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Greece Depends On Chinese Investments

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Last August, when Xi Jinping, the president of China, made an unofficial one-night stopover on the island of Rhodes while traveling to Brazil for a summit of leading emerging markets, Greeceā€™s president and premier flew from Athens to ensure that his stay went smoothly.
President Karolos Papoulias hosted an informal Saturday lunch at a beachside luxury hotel in Mr. Xiā€™s honor. Prime Minister Antonis Samaras personally escorted Mr. Xi around Rhodes’ medieval city. Mr. Xi openly praised the regime’s efforts to shore up a eurozone economy that nearly imploded in 2011. He assured Papoulias and Samaras that China envisions Greece as a pivotal commercial gateway to southern Europe. There was, he added, an evolving and ā€œcomprehensive strategic partnership between our two countries.”
A few years ago, Greeceā€™s economic woes were so stark that even China ā€“ ever-eager to expand in pivotal markets ā€“ was skittish about its high-risk potential.
Now China is reassessing Greek markets and is keen to get in on the privatization of Greek infrastructure demanded by the EU and IMF bailout deal. By sea and by air, Greece is an ideal bridgehead for Chinaā€™s ambitions to expand deeper into Europe, reports a recent Financial Times article.
The article lists the major Greek projects in which Chinese companies have expressed an interest or have already invested in.
A consortium formed by Friedman Pacific Asset Management, a Hong Kong-based fund, and Shenzhen International Airport Group is a potential bidder for the Greek stateā€™s majority holding in Athens International Airport, the capitalā€™s only international gateway.
Later this year, the Greek transport ministry expects Chinaā€™s State Construction Engineering Corporation to participate in an international tender to build and operate a new ā‚¬800m airport on Crete, the countryā€™s most popular tourist island. There is speculation that a Chinese airline will make Greece a hub for Europe-bound travelers from Asia.
State-owned Fujian Shipbuilding, which controls three shipyards in China, has expressed interest in Eleusis Shipyards, a crisis-hit private yard near Athens equipped with specialised facilities and a skilled workforce.
In June, shipbuilding deals worth $3.2bn were signed between Greece and China. They will be financed by the state-owned China Development Bank.
COSCOā€™s Pireaus operations remain the showcase investment. Freight traffic ā€“ the number of containers transferred through the terminal a year ā€“ has reached 2.5 million crates after COSCO’s ā‚¬400m expansion of the facility. The Chinese company has installed state-of-the-art cranes to handle new mega-sized container vessels. Cargo traffic has near quadrupled.
A new railhead at the port has brought in some big names: Huawei, the Chinese telecoms manufacturer, and Sony of Japan have begun shipping products unloaded in Piraeus by train to central Europe.
The only large private Chinese investor in Greece to date appears determined to capture a fresh and expanding market of Chinese tourism. Fosun, a conglomerate that has already acquired a stake in Folli Follie, a Greek jewellery and fashion manufacturer, is participating with Greek and Gulf state partners in a 20-year, ā‚¬5bn euro project to develop the sprawling coastal site of the former Athens airport. Twice the size of Monaco, it will develop into a leisure and commercial center.
Currently, the biggest constraint on tourism growth is a lack of direct flights to Athens from Beijing and Shanghai.
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