The EU’s and China’s Grants and Loans in the Western Balkans

This note compares EU and Chinese financial support to the Western Balkans. The EU leads in grant funding, providing IPA grants averaging 0.8% of the region’s gross domestic product (GDP), while Chinese grants account for only 0.02%. In loans, however, China has nearly matched the EU, with annual commitments of 1.2% and 1.5% of GDP, respectively. In Serbia, Chinese loans have even surpassed EU lending. EU loans are cheaper and more transparent but come with stricter conditions, while Chinese loans are more flexible and quicker to implement, making them more favourable to local politicians. However, this flexibility raises concerns, as Chinese loans are more prone to corruption, lower-quality results, labour rights violations, and environmental harm.

Source: https://wiiw.ac.at/wiiw-policy-notes-and-reports-ps-25.html