Lian Guo’s prices make his customers very happy, but are a bit of a headache for his local competitors and the European Union. Guo owns one of the hundreds of new Chinese clothes stores in Athens and business is booming, despite efforts by the EU to restrict surging textile imports from China. The rise in Chinese imports to Greece, which saw the second-biggest leap in the EU last year, puts the Mediterranean nation at the head of the dispute over Beijing’s cheap goods and makes it a case study for those who fear such trade will hurt Europe. «Business is good,» Guo said, sitting in his shop surrounded by dozens of open cardboard boxes full of men’s, women’s and children’s clothes imported from China. «Most of my clients are Greeks because they like the prices of my products.» The popularity of such stores has turned one of the central shopping districts in Athens into Europe’s newest Chinatown. More than 200 mainly Chinese clothes stores have appeared in and around central Koumoundourou Square in Athens, while every district in the capital now boasts a small Chinese contingent. July will see the inauguration in Athens of the first Chinese shopping mall in Greece – a six-story building which will sell everything from clothing to cooking utensils. A second is already in the works. Prices, ranging from just 5 euros ($6.13) for a shirt to about 8 euros for a pair of trousers, mean Chinese traders like Guo are snapping up custom from Greek shops that offer their products at prices up to five times higher. Low-cost imports surge «Why would I buy something that costs 50 euros when I can get it for 5,» said Katerina Ioannidou, browsing through Chinese stores in Athens. «I have a husband and two young boys who constantly need trousers, shirts and shoes and you can calculate how much money I save by shopping here.» Annual imports to Greece from China topped 1.4 billion euros in 2004, four times as much as eight years ago. With a 17 percent rise from 2003, Greece is second only to the Netherlands among EU nations in the Chinese cheap goods invasion. Dutch imports from China rose 21 percent last year. And while Chinese exports to the EU reached a total of 117 billion euros last year, exports to China from the bloc are less than half that at 46 billion euros. Alarmed by the import rise, the EU has called for talks with China on T-shirts and flax yarn – used in making linen cloth – that could lead to curbs on imports to the 25-nation bloc. But Guo is not concerned. «I’ve been here two years now and things have only got better and better,» he said. «As long as people, and there’s more of them every day, cannot afford the expensive local clothes and want cheap products, I will do good business.» That is exactly what worries the Athens Chamber of Commerce. «The sharp increase of Chinese imports and their sale in local shops here is a very, very big concern for us,» the chamber’s general secretary Panayiotis Koutsikos said. «Legally imported products are cheaper and of good quality. The only way is for Greek businesses to adjust their production and produce better quality products at more competitive prices,» he said. A recent survey of 300 Greek manufacturing companies revealed some downward pressure on prices due to the increased competition from Chinese goods. «If we don’t change the way we produce, then the train of prosperity will pass us by,» Koutsikos said.