Legal risks of Chinese Belt and Road contracts (BRI) for EU candidate countries
The Belt and Road Initiative (BRI) has brought substantial Chinese investment in infrastructure to the Western Balkans and other EU candidate countries – from highways and railways to energy and logistics hubs. At the same time, the European Union remains the region’s main economic partner, but with stricter rules and slower procedures, which makes Chinese financing appear as a faster track to large‑scale projects.
For EU candidates, however, every BRI‑related contract carries an additional layer of legal risk: compatibility with the EU acquis, public procurement and state‑aid rules, and the emerging EU regime on foreign subsidies and investment screening.
Why are Belt and Road contracts particularly sensitive for EU candidates?
In many candidate countries, institutional capacity to negotiate and supervise complex infrastructure PPPs and project finance deals remains limited, while political pressure to “deliver” visible projects is intense.
Chinese BRI models – state‑to‑state loans combined with EPC contracts and turnkey delivery – capitalize on this combination by offering speed and flexibility, but at the cost of transparency and competition requirements that the EU promotes.
For EU candidates, this creates three main challenges:
- potential conflicts between long‑term BRI (Belt and Road Initiative) commitments and future EU membership obligations, especially in public procurement, state aid and competition;
- exposure of strategic infrastructure and energy assets to third‑country leverage at a time when the EU tightens its scrutiny of Chinese investments;
- reputational and political concerns about alignment with EU foreign policy and rule‑of‑law standards.
Public procurement, state aid and conflict with EU law
EU public procurement law is built on transparency, equal treatment and open competition, backed by effective review and remedies. In contrast, many BRI projects (Belt and Road Initiative) in the Western Balkans rely on inter‑governmental agreements that allow contracts to be directly awarded to Chinese state‑owned enterprises without competitive tendering.
For EU candidate countries this implies:For EU candidate countries this implies:
- a need to ensure that today’s BRI contracts can withstand tomorrow’s obligation to fully apply EU procurement directives;
- risk that certain provisions may be viewed as unlawful state aid or discriminatory practices once EU law becomes directly applicable;
- growing oversight from the EU through its FDI screening framework and the new Foreign Subsidies Regulation, which observers suggest should be extended to the Western Balkans during the accession process.
Sovereign debt, “debt‑trap” concerns and EU fiscal criteria
China has become one of the largest bilateral creditors to developing countries, and a large share of that exposure relates to BRI (Belt and Road contracts) infrastructure loans. On the Western Balkans, Chinese investments and loans have been growing much faster than most other sources, even though the EU still accounts for the majority of total FDI and trade.
For EU candidates, high reliance on Chinese sovereign loans can become an issue in accession talks, where fiscal sustainability and debt transparency are central benchmarks.
Key risks include:
- foreign‑currency denominated loans backed by state guarantees and long maturities, increasing vulnerability to interest rate and exchange‑rate shocks;
- underperforming projects leading to debt rescheduling, asset concessions or other forms of political leverage;
- reduced fiscal space for co‑financing EU programmes and blending instruments that require national contributions and adherence to strict debt limits.
Rule of law, political influence and EU alignment
Analyses of China’s footprint in the Western Balkans point out that rapid expansion of Chinese projects has been enabled by weak, politicized institutions and limited capacity to enforce rule‑of‑law standards.
Analyses of China’s footprint in the Western Balkans point out that rapid expansion of Chinese projects has been enabled by weak, politicized institutions and limited capacity to enforce rule‑of‑law standards.
In such an environment, BRI projects (Belt and Road contracts) may reinforce patterns of corruption, clientelism and opaque decision‑making, which run counter to EU accession priorities.
As a result, the EU increasingly links progress in accession with:
- greater transparency of Chinese‑backed projects and publication of key contract terms;
- effective parliamentary and civil society oversight over large infrastructure deals;
- early adoption of EU‑like FDI screening mechanisms and foreign subsidy controls.
In other words, BRI engagement itself becomes a test case for a candidate’s genuine commitment to EU‑style governance.
Comparative table – an EU candidate between China and the EU
Aspect / Risk Area
Chinese BRI contracts in EU candidates
EU‑backed projects and funds in candidates
Public procurement
- Direct awards, limited competition.
- Open tenders under EU‑style rules.
State aid & subsidies
- Risk of incompatible aid and preferential treatment.
- Designed to comply with EU state‑aid rules.
Fiscal sustainability
- High debt exposure, FX risk.
- Stricter fiscal criteria, a mix of grants and loans.
Rule of law & oversight
- Weaker scrutiny, higher corruption risk.
- Stronger EU‑driven oversight and audits.
FDI screening & foreign subsidies
- Fragmented, EU calls for tighter controls.
- Directly subject to EU frameworks post‑accession.
Political and geopolitical impact
- Expanded Chinese leverage and alignment.
- Closer alignment with EU foreign policy.
Risk‑mitigation strategies for EU candidates
To reconcile the need for infrastructure investment with EU accession goals, candidate countries can adopt several risk‑mitigation strategies:
- voluntarily applying EU‑style public procurement rules to large third‑country projects even before accession;
- inserting contractual clauses that require compliance with EU environmental, labour, competition and state‑aid standards as they are progressively adopted;
- introducing national FDI‑screening and foreign‑subsidy control regimes compatible with the evolving EU framework;
- investing in institutional capacity and independent expertise to assess long‑term fiscal and legal implications of BRI projects.
Such an approach allows EU candidates to benefit from diversified sources of financing while keeping their legal and political trajectory aligned with EU membership.
Follow for more legal insights:
