2 weeks ago
Large-scale infrastructure projects around the world mark the success of the Chinese Belt and Road Initiative (BRI). The strategy, launched in 2013, has been instrumental in transforming global trade and connectivity. Yet while it has brought benefits, it has also come with unexpected costs and consequences for recipient countries. Infrastructure development has come tied to Chinese technology, now heavily embedded in electrical grids, telecommunications networks, and government utilities. Countries in the EU and North America have noted risks to national security and sovereignty caused by subversive Chinese technology, yet blacklisted companies such as Huawei and Dahua Technologies remain actively involved in the development of tech infrastructure in strategic locations such as the Balkans, on Europe’s western frontier.
For over a decade, China has made investments in the Balkans, with over €1 billion committed by Beijing as early as 2009. Chinese loans have been instrumental in securing the BRI’s route into Europe. Investments have flowed into all of the Balkan states except Kosovo, which remains unrecognized by China. The introduction of Chinese technologies has created serious cause for concern. Countries have become particularly concerned after finding Chinese communication devices embedded in imported products and after witnessing China’s use of advanced surveillance to target its own Uyghur population. This led the US to blacklist 28 Chinese companies and produce the Clean Network Initiative, which seeks to ensure telecommunications security within Western networks.
The initiative fed into the creation of the Washington Agreement in 2021, which normalized economic relations between Serbia and Kosovo. The agreement included a prohibition on 5G equipment supplied by untrusted vendors, implicitly referring to Chinese companies. Similarly, Kosovo had found Serbia culpable in implementing Chinese surveillance technologies within communities along its border. The agreement acknowledged these concerns and set a precedent for challenging the BRI strategy in the Western Balkans.
The BRI has resulted in both exacerbated Serbian-Kosovar relations and East-West rivalries that treat the Balkans like swing states, to be won over through economic and technological coercion. The recent introduction of 5G into Serbia has been particularly contentious. The European Investment Bank and the US EXIM Bank have invested in Telekom Srbija Group, seeking to ensure that Huawei equipment is not used in the rollout of 5G technology in the country. The conditional loans have seen Telekom Srbija Group portrayed as a Western-leaning company of sorts, encouraging the country’s integration into the EU while aligning with Western markets. CEO Vladimir Lucic noted that the company’s 5G license relies on contracts with Ericsson and Nokia, a marked change from past contracts with Huawei.
Balkan companies that want to attract Western investment have accepted that Chinese 5G technology is a risky and broadly invasive tool, posing dangers to Kosovo, EU integration, and Balkan democratization. As a result, they are choosing to avoid Chinese providers entirely. This move has, in turn, put a target on the company in question, resulting in damaging cyberattacks on networks and renewed Eastern interest in swaying the Balkan markets. Russian hackers, who have aligned with Chinese opposition to NATO expansion and are partly incentivized by the Sino-Russian “no limits” friendship, earlier this year targeted Telekom Srbija Group, seeing the company and its CEO as aligned with Serbia’s American and European allies.
Chinese interest, however, is far from waning. Last year, China announced €1 billion in new investments in the Balkans aimed at technological integration and long-term strategic cooperation. The Serbia-China Free Trade Agreement likewise went into force in 2024, paving the way for new investments in data centers and robotics manufacturing. Huawei opened its Innovations and Development Centre in Belgrade, an instrumental step in delivering the Serbian “Safe Society” project. The project has installed more than 1,000 surveillance cameras across 800 locations in Belgrade, Niš, and Novi Sad.
Projects like these come as rhetorical by-products of the Smart Specialisation Strategies (S3) encouraged by the European Commission and initiated across Serbia, Montenegro, Bosnia, and Albania. Yet the projects fail to facilitate EU integration. Instead, the Serbian-Chinese Mixed Committee for Scientific and Technological Cooperation continues to advance stronger bilateralism. Minister Bela Balint has described the partnership as enabling “us to plan together, coordinate efforts and create joint results of lasting value.”
Balkan states have sought to maintain a high level of strategic ambiguity in their orientation toward Europe and the East; however, this neutral ground is becoming increasingly shaky. The conflict in Iran has shown the Balkans to be stalled enlargement projects susceptible to a wide range of influences, opening gateways for Iranian subversion in Europe. Russia has likewise leveraged the Balkan states to weaken EU resolve and sanctions reliability. The cyberattack on Telekom Srbija Group is only one example of the way in which cyber and information warfare are being used by adversarial countries such as Russia. The risk is duplicated by the rollout of 5G.
Global geopolitics are shifting significantly, forcing the BRI into a later stage where rivalries are clearer and are fought through investment wars and cyber campaigns. This has forced businesses to recalculate the technologies they use. Strategic ambiguity will fail to survive this new environment, and Balkan leaders will be forced to take sides as they move closer to either the EU or Eastern markets. Telecommunications sit at the heart of many of these issues. It is the sector likely to undergo the most uncertainty due to its critical role in information exchange, the propagation of surveillance technology, the dichotomy between Western and Eastern investment, and the position it holds at the heart of emerging technological development.
The BRI is at a critical juncture, and policymakers should strive to keep dangerous technologies out of Europe. In doing so, market actors will have to choose between Western technology, driven by security concerns, and Eastern-aligned technology, which carries serious privacy risks. A more critical approach to Chinese investment is needed, but at present, hybrid warfare may become an even greater risk until Balkan states take a resolute position.
