Chinese products bear ‘Made in Greece’ tag, avoid high levies

Hundreds of Chinese products bear the label “Made in Greece” as they are manufactured using parts produced in China which are then assembled in this country to facilitate their circulation in the European Union, with the blessing of the European Commission.

Karel De Gucht, the European commissioner for trade, recently stated that if the EU-China trade balance were measured based on where products are assembled, as opposed to where the parts came from, then the EU’s trade deficit with the Asian economy (amounting to 155.9 billion euros in 2011) would be 36 percent (50 billion euros) smaller.

Greece is at the center of this growing trend as Chinese and other non-European companies that have their products made in China are able to assemble them here without having to pay high levies. They therefore bring the parts in, assemble them, and then export the finished products to other European countries labeled “Made” or “Assembled in the EU,” with Brussels seeing a chance in balancing out bilateral trade.

Besides the levy advantage, there is also that of the trademark, as having a product assembled in Greece gives it a European mantle. Another, albeit rather expensive, solution is the acquisition of European brands. The buyout of an IBM unit by China’s Lenovo is a case in point.

This is the very reason why an ever increasing number of mostly Asian companies are seeking out industrial plots at Thriasio and in the broader region of western Attica. The operation of the container terminal at the port of Piraeus by Cosco and its recent rail link with the national and European railway networks is opening up the route that some companies have already been quietly taking.

This constitutes a new manufacturing model that is also being applied at a Chinese car assembly unit in Lovech, northern Bulgaria. Chinese company Great Wall Motor opened the plant two years ago with cars arriving in semi-assembled parts before being completed on the Bulgarian production line and labeled “Made in Lovech.”

This business plan, in the context of the “global value chain” system, is not just Chinese, as Indian technology enterprises are said to be examining the prospect, as demonstrated by the interest India officially showed last month in the concession of the ports of Thessaloniki and Volos.

A few days ago the government submitted an amendment to Parliament that encourages foreign companies to export goods to Greece in order to then re-export them to other EU member states or third countries.

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