The United States has unveiled a new strategy for the Western Balkans centred on economic partnerships and countering Chinese and Russian influence, just as Serbia’s president, Aleksandar Vucic, travelled to Beijing for talks highlighting Belgrade’s increasingly close ties with China.

The timing highlighted the growing geopolitical competition playing out across Southeast Europe, where the US report says it fears Beijing and Moscow are exploiting weak institutions, energy dependence and unresolved regional tensions to expand their influence.

The State Department’s Report to Congress on United States Policy to Promote Regional Stability and Prosperity in the Western Balkans indicates a shift in Washington’s approach. Rather than the state-building and democracy promotion efforts that characterised US engagement in the region after the Yugoslav wars, the strategy emphasises what officials describe as “mutually beneficial partnerships” focused on trade, energy and security cooperation.

“The US-led nation-building era has passed,” the document states. “US policy in the Western Balkans is not about rescue or reconstruction, but stability and mutually beneficial partnerships.”

It was released shortly after the resignation of Bosnia’s high representative, Christian Schmidt, reportedly under pressure from Washington, after which US officials indicated they want the international community to have a reduced role in Bosnia — a stance that puts the US at odds with the EU and UK. 

In the new report, State Department officials say the region remains strategically important because of its transport corridors, natural resources and proximity to EU markets. But the report warns that instability in the Balkans creates opportunities for rival powers seeking to undermine western influence. “Malign actors can exploit regional instability to the detriment of US interests,” the report says, singling out both Russia and China as sources of concern.

Steel friendship 

The document was released during Vucic’s five-day state visit to China during which Chinese President Xi Jinping awarded him the Order of Friendship, Beijing’s highest honour for foreign nationals.

Xi praised Vucic as a “creator and firm defender” of relations between the two countries and hailed the “steel friendship” linking Beijing and Belgrade. Vucic, in turn, thanked China “for everything achieved so far”, according to statements issued after the talks.

The visit marked the 10th anniversary of the comprehensive strategic partnership between Serbia and China, with Belgrade having been among the first European capitals to embrace Beijing’s Belt and Road Initiative.

Over the past decade, China has become one of Serbia’s largest economic partners, financing highways, railways, factories and mining projects. Chinese mining company Zijin operates copper and gold mines in Bor, while steelmaker HBIS Group runs the Smederevo steel plant, one of Serbia’s biggest industrial employers.

The relationship has also expanded into defence and technology. Earlier this year Serbia purchased Chinese supersonic missile systems, deepening concerns in western capitals about Beijing’s growing security footprint in Europe.

Investment destination 

Serbia is China’s closest partner and the top recipient of Chinese investment in the Western Balkans, though there are major Chinese-backed projects elsewhere in the region such as the Bar-Boljare railway in Montenegro. However, Chinese investment has a mixed reception in the region, with Albania blocking Chinese investment into both its main port at Durres and its 5G network, even while trade with China has boomed. 

During Vucic’s visit to China the two sides signed a broad package of agreements spanning legal cooperation, artificial intelligence, digital infrastructure, environmental protection, tourism and industrial supply chains. Serbia also joined cooperation initiatives linked to China’s Global Security Initiative, one of Xi’s flagship foreign policy projects.

Further agreements covered customs cooperation and sanitary standards aimed at increasing Serbian poultry exports to the Chinese market, while both sides adopted a medium-term Belt and Road action plan running from 2026 to 2028.

For Washington, China’s expanding role in the Balkans has become an increasing strategic concern. The State Department report accuses Beijing of using “trade, state-backed loans, bribes, propaganda and elite-level partnerships” to build political leverage in countries with weak governance structures.

“Chinese companies often underbid on procurements, only to later reveal cost overruns and project delays that greatly increase true costs,” the report states.

Russia, meanwhile, is accused of fuelling ethnic divisions and using energy dependence to maintain influence across the region. According to the report, Moscow “finances destabilising actors” and exploits hydrocarbon supplies to pressure political leaders while weakening confidence in western institutions.

EU sidelined

There were few references in the US State Department document to the role of the European Union in the Western Balkans, even though all six countries aspire to join the bloc, likely reflecting Washington’s longstanding view of limited EU effectiveness in the region. 

Vucic was dismissive about EU pressure on Belgrade to fall into line with the bloc's Common Foreign and Security Policy (CFSP), as a candidate country.  During the visit to Beijing, Vucic complained about the EU is trying to “dictate” Serbian policy by telling him to pull back on ties to both China and Russia.

"It would be best if they [the EU] just made me a wish list of who I am allowed to talk to and who I am not," he told journalists after his arrival in Beijing, as quoted by Euronews. 

Energy security forms a central pillar of the new US strategy. Washington argues that continued reliance on Russian gas leaves the region strategically vulnerable and is pushing for diversification through US liquefied natural gas exports, renewable energy and nuclear technology, including small modular reactors.

The report highlights several infrastructure priorities, including the Southern Interconnection gas pipeline linking Croatia and Bosnia, a proposed Serbia-North Macedonia gas interconnector and hydropower developments across the region. The Southern Interconnection in particular has drawn criticism from environmental and transparency NGOs. 

The State Department also points to planned upgrades to Kosovo’s ageing coal-fired power plants and possible coal gasification projects, alongside efforts to strengthen electricity transmission links with wider European markets.

“The Department will engage actively to translate regional interest into commercial deals,” the report says, emphasising that greater involvement by US companies is viewed as essential both to reducing Russian leverage and to limiting China’s economic influence in the Balkans.

Balkan governments are long accustomed to balancing competing powers, and Serbia has explicitly pursued what it calls a four-pillar foreign policy, where it aims for friendly relations with Brussels, Washington, Beijing and Moscow, though this has become increasingly difficult as geopolitical divides have hardened.