Where one sees challenges another sees opportunities or so the saying goes, and that certainly seems to be the case in Greece according to a Telegraph article. The travails of the Greek economy are well documented in the press, being at the center of Europe’s current malaise, but the Chinese it would seem see this more as an opportunity than a problem.
Bolstered with vast financial reserves, vaulting ambition and a keen eye on further developing export markets in Europe, the Chinese have bought the lease to Greece’s largest container port in Piraeus for the next 35 years. There are currently two container terminals Pier One and Pier Two. The older smaller and shallower Pier One remains in Greek control but the larger and deeper Pier Two has been taken over by China’s state-owned shipping giant Cosco in a £2.8 billion ($4bn) deal to lease the pier for the next 35 years, investing £470 million ($680m) in upgrading the port facilities, building a new Pier Three and almost tripling the volume of cargo it can handle. The container port, Greece’s largest and already a major hub for east/west shipping, can currently load and unload 1.8 million containers a year – meaning 5,000 come and go each day.
The Chinese are quite candid that they see their investment in Piraeus as a gateway into the European market. With the strategic position of Piraeus near the Bosphorus, the port also provides a way into the Black Sea region, central Asia and Russia. By the end of the year, China is expected to make a joint bid with a Greek company to create a 200 million euro ( £165 million) logistics hub at Attica, near the port, to distribute goods from China into the Balkans and the rest of the continent. The Chinese are also in talks to buy a share in the struggling state-owned railway. These are only part of 14 projects that were signed last month when Vice Premier Zhang Dejiang visited the Mediterranean state.
Nor is Greece alone in receiving such attention. Other struggling European economies have been either the target of predatory attention or the beneficiaries of Chinese largesse depending on how you look at it. This month a group of Chinese manufacturers hope to be given approval to develop a £40million (US$ 60m) plot in Athlone, central Ireland, and begin construction of a hub of schools, apartments, railways and factories to create Chinese products. The Chinese plan to ship in 2,000 Chinese workers to construct the site, and eventually employ 8,000 Irish staff in what has been dubbed “Beijing-on-Shannon”.
Some liken the Chinese investments as the Japanese car and electronics businesses of the 1980’s and 90’s, and indeed we may look back on this in the future in the same way. Better to have goods made here and workers employed here than in China if we are going to buy them anyway. Such a mind set has a certain logic to it where both economic areas operate similar standards and operate equitably in terms of access but the problem with China is they do not. The EU has been engaged in a guerrilla war over trade barriers faced by European firms looking to sell into or invest into China that threatens to break out into out right trade war according to this article. Although China is keen to invest in overseas markets, as in this case to provide a strategic foothold for developing the market further in the future, they are unwilling to allow the same unfettered access to their domestic market. To what extent China will be allowed to continue to buy into European assets without allowing reciprocal access remains to be seen. Judging by the glacial pace of European legislators actions in this regard they have probably got a good decade of freedom still ahead of them.