Along a rutted road on the outskirts of the central Serbian town of Smederevo stands a gargantuan steelworks emblematic of the country’s economy.

Barely visible on the Zelezara Smederevo factory under a thick patina of rust-colored dust are the words “Serbian Pride”, inscribed on the building when it belonged to US Steel. Following the 2008 global financial crisis, the company sold the loss-making factory back to the Serbian government for $ 1.

Since 2016, when Hebei Iron & Steel Group bought the company for 46 million euros in one of the largest Chinese investments in Serbia, it has laid the groundwork for what the nationalist president of the Balkan country, Aleksandar Vucic calls “the friendship of steel” between Belgrade and Beijing.

But locals and environmentalists say industrial investment across Serbia by Chinese companies has forced them to choose between the quality of the air they breathe and their jobs.

“For 120 days of the year, our air pollution in this city is well above Western standards,” said Nikola Krstic, an environmental activist from Smederevo, recalling a recent study by the Serbian Environmental Protection Agency. “Some days it just rains red dust.”

He cited another study who found “that air pollution is directly linked to respiratory and malignant diseases” in Smederevo.

The plant is one of a number of Chinese infrastructure investments across the Balkans that activists say are harming the environment and associating the region with outdated and polluting technology as most of the Europe adopts greener solutions.

Under Vucic, Belgrade forged ties with Beijing, collaborating on infrastructure, tourism and technology. Between 2005 and 2019, China invested $ 10.3 billion in Serbia, or 20% of total FDI in the entire Western Balkans.

The relationship deepened during the coronavirus pandemic, with Vucic kissing the Chinese flag when medical supplies arrived from the country last year and Serbia became the first European country to order the Chinese-made Sinopharm vaccine.

These ties prompted the US-based Center for Strategic and International Studies to say that last year Serbia was becoming a Chinese “client state”. Meanwhile, in March, a resolution from the European Parliament expressed concern on “the lack of transparency and assessment of the environmental and social impact of Chinese investments and loans”.

In Smederevo, residents complain of respiratory problems caused by the red dust which is a by-product of steel making. Nadica Markovic, who lives in Radinac, a village adjoining the mill, said if she spent too much time outdoors she would lose her voice.

“Last summer, we had regular red rain. If we hung our clothes outside, they were covered with red stains, ”she added. Her husband Zoran pointed out the particles accumulated in their garden and the walls of their house.

Wastewater from the steelworks is discharged, without treatment, in the nearby Ralja river. Up to 700 tonnes of dust is emitted by the steelworks each year, according to Environment Watch South East Europe, the watch dog. It produces up to 160,000 tonnes of steel per month, making it Serbia’s largest exporter.

Environmental activists said pollution was significantly lower under previous ownership and attributed the increase to a dramatic increase in production under HBIS and government inaction. HBIS did not respond to the FT’s request for comment.

Krstic said he was not blaming the Chinese but Belgrade, which he said allowed the factory to violate national environmental standards. The government has said some Chinese infrastructure projects are fundamental to the national interest, a move that allows for more lax enforcement of environmental and other laws.

Before HBIS bought the plant, the Serbian parliament passed a law exempting it from certain laws on hazardous waste disposal.

Meanwhile, in the northern city of Zrenjanin, Dusan Kokot campaigned against a billion dollar tire factory being built by Chinese company Shandong Linglong Tire Co, which sponsors Serbia’s professional football league.

Belgrade also classified the project as being of national interest, and Kokot said the government had not made public the environmental impact assessment study of the plant – usually a prerequisite before construction of the plants. industrial facilities.

“The city starts barely a kilometer from the factory. What sort of quality of life will we have? Kokot said.

China’s investments in Serbia have helped Vucic consolidate his power, said Stefan Vladisavljev, an analyst at the Belgrade Fund for Political Excellence think-tank. The president’s party enjoys a two-thirds majority in parliament and controls almost all towns and villages in Serbia.

“You can’t take a photo in front of legal reforms or with a newly opened EU membership negotiation chapter, but you can take a photo in front of a new highway, a new railroad, a new factory,” he said. he declared.

Despite Vucic’s iron fist, an April 10 anti-government protest against environmental degradation drew thousands to the streets of Belgrade.

There are signs that dissent has shaken the government. Days after the protest, Belgrade ordered the Chinese-run Zijin copper mine in the southern city of Bor to stop work for failing to meet environmental standards. He also ordered a Chinese-owned recycling plant near Zrenjanin to stop production due to environmental damage.

“Vucic observed during the protest that the environment has the capacity to temporarily unify left and right,” said Vuk Vuksanovic, researcher at the Belgrade Center for Security Policy.

“This is the first time that the government has blinked its eyes on anything related to China and it poses one of the first obstacles in the Sino-Serbian partnership.”