Greece and China pro­gress­ing slowly

Tsipras visit bodes well for fu­ture, but course of Cosco’s in­vest­ment in Pi­raeus will test Greek cred­i­bil­ity

Kathimerini English - - Front Page - BY NICK MALKOUTZIS

ANAL­Y­SIS “Do not fear go­ing for­ward slowly; fear only to stand still,” says a Chi­nese proverb, which if ap­plied to Greece’s trade re­la­tions with China might pro­vide some op­ti­mism for the fu­ture.

Prime Min­is­ter Alexis Tsipras’s visit to China last week was aimed at en­sur­ing that the process of de­vel­op­ing trade links with Bei­jing and at­tract­ing more Chi­nese in­vest­ment pro­gresses and does not risk stalling as was feared last year when Greece’s po­si­tion in the eu­ro­zone was put in doubt by the gov­ern­ment’s pro­tracted ne­go­ti­a­tions with the coun­try’s lenders.

Tsipras’s visit to Bei­jing and Shang­hai, where he met Chi­nese Pres­i­dent Xi Jin­ping, Premier Li Ke­qiang and the heads of sev­eral lo­cal firms, was the third such trip by a Greek prime min­is­ter in the last 10 years. Costas Kara­man­lis trav­eled to China in 2006 and An­to­nis Sa­ma­ras vis­ited for five days in 2013. Each time there has been great ex­pec­ta­tion in Greece about what the vis­its could bring, such as hopes for a sud­den surge in olive oil ex­ports or a splurge of in­vest­ment by Chi­nese busi­ness­men, but the re­sults have tended to be mod­est. Steps in the right di­rec­tion, but small steps.

The Cosco deal for Pi­raeus port has been a notable ex­cep­tion to this: It was set up by the Kara­man­lis gov­ern­ment in 2008, when the Chi­nese gi­ant se­cured a 35-year con­ces­sion agree­ment for the con­tainer ter­mi­nal, built upon dur­ing Sa­ma­ras’s premier­ship, when Cosco ex­panded Pier III at the Pi­raeus Con­tainer Ter­mi­nal, and now de­vel­oped fur­ther un­der the Tsipras-led coali­tion, which has just awarded the ship­ping com­pany a 67 per­cent stake in the Pi­raeus Port Author­ity (OLP). From the orig­i­nal deal in 2008, worth more than 4 bil­lion euros over the course of the lease, to the lat­est agree­ment, which will see the Greek pri­va­ti­za­tion fund take in al­most 370 mil­lion euros, Cosco has been the most sig­nif­i­cant in­vestor in the Greek econ­omy in re­cent years.

The in­di­ca­tions are that it will also con­tinue to be a ma­jor player in Greece in the years to come. Econ­o­mists ex­pect that over the long term, Cosco’s in­vest­ment in Pi­raeus could lead to ad­di­tional an­nual rev­enues of some 5 bil­lion euros and the cre­ation of 125,000 jobs.

Dur­ing Tsipras’s visit, Cosco chair­man Xu Lirong an­nounced that the com­pany would in­vest more than half a bil­lion euros in Pi­raeus over the next five years.

Build­ing on this in­vest­ment, though, re­quires fur­ther work from the Greek side. The em­bar­rass­ment that the Greek gov­ern­ment suf­fered when Cosco re­cently pointed out that the terms of its agree­ment for the pur­chase of a ma­jor­ity stake in OLP had been changed in the draft law sub­mit­ted to Par­lia­ment high­lighted how eas­ily do­mes­tic po­lit­i­cal ills can un­der­mine even such a ma­jor in­vest­ment. Sim­i­larly, Xu made an ap­peal to Tsipras dur­ing his visit to Shang­hai to help end the rolling strikes by Pi­raeus dock­work­ers who fear the lat­est pri­va­ti­za­tion will lead to them los­ing their jobs.

Ge­orge Tzo­gopou­los, the founder of the Chi­naand­ web­site, which fo­cuses on re­la­tions be­tween the two coun­tries, be­lieves that the way Greece han­dles de­vel­op­ments at the port will be the most im­por­tant fac­tor in de­ter­min­ing Cosco’s fu­ture in­vest­ments in the coun­try and how Bei­jing will re­gard Athens as a strate­gic part­ner.

“If in­vest­ments pro­ceed smoothly with­out many strikes, the mes­sage to be sent in Bei­jing will be en­cour­ag­ing,” he told Kathimerini English Edi­tion.

“China is happy with SYRIZA as the party con­cluded the pri­va­ti­za­tion of Pi­raeus Port Author­ity,” he added. “How­ever, SYRIZA’s ide­o­log­i­cal op­po­si­tion to for­eign in­vest­ments along with some un­ex­pected ges­tures [such as Ship­ping Min­is­ter Theodoros Drit­sas’s ap­par­ent at­tempt to mod­ify the con­ces­sion agree­ment] make China quite re­served in trust­ing the Greek gov­ern­ment. There­fore, what is re­quired is more cred­i­bil­ity from the side of Athens.”

Cosco has shown it is se­ri­ous about Pi­raeus through the fi­nan­cial in­vest­ment it has al­ready made but also in the plans that it has for the fu­ture. Xu told Tsipras last week that Cosco’s aim is to turn Pi­raeus, which it has so far mainly used as a hub to ex­port Chi­nese goods to Europe, into the “big­gest tran­sit port in the Mediter­ranean.” The onus is now on the Greek gov­ern­ment to show that it is equally se­ri­ous.

“Greece, which is the first stop on China’s way to Europe, can be­come a bridge be­tween China and the West, be­tween Asia and Europe,” Tsipras said dur­ing his visit last week, ap­pear­ing to tap into the spirit of Bei­jing’s “One Belt, One Road” strat­egy. Launched in 2013 by Pres­i­dent Xi, the strat­egy is un­der­pinned by a ma­jor in­vest­ment pro­gram, mostly fo­cused on in­fra­struc­ture, which will recre­ate the famed Silk Road over land and sea in or­der to pro­vide Chi­nese ex­porters with di­rect ac­cess to global mar­kets. In 2015, Cosco trans­ferred 3,030,000 twenty-foot equiv­a­lent units (teus) through Pi­raeus com­pared to 2,520,000 in 2013, un­der­lin­ing the port’s im­por­tance as a trade link.

Be­cause of its lo­ca­tion, Pi­raeus could prove a sig­nif­i­cant fac­tor in Bei­jing’s ef­forts to cre­ate these trade routes. It could also es­tab­lish the plat­form for fur­ther ac­tiv­ity be­tween Greece and China. Ahead of Tsipras’s trip, Chi­nese Am­bas­sador to Greece Zou Xiaoli spoke of Pi­raeus act­ing as a bridge, or “dragon’s head,” for co­op­er­a­tion in other ar­eas.

The po­ten­tial is there for Greece to ex­port to China the afore­men­tioned olive oil but also min­er­als and phar­ma­ceu­ti­cals, among oth­ers. Mean­while, Athens can also look to China for in­vest­ment in real es­tate, tech­nol­ogy and in­fra­struc­ture. For ex­am­ple, China’s largest pri­vate con­glom­er­ate Fo­sun, whose top rep­re­sen­ta­tives Tsipras met in Shang­hai, will be in­volved in the de­vel­op­ment of the for­mer Athens air­port at Elliniko, while Chi­nese telecom­mu­ni­ca­tions man­u­fac­turer ZTE, whose ex­ec­u­tives also met with Tsipras, just signed an agree­ment with Greek firm Forth­net to work to­gether on the de­vel­op­ment of faster broad­band, or next-gen­er­a­tion ac­cess (NGA) in Greece.

How­ever, a trip to China by the Greek prime min­is­ter will on its own not be enough to en­sure that the Sino-Greek re­la­tion­ship bears fruit. “China is highly in­ter­ested in ex­pand­ing its pres­ence in Pi­raeus and from the mo­ment this is hap­pen­ing, re­la­tions can im­prove at the po­lit­i­cal, eco­nomic, and cul­tural level,” said Tzo­gopou­los. “Prospects for the fu­ture are good but a sin­gle visit is not suf­fi­cient. Sys­tem­atic work is now re­quired. The eco­nomic co­op­er­a­tion with China is not as easy as it is of­ten pre­sented in the me­dia dis­course.”

In the wake of Tsipras’s five-day visit to China, it seems the goal for the Greek gov­ern­ment must be to move for­ward, even slowly, in its re­la­tions with Bei­jing, but to avoid at all cost the pos­si­bil­ity of the process com­ing to a stand­still.

Xu Lirong (l) ap­pealed to Alexis Tsipras (c) to help end the rolling strikes by Pi­raeus dock­work­ers who fear the lat­est pri­va­ti­za­tion will threaten their jobs.

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