EU-funded projects abroad are being built by Chinese companies.

By Jason Mardell, Ana Ćurić, and Maradia Tsaava | Published by Politico

Summary

As the European Union (EU) prepares to confront China in global infrastructure funding, it faces an uncomfortable truth: many EU-funded projects are being constructed by Chinese state-owned enterprises. Since early 2019, Chinese companies have secured over €1 billion in contracts for projects funded by the European Investment Bank (EIB) in countries outside the EU, such as Georgia, Senegal, and Tunisia. This represents roughly 13.1% of all EIB third-country contracts, while EU companies account for 15.7%.

In some years, like 2019 and 2024, Chinese firms have captured a larger share of the EIB-funded contract value than their EU counterparts. Although they win about a third as many contracts, these are typically of higher value.

One noteworthy example is a new stretch of road that cuts through the Rikoti Pass in central Georgia, part of the E60 European Transit Road connecting Europe and Asia. The challenging road received funding from the Asian Development Bank, the World Bank, and the EIB, which contributed €399 million, but all contracts went to Chinese state-owned firms.

The situation is further complicated by the European Commission’s Global Gateway initiative, launched in September 2021 as a direct response to China’s Belt and Road Initiative (BRI). Intended to create connections without fostering dependency, the reality is that many EU-funded projects are still being built by Chinese companies.

Chinese firms have also secured contracts for public-sector projects funded by the European Bank for Reconstruction and Development (EBRD), which, while not part of the EU, is significantly financed by EU entities. In the past five years, Chinese companies have won 13% of public-sector project contracts funded by the EBRD.

The European construction industry has raised concerns over China’s role in EU-funded projects. The European Chamber of Commerce in China noted a lack of European participation in Chinese-funded Belt and Road projects, which are often awarded to Chinese firms without competitive bidding. In contrast, the EIB mandates competitive procurement processes for its projects.

Continue reading at the publisher’s website here.

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