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Greece - China Relations

The year 2017 was the year of China-Greece Cultural Exchanges and Cultural Industry Cooperation, while in September 2017, China was the honored country of the Thessaloniki International Fair. Addressing Chinese entrepreneurs 28 Marach 2017, Deputy Minister of Economy and Development Stergios Pitsiorlas stated that the strategies of China for the new Silk Road coincide with the Greek government's strategy for a multidimensional role of Greece in the region.

Greece was in a "subordinate position," due to its very large trade deficit with China: 12 billion euro, plus Chinese shipyards were building 20 billion euro worth of Greek ships as of 2008. Greece accordingly generally supported positions of importance to the Chinese. This included Greek support for China's receiving Market Economy Status in the world of trade and for lifting the EU arms embargo. Also, unlike most other EU countries, Greece did not have an office in Taiwan, and Greece kept a low profile on human rights issues in China, for which the PRC was grateful.

When COSCO SHIPPING arrived in 2010, Piraeus port was listed Number 93 in the world and by 2017 was ranked 38. The terminal's connection to a railway in 2013 gave a significant boost to a plan to turn Piraeus not only into a key transit hub and distribution center, but also a major logistics center in the Mediterranean within the context of the Belt and Road Initiative.

After the Chinese investment, Piraeus Container Terminal (PCT) piers were expanded and upgraded, modern cranes were erected, and the terminal has been linked to the railway network connecting the port to central Europe, the number of containers loaded and discharged skyrocketed. Cargoes loaded and unloaded at the port totaled 3.74 million TEUs (20-foot equivalent units) in 2016, up from 880,000 TEUs in 2010, when COSCO Shipping's subsidiary Piraeus Container Terminal (PCT) took over the management of Piers II and III.

People's Republic of China President Hu Jintao paid a state visit to Greece 24-26 November 2008. This was the first visit to Greece by a PRC Head of State since 2000. Greek President Papoulias had visited China in June; PM Karamanlis last visited China in 2006. During the Athens visit, Hu met with Papoulias, Karamanlis, and the heads of the main opposition PASOK party and the Communist Party of Greece (KKE).

The Greeks clearly did not believe this show of support for China was reciprocated. The Chinese had become much more "aggressive" of late. A few years ago, they treated Greece with more respect, but now they sought to impose their wishes on Greece. President Papoulias' discussion with Hu on the Macedonia name issue. Papoulias had told President Hu, "We support you on Taiwan, Tibet, and Market Economy Status, but we need your support on FYROM."

The Chinese had three goals in the visit. The first was to repay Greece for the visit of President Papoulias to China and the support Greece had shown to China with the Olympics. The second goal was renewal of Greek-Chinese friendship. Greece and China were "comprehensive strategic partners," as established in their 2006 agreement. Pprecisely what that meant: "comprehensive" referred to the fact that China and Greece would agree on issues across the board and not cherry pick when it was convenient. Their partnership at the same time was "strategic" because it focused on the global context and was long-term, not simply a marriage of convenience for the present.

Expanding "pragmatic cooperation," that is, economic and business interaction, was the third Chinese goal. China wanted to "go global" but had had problems in securing a foothold in Western countries due to mistrust. Such mistrust did not exist in Greece, according to Wei, and increasing economic ties between China and Greece was an important step for China. Wei said that half of Chinese exports were carried on Greek-owned vessels, while 60 percent of China's oil imports arrived on Greek ships.

During the visit, PM Karamanlis signed an agreement granting the Chinese firm COSCO Pacific Ltd a 35-year concession on the container terminal at the port of Piraeus. Under the agreement, which China was awarded in June and which represented the largest-ever such deal with a foreign power to control such an important aspect of the Greek economy, COSCO would pay 4.3 billion euro over 35 years and would renovate one pier and build another. China intended to have only one Chinese national running the container operation with an otherwise entirely Greek staff.

It was not clear why the Chinese had forced their President on the Greeks at short notice, though apparently they wanted to conclude the COSCO port concession agreement as quickly as possible. The COSCO agreement had been stuck in the Greek bureaucracy for some time, but the visit had forced it out.

The COSCO concession had been Karamanlis' idea. Press reports early on indicated that the Piraeus port concession was to be done by an open and fair competition, though as it developed politics may have played an increasingly significant role.

The Greek government shortlisted China's Cosco Group in 2014 as a potential buyer of a 67 percent stake in Piraeus Port Authority. But Greece stopped the sale in January 2015, saying it would be put on hold as newly elected Prime Minister Alexis Tsipras halted privatization plans agreed under Greece's bailout deal.

In 2016 COSCO SHIPPING purchased the majority stake in Piraeus Port Authority (PPA) with 368.5 million euros (402.7 million U.S. dollars) in one of Greece's biggest and most strategic privatization. It extended COSCO SHIPPING's business in the port from container terminal to cruise terminal, ferry terminal, car terminal, shipyard and logistics.

According to the Hellenic Republic Asset Development Fund, the total value of the PPA agreement amounts to 1.5 billion euros (1.6 billion dollars) until the expiration of the concession in 2052. The China COSCO Shipping deal for Piraeus was the most successful infrastructure cooperation project in Greece. In a country suffering from high unemployment -- with rates reaching up to 65 percent among youth -- the investment has opened prospects for jobs.

Chinese President Xi Jinping told Greek Prime Minister Alexis Tsipras on 15 May 2017 in Beijing, efforts should be made to build the Greek Port of Piraeus into a key transfer point for containers in the Mediterranean, a bridgehead for land-ocean transportation and an international logistics center to support the China-Europe Land-Sea Express Line and the Belt and Road Initiative.

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Page last modified: 14-07-2017 18:49:54 ZULU