ECONOMY

Businesses react to Chinese agreements with wariness, despite government elation

With Greece heralding agreements signed with the Chinese government as being a vote of confidence in the indebted economy, businesses have reacted more cautiously to the news. The National Confederation of Greek Commerce (ESEE) welcomed recent deals signed by Greece and China but added that a growing number of trade companies belonging to Asian interests have created «serious» problems in the domestic retail sector, flooding the market with cheap Asian goods. Seventy percent of imitation products distributed locally, such as handbags and watches, come from China via Italy, according to ESEE. Illegal consumer goods being traded in Greece are worth some 20 billion euros, ESEE added. «Let’s hope that the Chinese don’t view us as being an area where they only push their own economic interests but instead will prove to be a significant trading partner,» it said in a statement yesterday. On a visit to Athens last weekend by Chinese Premier Wen Jiabao, the two governments signed several deals in shipping, trade and tourism. Greece has heralded the closer ties as being a vital strategic move that will turn the country into a key transport hub for one of the world’s largest economies. The Chinese premier also said his government will buy Greek debt when the country returns to the markets, in comments that have already had a favorable impact on the secondary bond market. ESEE, however, is less enthusiastic and called for caution from the government, pointing out that the trade balance heavily favors China. Exports to China over the last five years have risen at an annual pace of 3.5 percent to 93 million euros in 2009 while imports from China hit 2.17 billion euros last year, an annual average growth rate of some 8 percent. Constantinos Michalos, president of the Athens Chamber of Commerce and Industry (EBEA), the country’s largest business group, said that «based on announcements so far, we need to see the specific investment proposals that will benefit the real economy.» «Proposals that will boost state revenues and jobs,» he told Kathimerini English Edition.