The alarm first sounded in 2018 when a Chinese state-owned company undercut Austrian competition to win a lucrative bridge contract in Croatia. The strategic project – Pelješac Bridge – was built with €357 million in EU grants but branded by China as part of its ambitious infrastructure-building programme, the Belt and Road Initiative.
Following this tender, policymakers in Brussels vowed that EU funds would never again line the coffers of Chinese companies that benefited from state subsidies. Since then, the EU has introduced a Foreign Subsidies Regulation, which it deployed for the first time in February. In 2021, it also launched its answer to China’s Belt and Road Initiative – the “Global Gateway”.
However, beyond the borders of the bloc, EU funds and official development finance from member states continue to flow to Chinese companies involved in often opaque and controversial projects, this investigation reveals.
The cross-border team of journalists worked with a large public dataset to show controversial financial flows hiding in plain sight.
Scrutinising data on European Investment Bank (EIB) contracts drawn from the EU’s TED portal, the journalists discovered that around 13 percent of the total value of EIB-funded contracts awarded outside of the EU and China over the past five years have gone to Chinese firms, most of them state-owned.
That compares with 16 percent for companies from EU member states.
Highlighting the case of the Rikoti Road infrastructure project in Georgia, the investigation reveals how EU efforts to increase its visibility are undermined by the success of Chinese companies in winning EU-funded open tenders.
While Brussels has developed instruments to address the unfair advantages of Chinese state-owned firms in procurement processes at home, the journalists show that EU taxpayer money still funds projects outside the bloc that are branded as part of China’s Belt and Road Initiative.