Trade with China grows

The new Chinese ambassador in Athens, Tian Xuejun, who arrived last December, seemed very well-informed in his interview with Kathimerini regarding all aspects of Greek-Chinese relations, stressing that one of the main reasons Greece is important to China is shipping. «This is one of the key sectors of the Greek economy and the two countries’ cooperation,» Tian said. «I understand that about 100 Greek ships go to China every year for repairs and that 10 percent of the 4,000 Greek vessels over 500 tons were built in China,» he added, citing as an example of the two nations’ cooperation that some 65 percent of the 110 million tons of oil China imported in 2004 were shipped by Greek-owned vessels. As China’s economy is growing at a breathtaking pace of 9 percent, being the world’s third-greatest exporting power, it will inevitably require the services of Greek carriers, which constitute 20 percent of the global fleet. The Chinese also have a great interest in the building and maintenance of Greek ships, as well as their staffing, according to Tian. While the Chinese depend on Greek ships, Greek textile enterprises and shops are suffering from crushing competition by imports from the world’s most populous state. «I believe these are the phenomena of economic globalization,» said the ambassador. About 100 stores The issue of strong competition by Chinese traders and the reactions of Greek traders is of particular concern to the Chinese Embassy. According to its data, some 8,000 Chinese reside in Greece, mostly in Athens and Thessaloniki, where they operate about 100 stores. As soon as relevant press reports appeared, the embassy invited the Chinese traders’ representatives in order to be fully updated on the situation and to express its official position, which is that all activity has to be not only legal but also of mutual benefit. «The embassy, and myself personally, have done research on Chinese stores,» Tian said, «and we noted that Chinese products in Greece have very good prices and indeed very good quality. I have randomly asked consumers and they said they liked them for those two reasons.» Tian further suggested that both the Chinese traders and the Greek authorities confirm that all activity is legal as far as customs and duties are concerned. So what is the problem? «The cost of Chinese products is comparatively low in relation to Greek textile products’ prices, therefore winning in competition,» he stressed, proposing that «the issue be solved in a calm and collected fashion.» Great potential China has an immense labor force, numbering about 700 million of its total population of 1.3 billion people. Some 250 million are in the cities and the remaining 450 million (equal to the entire population of the EU) resides in the countryside, a largely untapped resource due to the low productivity of the agricultural sector. Every year, the labor force increases by 12 million people, that is, by more than Greece’s total population. Some 2.1 million are university graduates. «The cheap but quality labor force is an advantage for China. Despite this relative advantage, when China agrees on economic cooperation with other countries, it has the principle of reciprocity, seeks common interest,» the ambassador commented before saying that cooperation is based on World Trade Organization principles. Investments in Greece The Chinese government encourages large high-tech companies to invest in Greece; already two such enterprises in the telecommunications sector (ZTE and Huawei) have come to Greece and their first steps have been strong. In 2004, the volume of trade between Greece and China was $1.47 billion (imports and exports), up 25 percent compared to 2003. This figure does not include services (shipping and tourism). Nevertheless, imports are far greater than exports to the giant Chinese market. The Chinese government encourages enterprises to import Greek products, such as olive oil, wine, fertilizers, cigarettes, fruit, peanuts and more, said Tian. «I believe our Greek friends the entrepreneurs will have to boost the promotion of their products in China,» he said, noting that tourism is a new field of cooperation, as the number of Chinese tourists abroad is increasing every year. Great progress «The year 1978 was an important one for China. It was when China applied for the first time a policy of reforms and exposure to the outside world; the changes were immense,» Tian commented. China’s gross domestic product rose by an average 9.4 percent between 1978 and 2004, from $147.3 billion to $1,580 billion. Its volume of trade went from $20.6 billion to $1,150 billion and its currency reserves from just $0.16 billion to $609.9 billion. Most importantly, people living below the absolute poverty level, of not having sufficient food or clothing, were 250 million in 1978 and were reduced to 30 million in 2004. «These figures speak for themselves,» a proud Tian said, but he added, «We still have problems in our economy.» In summary, these are the combination of a large population with the still relatively weak economic foundations and unbalanced development. The aim of the new policy is to deal with these problems «so that society’s and the economy’s development can be complete, sustainable and long-term,» the Chinese ambassador concluded.