Serbia began work on November 28 on a China-funded railway line that is part of Beijing's "new Silk Road" network and promises to expand China's reach and influence in Europe.
The project was launched on the outskirts of Belgrade as Chinese Premier Li Keqiang was meeting in Budapest with Serbian Prime Minister Ana Brnabic and Hungarian Prime Minister Viktor Orban at a summit with 16 Central and Eastern European nations.
Serbia borrowed $297.6 million from China's Exim Bank in May to modernize a stretch of the railway line between Belgrade and the Hungarian capital of Budapest.
The high-speed rail link between Belgrade and Budapest is expected to cost $3.8 billion in all and is slated to become the main transport route for Chinese goods that arrive by sea at the Greek port of Piraeus to other parts of Europe.
Brnabic said that the 30-kilometer stretch of the railway line from Belgrade to the northern town of Stara Pazova will be a key step forward.
She said she was hopeful that the railway project will help Serbia "establish itself as a central hub of this part of Europe."
"It is the first project between China and the EU involving Serbia," she said.
At the summit, Li said the rail line would help to "shore up the weak links in globalization" and would be "good for the healthy development of globalization."
Serbia has enjoyed good relations with China since the 1990s, when Belgrade was economically isolated for its role in the Balkans wars.
Hungary on November 27 invited a procurement tender for a modernized railway link with Belgrade. The construction of the Hungarian stretch, worth around $2.1 billion, is expected to start in 2020, with China's Exim Bank providing 85 percent of the credit.