Chinese economic engagement in Europe’s periphery: Institutional compatibility and divergent project trajectories in Bulgaria, Serbia, and Hungary

Within the European Union, state-aid, procurement, screening, and foreign-subsidy rules condition the channels through which Chinese-linked projects can proceed and receive public support. Aggregate investment comparisons reveal little about the transaction structures and institutional routes associated with divergent project trajectories. This paper develops a project-level framework of institutional compatibility and route construction, distinguishing institutional entry, project advancement, and post-entry durability. A structured, focused comparison examines eight principal cases in Bulgaria, Serbia, and Hungary, drawing on regulatory, procurement, parliamentary, company, and registry records and assessing each project against the rules applicable at entry. Bulgaria’s Class A certification framework accommodated markedly different ownership, financing, and risk allocations: a Chinese-controlled manufacturer reached operation and expansion, while a predominantly Bulgarian-owned industrial partnership ceased production. The Hungarian cases document substantial public sponsorship within the EU framework through aid, infrastructure provision, and administrative coordination. A supplementary comparison of rolling-stock procurement contrasts bilateral direct contracting in Serbia with EU-governed procurement and foreign-subsidy scrutiny in Bulgaria. EU rules therefore structure the form and scrutiny of Chinese engagement while leaving considerable scope for national sponsorship. The findings highlight the need to assess formal admissibility separately from implementation and durable economic activity.