ECONOMY

Sino-Greek trade on the rise

Trade with China is not a one-way street. Greek exports to the Far East nation increased by 21 percent in the January-May 2005 period year-on-year, while more than 50 major Greek enterprises are active in the world’s most populous nation, investing over $1 billion. Business interest in China has increased this year in particular, given preparations for the 2008 Olympics in Beijing. Greek businesspeople do not underestimate China’s growth rate, which is a high 9 percent annually, while food imports in Beijing exceed 50 percent of the market’s total turnover. Annual food and drink sales in Beijing are expected to top $12 billion in 2010. There also are risks, with the economy having two main weak points: These are the poor valuation of non-performing loans of state banks, which if not contained can lead to a funding crisis, and that the current level of investments may lead to overcapacity, risking a return to deflation. Prices in China rose by an annualized 5.3 percent in August, putting more pressure on the central bank to raise interest rates. Industrial products, such as chemicals, machinery and transport material, take a 65 percent share of Greek exports to China. Agricultural and farming products are a distant second with 21 percent, including food, livestock, drinks and tobacco. Raw materials only take a 4 percent share, dominated by marble. Chinese Commerce Ministry data show that from 1992 to end-September 2004 Greek investments translated to 49 projects with a total capital of $1.1 billion and realized investments of $58.49 million. To promote an outward-looking attitude among Greek firms, the Hellenic Foreign Trade Board (OPE) will organize a business mission to Hong Kong on December 13-16 for the food and drink sectors. OPE and the Economy Ministry are also preparing some significant promotional activity for Greek olive oil and other traditional products so as to advertise them during the 2008 Games as well. Among the main companies active in China are: – Intracom: Its Beijing bureau opened in 2001 to scan the country’s market. – FHL Kiriakidis Marbles: Since 2000 its subsidiary Cosmos Building Materials has been operating in Shanghai. – Eurobank: Its Beijing Representative Office has been operating since 2000, aimed at developing banking activities as China’s market is liberalized with its entry to the World Trade Organization. – Hellenic Aerospace Industry (EAB): The investment in Shenyang for the creation of Shenyang Hellenic Aircraft Repairs has been frozen due to problems with EAB’s Chinese partner. – S&B Industrial Minerals: The Sino-Hellenic Industrial Minerals subsidiary operates in Xinyang, with a branch in Shanghai. – ETMA: In 2001 the company signed a deal with the local Logdi Group Corp. for the creation of two companies producing rayon textiles. – Crete Plastics: It agreed four years ago with a Shanghai firm to set up a plastic film production enterprise. – Environmental Protection Technics: Its Polchor China subsidiary has been operating in China for years. – Shipping companies: In 2004 many Greek firms visited China to discuss possible cooperation with shipyards.