This article was published by Al Jazeera International.
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| COSCO plans to develop Piraeus-based cruise shipping in 2020 as a particularly lucrative industry |
ATHENS, Greece – Greece hailed Chinese President
Xi Jinping’s first official visit to Greece on Monday as a “new era” in what is
an already close trade and investment relationship being closely watched by the
United States and the European Union.
“Greece recognises China not only as a great
power but also as a county that has won for itself, not without difficulty, a
leading geostrategic economic and political role,” prime minister Kyriakos
Mitsotakis told Xi.
Greece seems eager to play a greater role in
China’s overseas development. The two countries’ delegations signed 16
memoranda of co-operation, the most important of which outline new Chinese
energy investments in Greece.
One establishes an Athens branch of the
Industrial and Commerical Bank of China to finance renewable energy projects.
Another facilitates a 50MW solar power station on the island of Crete being
built with technical expertise from the China Energy Engineering Group.
In an editorial published before his arrival, Xi
laid out his vision for increased cooperation “in all areas”.
“China and Greece must together promote the
building of a new type of international relationship based on respect, justice
and mutually beneficial cooperation,” he said.
The ‘Head of the Dragon’
Greece-China relations took off this year when
the four month-old conservative New Democracy government approved 611.8mn
euros’ worth of Chinese investments that had been frozen for 18 months under
the previous, Syriza government.
Over the next five years, the investments, referred
to as the ‘master plan’, will bring to almost $3bn the amount the state-owned
China Ocean Shipping Company (COSCO) will have spent in the port of Piraeus, China’s
signature investment in Greece, and one which Xi refers to as the “Head of the
Dragon”.
COSCO has been developing Piraeus as an entry
and trans-shipment point for Chinese manufactured goods for a decade. Its
strategic advantage to container shipping over the ports of northern Europe is
that it saves a week’s sailing and almost $2mn per trip. That makes it a
crucial link in China’s Belt and Road initiative – a series of hundreds of
infrastructure projects aiming to lower the cost of Chinese exports to Europe
and Africa.
Thanks to COSCO’s investments, container throughput
at Piraeus rose from 685,000 in 2010 to five million containers last year. Piraeus
will this year become the Mediterranean’s biggest container port, and by some estimates
handles ten percent of Chinese commodities exported to Europe; but that no
longer seems enough.
Mitsotakis and COSCO chairman Xu Lirong outlined
a bigger vision in Shanghai on November 4.
"We
intend to make Piraeus the biggest port in Europe and the master plan ensures
that we will succeed,” said Xu. “We want to make Piraeus a global
trans-shipment centre on the Singapore model."
This openly pits Piraeus against the likes of
Hamburg and Rotterdam, and would likely cost billions in additional rail and
port infrastructure.
“Any port is as good as its connections to the
hinterland. Thanks to excellent hinterland connections by river, road, rail and
pipelines, Port of Rotterdam is Europe’s biggest port, both in total throughput
as well as in container handling,” Port of Rotterdam spokesman Leon Willems
told Al Jazeera in a written statement.
“In
the coming months, we expect container throughput to pass the 15 million
[container] a year milestone. It is not for Port of Rotterdam to determine
whether other ports can copy this achievement nor how they envisage to surpass
this,” he said.
Natural allies
In maritime trade, Greece and China seem to have
a natural area of cooperation.
“We are a nation of seafarers. Greeks control 25
percent of the world’s oceangoing merchant fleet. The synergies with China, the
world’s biggest export economy, are obvious,” Mitsotakis said at the China
International Import Expo in Shanghai on November 5.
By investing in Piraeus, China is helping to
realise a decades-long dream of Greek shipowners to create a cluster of shipping
services such as ship management, ship repair, finance and insurance.
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| A 50,000 tonne tanker enter's COSCO's new drydock in Piraeus' ship repair zone at Perama. Ship repair is a growth area for the port's operations |
The benefits go both ways. Chinese banks have
extended $3bn in loans to Greek shipowners to build ships in Chinese shipyards.
Mitsotakis said Greeks had built more than a thousands ships in Chinese
shipyards over the past 15 years, worth over $50mn.
“Mitsotakis is highlighting … how open Greece is
for business, how much it has diversified, opened its sectors, laying out the
red carpet, and in doing this he is sending a message to others,” says
independent economist and China expert Jens Bastian. “If the Chinese are doing
this, then the Americans can also do it, the French the Germans, the Swiss, the
Italians can do it. He means to address other constituencies in other
countries.”
But some analysts warn that for all its warmth, the
Greece-China relationship is also highly asymmetrical.
“On the basis of calculations we’ve made… I
think the Greek side may not be gaining more than one percent of the overall benefits
to be drawn from [Piraeus],” says Plamen Tonchev, who heads the China Unit at
the Institute for International and Economic Relations in Athens.
“Think of the worth of the content of each
container. We may be talking about 30-40bn euros’ worth of all these
commodities. Compare the overall worth of all those commodities with what is
going into Greek state coffers and you’ll see that there’s a huge gap between
those two figures,” he says.
COSCO has raised Piraeus’ turnover by a third
and its profitability fourfold. Last year it paid $11mn in dividends, of which
24 percent went to the state.
Political ramifications
Although it approved COSCO’s buyout of the
Piraeus Port Authority (PPA) in 2016, the European Commission has also
expressed its reservations about Chinese influence in Greece.
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| Piraeus' ship repair zone in Perama in full swing |
This influence was most clearly suggested under
the Syriza government, which came to power in 2015 to end austerity policies
the Eurozone had been imposing on Greece since 2010.
Syriza tried and failed to fund the government
through large-scale lending from Russia and China, hoping that this would counterbalance
the leverage held by the Eurozone, which owns about two thirds of Greek debt.
Perhaps as part of this effort, Syriza appeared
to volunteer a political alignment with China. In June 2016, shortly after the
PPA sale, Greece blocked a common EU statement calling on China to respect the
International Law of the Sea[1].
China had just lost an arbitration brought by the Philippines to the International
Court at The Hague over fishing rights in the Spratly Islands - a disputed
territory between the two.
Croatia and Slovenia also opposed the statement,
but it was the objection of Greece, an older EU member and traditional defender
of the Law of the Sea, that raised eyebrows.
Responding to questions of political influence, then
foreign minister Nikos Kotzias lashed out at other EU member states with bigger
Chinese investments. “For them it’s business as usual, but if we sell something
it affects our political stance. This is hypocrisy and doublespeak and I have
told them so.”
A year later, Greece again raised hackles at the
UN Human Rights Council in Geneva, when it blocked a common EU statement
calling on China to respect freedom of speech.[2]
It was the first time the EU failed to make its unanimous annual
statement.
Kotzias’ position here was even more startling:
“I respect that the Chinese have a different opinion on human rights… Are human
rights as the West perceives them generally applicable? Or do some people have
a different understanding? One has to respect that. We believe that they are
generally applicable. But not everyone believes what we believe.”
Greece has consistently called upon others,
especially neighbouring Turkey, to respect international maritime law and human
rights. Its modification of both standards within a year was unprecedented.
New Democracy has done the opposite to Syriza:
it has released COSCO to complete most of its investments, but reaffirmed Greece’s
Western orientation.
Still, the US is wary. During a visit to Athens
last month, US secretary of state Mike Pompeo warned the Greeks against China.
Sometimes, he said, “a country shows up with a facially commercial product, but
it turns out that that product is being offered for political interest.”
He especially warned Greece xagainst buying 5G
telecommunications technology from China. “You’re showing up to provide maybe a
telecommunications network because you want your communist party to be able to
steal all the information that going to move across that network,” Pompeo said.
Mitsotakis is treading a fine line between old
and new allies, as he strives to maintain stability and deliver on his promise
of growth and jobs. During his visit to Shanghai last month, the government
said it was in talks with Chinese telecommunications giant ZTE to build a
factory in Greece to manufacture telecoms equipment.
Tonchev believes Greece’s political flirtation
with China is over. “Greece needs the US and EU,” he says. “There’s a lot of
tension in the eastern Mediterranean. There’s an unpredictable Turkey next
door. And China doesn’t have a role to play in this geopolitical equation.”
But China is unquestionably going to great
lengths to buy a long-term position in Greece. And the fact that this
investment began during a decade when Greece’s econom shrank by a quarter due
to austerity, make the bond all the stronger.
“Your company and China as a whole believed and
invested in my country when many felt that investment prospects in Greece were
nonexistent,” Mitsotakis told Xu in Shanghai.
He appeared to complete the sentence a week
later, as he told Xi in Athens: “Now that our country is developing again, it
is regaining a leading role, a leading position, not only in our broader
neighbourhood but also in Europe as a whole. We are not merely partners. We are
broadening our common goals.”
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