Chinese putting wind in sails of Greek recovery

Greece rolls out the red carpet Thursday for Chinese Premier Li Keqiang as the cash-strapped eurozone nation looks for Chinese investment to put wind in the sails of its recovery.

Li’s visit comes just a month after his Greek counterpart Antonis Samaras traveled to China to tout his troubled but improving economy as an attractive entry point for Chinese investment into the European Union.

With Greece now on the path to recovery, Li’s two-day official visit to Athens marks Beijing’s renewed interest in investment prospects up for grabs.

Chief among them is a 67-per cent stake in the Piraeus port authority, the largest in the country.

Chinese transportation giant COSCO, which already has a major foothold after having won in 2008 a 35-year concession to expand the two main container terminals at the port, is a favorite.

“This is the first time for a Chinese company to obtain a long-term concession for a European port,” Chinese vice foreign minister Wang Chao said ahead of the visit, referring to the 2008 deal.

“So, it is very significant. Over the past four years, the operation of this port has been very good. And it has made good contributions to promoting the local economy and increasing employment,” Wang said.

The first visit to Greece by a senior Chinese official in four years will see the signing of a joint declaration, a set of government-to-government agreements and a number of business contracts.

The Greek government said Li is also scheduled to travel to Crete, where the Tymbaki port and the airport of Kasteli have been cited as potential investment targets for China.

Overall, a dozen ports around the country including in Greece’s second-largest city Thessaloniki are to be privatized under a state asset program mandated under the country’s EU-IMF debt rescue.

The last visit by a top Chinese official — then premier Wen Jiabao — was in 2010, at the start of Greece’s economic crisis.

The selection of COSCO in 2008 to expand the container terminals at Piraeus made waves, but subsequent efforts by the Greek state to secure Chinese investment in other projects — including public railways and the Athens airport — had little success.

But now with the specter of Greece going bankrupt and a breakup of the euro receding, Chinese investors have begun to show renewed interest.

Earlier this year a group including Chinese conglomerate Fosun was selected to lead a €6 billion (RM26.3 billion) redevelopment of the old Athens airport of Hellinikon into a housing and leisure complex.

Chinese shipyards are also the main beneficiary of a building drive by Greece’s merchant shipping sector, which accounts for seven per cent of the nation’s gross domestic product and employs some 192,000 people.

China, the world’s biggest shipbuilder, currently has 192 orders from Greek shipping companies according to UK-based sector observer Fairplay.

Korean shipyards follow with 189 new buildings, while Japan has 27.

The positive mood was evident earlier in June at Posidonia, the biennial Greek shipping exhibition.

“Greeks are the most important clients for China. Greece is the biggest market,” said Bill Chen, vice-president of Veritas classification bureau in Shanghai.

“In 2013 there were quite a number of new buildings, the market is warming up after the crisis,” he told AFP.

Greece has one of the world’s largest shipping sectors, accounting for more than 16 per cent of the global fleet and close to half of the tonnage carried by European vessels.

In total the Mediterranean country has 3,669 ocean-going ships of over 1,000 gross tonnage.

“It is good for both (Greece and China) to develop our industry and get more efficient... (Chinese) shipyards have a lot of capacity,” said Jack Chou of Shanghai-based Merchant Ship Design and Research. [AFP]