EUISS: Chinese investments hinder transparency in the Western Balkans

PARIS – While Chinese investments continue to increase in the Western Balkans, its transparency remains questionable, it is written in the latest publication Balkan corruption: The China connection by the EU Institute for Security Studies.

“While EU institutions try to promote clear rules for spending every 500 euros to make sure public money is used in the most efficient way, contracts for Chinese-built highways worth up to 500 million euro are decided without any tender,” it is explained in the publication.

One of the biggest issues seems to be the adoption of the ad hoc legislations to meet the demands of Beijing, creating certain loopholes which do not comply with the EU norms.

It is said that, according to the Serbian Infrastructure Ministry, companies from China have obtained contracts in the region of €5.5 billion for the construction of highways and railways.

This would not seem as a problem if the Chinese companies have not been awarded the contracts “directly by the governments rather than through a competitive bidding process”.

The Chinese Sinhydro Corporation, which is blacklisted by the World Bank, has signed the agreement with the Macedonian government for the construction of the highway in Macedonia.

“The project was to be financed by a loan from the state-owned China Exim Bank for 85% of its value – and executed by Sinohydro,” it is written in the publication. However, recently it has been discovered that the project inflated its costs by €120 million.

The same bank has provided a loan of  €1 billion for Montenegro, for a section of the highway linking the port in Bar with the Serbian border.

According to some corruption indicators, since the 2000s the corruption has decreased, but in Albania, Bosnia and Herzegovina, Kosovo and Macedonia, it is on the rise.

“The rise of populist politics in the region naturally facilitates Chinese influence as local leaders look to Beijing for alternatives to the EU ‘way’ of modernising administration and public life,” it is stated.

However, Chinese companies should not be to blame for the current situation, although they are fostering the norms and values, such as lack of transparency, which are not in convergence with the EU norms.

Still, the EU does not have any objections since it needs the stable region with a prosperous economy.


Publication of this article has been supported by the Balkan Trust for Democracy of the German Marshall Fund of the United States