It started with a highway connecting the Montenegrin cities of Bar and Boljare. China’s Exim Bank gave a $944 million loan for the first section. Chinese workers did the work. By the third quarter of 2024, China’s Exim Bank accounted for 15.6% of Montenegro’s total external debt.
Europe stepped in. Western banks helped Montenegro hedge the currency risk on its Chinese loan in 2021. Brussels did not take over the debt, but it later backed the next section of the motorway with grants and financing.
The highway debacle showed how a single opaque, oversized project could threaten candidates for European Union membership. It underscores the need to accelerate plans for EU enlargement in the Western Balkans to promote stability in the region, and to loosen China’s grip. Montenegro remains the frontrunner, having recently closed two negotiating chapters. Albania, North Macedonia, and others are next in line. The biggest question mark hangs over whether to speed up Ukraine’s application. The EU is attempting to re-energize the lagging enlargement process through a new €6 billion Growth Plan, with funds to the candidates tied to specific reforms on rule of law.
But progress remains slow and uneven. “Enlargement fatigue” lingers and the EU recognizes that it must reform its own decision-making to operate with 30+ members. By itself, Hungary has held up a promised €90 billion in funding to Ukraine. At a summit this month, 25 other European leaders accused Budapest of betrayal — a “gross act of disloyalty,” according to German chancellor Friedrich Merz — but lacked an instrument to overcome the Hungarian veto.
As Europe hesitates, China pounces. Beijing does not need to outspend Europe to shape the region’s future. It is financing Balkan telecoms, surveillance, cloud infrastructure, and digital training. Those ties are harder to reverse than a construction contract. A road can be refinanced. A telecom backbone, a surveillance network, or a research partnership can lock in vendors, standards, and political habits for years.
Despite the Bar-Boljare fiasco, Montenegro has kept the door open to China. In July 2025, the University of Montenegro signed a memorandum with China’s National Supercomputing Center in Jinan for cooperation in cryptography, artificial intelligence, and blockchain. The US sanctioned the Jinan center in 2021 for links to Chinese military research, and Washington has publicly warned Podgorica about cybersecurity risks.
Then there is Serbia, China’s main hub in the Western Balkans. Chinese capital has flowed into Serbian mines, steel, tires, auto parts, and renewable energy. Serbia also signed a free trade agreement with China that entered into force in July 2024, the first such deal between Beijing and a country in Central and Eastern Europe.
Telecom vendor Huawei has become embedded in Serbia’s digital ecosystem. It has partnered with state-owned Telekom Srbija, opened a digital innovation center in Belgrade, and tied itself to Serbia’s push to digitize public services and expand digital infrastructure.
The “Safe City” project has become the clearest symbol of that relationship: Chinese-backed camera networks, opaque procurement, weak safeguards, and repeated efforts to normalize biometric surveillance in a country still seeking to enter the EU. Reports in 2025 showed Serbian authorities continuing to expand the network despite public controversy and unresolved legal concerns.
Bosnia and Herzegovina adds another layer of risk. Chinese digital involvement there follows the country’s political fragmentation. Huawei has worked with Telekom Srpske and has been linked to smart-city cooperation in Sarajevo. Bosnia’s Republika Srpska has generally been more open to Chinese technology and financing than the country’s Croatian-Bosniak region. The fragmentation in Bosnia has led to competing political entities drifting toward different vendors and standards.
Raw materials are part of the same picture. China is among the largest importers of minerals from the Western Balkans. The region’s copper, steel, and other raw materials matter to Beijing’s manufacturing base and technology ambitions. Many of these projects bring environmental damage, weak labor standards, and opaque governance. Candidate countries are supposed to move closer to EU norms, yet the politically attractive Chinese deals pull them the other way.
Not every Western Balkan country is equally exposed. Kosovo has largely shut China out. Albania has kept Beijing at arm’s length. North Macedonia has become more cautious, especially on 5G and untrusted telecom vendors.
The question is no longer just whether candidate countries adopt EU standards. It is whether they are locking themselves into technology ecosystems, data relationships, procurement habits, and security dependencies that will later clash with EU rules and European interests.
The answer is not to demand that the Western Balkans cut ties with China. That would be unrealistic and, in some cases, hypocritical. Several EU member states have had their own deep commercial relationships with Beijing. The answer is to make Europe the easier, faster, and more credible partner in the sectors that matter most.
It means accelerating the disbursement of the €6 billion Growth Plan money and tying it to visible projects in connectivity, cloud capacity, digital public services, clean industry, and secure research. It means screening strategic dependencies before countries join, not after. It means treating Chinese surveillance systems, sanctioned research ties, opaque procurement, and risky telecom vendors as enlargement issues.
Europe remains the region’s biggest trade partner and biggest investor. Enlargement is no longer only about whether the Western Balkans can enter the EU. It is also about what kind of states they are becoming before they arrive.
The old debt-trap debate catches only part of the problem. In most cases, the EU remains the bigger economic actor, and Western Balkan countries owe more to European creditors than to China. But Chinese financing can still create sharp vulnerabilities.
Dr. Anda Bologa is a senior researcher in the Tech Policy Program at the Center for European Policy Analysis (CEPA).
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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