EU pays, China builds: A single contract reveals Europe's strategic self-dismantling and disgrace – absurd EU subsidies

The Dakar bus scandal: How Europe is currently capitulating to China in Africa

The billion-dollar loophole: How the EU secretly finances China's global power politics

It sounds like a farcical twist in global geopolitics: The European Union wants to counter China's growing influence in Africa, investing hundreds of millions of euros in flagship green infrastructure projects on the continent – ​​and the contract for their implementation goes to none other than a Chinese state-owned enterprise. What is currently happening in the Senegalese capital, Dakar, with the awarding of a huge contract for natural gas buses, is not an unfortunate isolated incident, but rather a symptom of systemic failure. While Europe, under the banner of the "Global Gateway" initiative, ostensibly aims to build a values-based alternative to China's "Belt and Road Initiative," companies heavily subsidized by Beijing are ruthlessly undercutting every European competitor. The absurd result: European taxpayers' money is financing Chinese supply chains, cementing Beijing's technological standards, and promoting China's global power ambitions. How could Europe have fallen into this bureaucratic trap? An analysis of dangerous loopholes, powerless institutions, and the question of why the EU urgently needs to wake up if it doesn't want to be left behind in the global competition of systems.

A mission that explains everything: How European taxpayers' money finances Chinese global power politics

Dakar, the capital of Senegal, is one of the most densely populated metropolises in West Africa. The city lies on a peninsula surrounded by the sea on three sides, forcing all traffic through a narrow corridor into the city center. To alleviate this chronic traffic congestion, the Senegalese government has launched an ambitious public transport project: 380 natural gas buses will be deployed throughout the city, supplemented by an expansion of the existing bus infrastructure. The cost: 320 million euros. The lion's share of the financing is being provided by the European Union, with participation from the European Investment Bank (EIB), the European Commission, the French development agency AFD, and the German KfW Development Bank.

Among the bidders for the contract was the Swedish commercial vehicle manufacturer Scania – the only European supplier. However, the contract appears to be going to a Chinese state-owned enterprise: CRRC, the world's largest manufacturer of rail vehicles and buses by revenue, is considered the favorite for the contract, according to an internal document obtained by the news portal Euractiv. The reason is simple: CRRC submitted a bid that is only half as high as those of its competitors – including another Chinese supplier, King Long.

That in itself would be remarkable. It becomes even more remarkable when you know the context: According to EU rules, G20 countries outside the EU are generally not allowed to participate in tenders administered by the EU. China is a member of the G20. CRRC is a Chinese state-owned company. And yet it is on the verge of winning a major contract in Africa, financed by European taxpayers. What appears to be a bureaucratic oversight is, in reality, the visible symptom of a deeply rooted strategic problem.

Dakar as the setting for an older pattern

The current case involving natural gas buses is not the first time this has happened in Dakar. Back in 2024, the Senegalese capital inaugurated its Bus Rapid Transit (BRT) system – a fleet of 121 fully electric buses connecting 14 municipalities along an 18-kilometer route, halving travel times across the city. This project was also co-financed by the EU: with an €80 million loan from the European Investment Bank and €7 million through the Global Gateway initiative.

The construction of the railway line, bus stations, and interchanges was carried out by the China Road and Bridge Corporation (CRBC). The buses themselves were supplied by CRRC – the exact same company now considered the frontrunner for the new natural gas bus project. This pattern is therefore no coincidence: European capital finances the project, Chinese state-owned enterprises build and deliver, and in both cases, Dakar reliably receives infrastructure linked to Chinese supply chains, Chinese technology, and Chinese standards.

Furthermore, Chinese vehicle manufacturers are establishing local production facilities across the African continent. In Nigeria, Kenya, and Ethiopia, electric vehicles and minibuses are being assembled using the so-called kit-and-assembly (SKD – Semi-Knocked-Down) model, with components sourced from China. Because the vehicles are assembled locally, they are considered locally produced – a clever move that offers both political and trade advantages: The local government can demonstrate job creation, while the Chinese manufacturer secures market share early on and builds a presence that is difficult to challenge.

The logic of Chinese state strategy

To understand the CRRC phenomenon, one must understand China's industrial policy. The Chinese electric bus market was valued at US$38.34 billion in 2024 and is projected to grow to US$51.89 billion by 2030 – at an annual growth rate of 5.22 percent. This expansion is heavily subsidized by the state: Chinese bus companies currently receive an average government subsidy of 80,000 renminbi (approximately US$11,000) per electric bus purchased, financed through so-called Ultra-Long Special Treasury Bonds. Exports of Chinese commercial vehicles to Africa more than doubled between 2020 and 2024.

CRRC is more than just an industrial company – it's an instrument of Chinese foreign economic policy. According to the European Commission, the corporation received billions in state subsidies through various procurement processes. These subsidies enable CRRC to submit bids that no privately operating company could even remotely match – and that is precisely the goal. It's not about short-term profits. It's about strategic market access, building long-term dependencies, enforcing Chinese technical standards, and ultimately, geopolitical influence.

This strategy is globally implemented and consistent. In Bulgaria, CRRC attempted to use the same leverage, offering a price for 20 electric trains that the European Commission deemed distorted by state subsidies. The Commission opened the first proceedings under the new Foreign Subsidies Regulation (FSR), whereupon CRRC withdrew its bid before a decision was reached. The pattern repeated itself in Lisbon: CRRC participated as a subcontractor in a consortium for the construction of a new light rail line. The European Commission identified billions of euros in subsidies and excluded the company, which then replaced CRRC with a Polish manufacturer.

Where the regulation ends and the gap begins

The Lisbon case is noteworthy because it shows that the EU does indeed have instruments to combat Chinese subsidy dumping – at least on European soil. The Foreign Subsidies Regulation, which has been in force since 2023 and whose application the Commission has significantly tightened since 2025 and 2026, requires companies to disclose any state subsidies they have received in tenders exceeding €250 million. Companies that have received state aid that distorts competition can be excluded from tendering procedures.

The crucial problem: This regulation only applies to projects within the EU single market. It does not apply to EU-funded projects in third countries – precisely the projects at issue in Senegal. While the EU can act in Lisbon, it is largely powerless in Dakar. The only rule here is that G20 countries outside the EU are generally not permitted to participate in EU-managed tenders – a rule that, as things stand, is clearly not being consistently enforced or at least is not having a sufficient effect. The European Investment Bank told Euractiv that while it invests according to the Global Gateway strategy, this does not mean that only European projects are supported. This statement reveals a fundamental ambiguity in the EU's self-conception as a geopolitical actor.

Global Gateway: Europe's answer to the Silk Road

To understand the full extent of the failure in Senegal, one must understand the initiative under whose umbrella the project operates. Global Gateway was launched in 2021 by the European Commission as a strategic response to China's Belt and Road Initiative (BRI) – the New Silk Road. The EU aimed to counter the Chinese infrastructure offensive in developing countries with its own values-based alternative: investments with high standards for transparency, workers' rights, environmental protection, and governance. Up to €300 billion was to be mobilized by 2027, half of which – €150 billion – was earmarked for Africa.

In October 2025, the European Commission was able to report a success: According to its own figures, more than €306 billion had already been mobilized, two years ahead of the original target date. Commission President Ursula von der Leyen declared at the Global Gateway Forum that they were confident of even exceeding the €400 billion mark by 2027. The figures sound impressive. However, closer examination reveals significant limitations: A large portion of this sum consists of already planned investments that were subsequently subsumed under the Global Gateway label, and not of newly mobilized funds. Concrete, verifiable project figures are scarce.

Even more fundamental is the structural problem: Global Gateway can only fulfill its self-imposed task – to provide a counterweight to the Belt and Road Initiative – if the funded projects are actually implemented by European companies and set European technological standards. If Chinese state-owned enterprises win contracts for Global Gateway projects, Europe is literally financing China's geopolitical expansion. An EU report found evidence that some Global Gateway projects were being carried out by Chinese companies – a direct contradiction of the initiative's stated goal of offering an alternative to the Belt and Road Initiative.

The New Silk Road: Debt, Standards and System Control

China's Belt and Road Initiative began in 2013 as a mega-program for infrastructure loans in countries of the Global South. By 2023, African countries alone had received US$21.7 billion in deals through the BRI, including investments in ports, railways, and renewable energy. Fifty-three African states are participating in the BRI to varying degrees. China overtook the US as Africa's largest trading partner in 2009 and now ranks second only to the EU.

However, the BRI model is now showing significant cracks: many projects were not completed, suffered from inflated budgets, or were poorly executed. Countries like Angola, Ethiopia, and Kenya have incurred massive debts to China, resulting in difficult debt restructuring negotiations. In response to increasing payment defaults, Chinese banks have gradually reduced their lending for large-scale projects and are instead focusing on smaller, more targeted investments in strategic areas such as renewable energy, digitalization, and communications infrastructure. China has thus adapted its BRI strategy—but not abandoned it. The logic remains the same: whoever builds the infrastructure sets the standards. Whoever sets the standards determines the system architecture. And whoever determines the system architecture has long-term influence—economically, technologically, and politically.

This logic is particularly evident in the field of electromobility. Cape Town is served by BYD electric buses operated by the local company Golden Arrow – 120 buses that reduce CO2 emissions by ten percent. These figures seem commendable. But they have a geopolitical dimension: Chinese manufacturers like the bus company Yutong are directly connected to each bus via built-in SIM cards – for software updates, but theoretically also for remote access. Sweden banned Chinese e-buses for precisely this reason: The authorities feared that China could use these connections to collect sensitive data or remotely control the vehicles in an emergency. In Norway, the capital city of Oslo relies on buses from Yutong – a security risk that has so far been largely ignored.

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Europe's structural dilemma: Pay, regulate, lose

EPP MEP Hildegard Bentele succinctly summarizes the problem: Manufacturers in China can produce significantly more cheaply due to lower labor costs, poorer working conditions, state subsidies, and less stringent environmental regulations. The EU pays, but the added value, technological implementation, and economic benefits remain outside Europe. This, she argues, is not a sustainable model for the future. Bentele demands that development policy not be considered in isolation from strategic interests – and concludes: If only non-European companies benefit, then non-European financial institutions should also finance these projects.

However, there is also a dissenting voice. Irish MEP Barry Andrews of the Renew Europe group argues that African countries should be allowed to decide for themselves how they implement projects – even if that means rejecting a European offer. This position is logically sound: if Europe claims to offer a partnership on equal terms, it cannot simultaneously dictate who is allowed to carry out the projects. Development aid with conditions that primarily serve European economic interests would have a bitter aftertaste, reminiscent of colonial practices.

But this debate falls short. The central question is not whether Senegal is allowed to choose the cheaper offer. The central question is why a Chinese state-owned enterprise can submit a bid that is 50 percent below market prices – and why the EU not only tolerates this but actually enables it through its own subsidies. China's pricing policy is not a market outcome, but the result of massive state subsidies. Europe is therefore not competing with a company, but with the Chinese state. This is a fundamental difference that the existing instruments of EU foreign economic policy do not adequately address.

The competition of systems

The analysis by the Carnegie Endowment for International Peace from October 2025 is sobering: The EU faces a structural disadvantage compared to China in Africa because Beijing's political feedback loop is significantly faster. While European institutions waste time on tendering rules, transparency requirements, sustainability standards, and multilateral coordination processes—time in which China is already delivering—Beijing secures contracts, market access, and strategic relationships. The EU strategy and the BRI are increasingly converging in terms of content—both emphasize infrastructure, sustainability, and local value creation. But the speed of implementation remains asymmetrical.

A direct comparison makes this tangible: In Cameroon, the Chinese Memve'ele hydropower project competes with the EU-funded Nachtigal power plant. In East Africa, China's Benguela Railway is competing against the EU-funded Lobito Corridor. With the PEACE submarine cable project, China is competing with the EU's fiber optic network in the Black Sea. For almost every European flagship project on the African continent, there is a parallel Chinese initiative. And in each of these competitions, the same pattern emerges: China acts faster, more flexibly, and with a strategic patience that is structurally alien to European institutions.

Europe's strengths – the rule of law, transparency, workers' rights, high technical standards – are simultaneously its handicaps in this competition. They increase costs and lengthen processes. For countries like Senegal, which need mobility quickly and have no ideological preference for European or Chinese supply chains, the cheaper offer is simply more attractive. The Senegalese perspective has its own rationale that must be respected – and that is precisely what makes the problem so difficult for Europe to solve.

African agency and new dependencies

It would be an oversimplification to portray Africa in this analysis merely as a passive arena of geopolitical competition. Many African countries pursue a deliberate multi-vector policy: they utilize Chinese infrastructure financing and European development aid without permanently committing to either side. The Forum on China-Africa Cooperation (FOCAC) in September 2024 provided an opportunity for African countries to set their own priorities after China announced over US$50 billion in financing for the next three years.

Nevertheless, structural dependencies arise that cannot be resolved simply by striving for sovereignty. Those who operate their bus fleets with Chinese vehicles are dependent on Chinese spare parts. Those who have expanded their rail networks with Chinese technology rely on Chinese expertise for maintenance and upgrades. Those who have built their digital infrastructure with Huawei technology are bound to Chinese system architectures. These dependencies grow over time and become more difficult to resolve the more deeply they are embedded in critical infrastructure. Cape Town-based electromobility expert Prian Reddy takes a pragmatic view: Many African countries are financially constrained. Utilizing existing resources, supply chains, and financing options is crucial for Africa to make the leap toward a climate-neutral future. This pragmatic stance is understandable—and yet it simultaneously accelerates the establishment of Chinese system control on the continent.

What Europe needs to do – and why it is hesitating

The instruments for a stronger European response exist in rudimentary form. The Foreign Subsidies Regulation is a step in the right direction: it allows the European Commission to combat Chinese state subsidies even in competitive bidding processes – at least within the EU single market. Enforcement of this regulation has been noticeably tightened since 2025, as the cases of Bulgaria, Lisbon, and others demonstrate. However, these instruments do not apply to EU-funded projects in third countries.

A consistent response would therefore have to encompass several levers. First, the EU could incorporate binding clauses into its development financing contracts that exclude the participation of companies from countries with proven state subsidy dumping – in all EU-managed tenders worldwide, not just within the single market. Second, it could link its development financing more closely to the actual involvement of European companies and European technology standards – without resorting to protectionist measures, but rather with the argument of fair competition: those who benefit from European taxpayers' money must adhere to European competition rules. Third, the EU could more closely link its Global Gateway projects to local value creation in partner countries – not solely through European companies, but through technology transfer and capacity building that fosters long-term commitment.

All of this is currently failing due to a fundamental problem: institutional inertia. Europe finances, regulates, and debates. The decision regarding the Dakar buses has now been postponed until later in 2026 – possibly due to political pressure from Europe. But this is not a strategic success, but rather a delay of the inevitable, unless structural changes follow. The EU has the financial strength and – to some extent – ​​the regulatory instruments. What is lacking is the political will to use these instruments coherently and consistently.

Technology, standards and control of the future

The analysis cannot stop at the current contract value of €320 million. The actual impact is more fundamental. Infrastructure shapes technological standards for decades: Whoever equips Dakar's bus fleet with Chinese natural gas buses today influences which maintenance technologies, fuel infrastructure, digital systems, and training standards will shape the next generation in Senegal and beyond. Whoever supplies electric vehicle components to Nigeria for assembly there sets the standard for tomorrow's African automotive market – a market with over 1.4 billion people and one of the lowest vehicle densities in the world.

In the digital sphere, this same dynamic has progressed far beyond that: African mobile networks, government data centers, and smart city projects bear the significant imprint of Chinese technology companies. The geopolitical relevance extends to data security: Whoever operates the infrastructure controls the data flows. Whoever controls the data flows has insight into economic activities, population movements, and government communications. This is not a conspiracy theory—it is the stark reality of networked infrastructure, a topic discussed with great seriousness in Europe in the context of Chinese 5G providers, but largely ignored when it comes to Africa.

The question that arises from all this is not a particular question about a bus contract in Dakar. It is a question about Europe's role in the reorganizing world. Can Europe be a credible geopolitical actor if it channels its own funding into structures that run counter to the stated goals of its foreign policy? Can Global Gateway be a serious alternative to the Belt and Road Initiative if contracts for Global Gateway projects go to Chinese state-owned enterprises? And can Europe claim to be a fair partner for African countries if its development financing effectively subsidizes China's industrial penetration of Africa?

The capital is insufficient

The Dakar case is not an isolated incident. It is the condensed expression of a systemic problem rooted in the tension between European values ​​and European interests, between development policy and geopolitics, between market liberalism and strategic industrial policy. Europe has the financial resources, the technological capabilities, and—theoretically—the political will to be present on the African continent. What it lacks so far is a coherent strategy that translates these resources and capabilities into geopolitical impact.

China has this strategy. Not perfect – the BRI has suffered significant setbacks, numerous projects have failed, and the debt problem of many partner countries is real. But China has learned to adapt. It has shifted its strategy from large-scale loans for megaprojects to more targeted, technology-intensive investments. It subsidizes its companies so they can compete in any market in the world. And it views development finance not as altruism, but as an instrument of strategic influence.

Europe doesn't need to copy Chinese methods. State-sponsored subsidy dumping, opaque lending practices, and the acceptance of debt traps in partner countries are not models to follow. But Europe must understand that the competition for influence in Africa is a strategic one – and position itself accordingly. This means faster decision-making processes, clearer conditions for the allocation of aid, consistent application of existing rules even outside the single market, and a development policy logic that doesn't naively ignore its own geopolitical interests. As long as Europe fails to do this, it will continue to pay – and China will continue to deliver.