US President John F. Kennedy once observed that “When written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger and the other represents opportunity.”
The Greek economic crisis certainly presented “opportunity” – the opportunity to reshape the economy to become more competitive globally and to become more open to foreign investment. China availed itself of the opportunity.
When the financial crisis forced Greece to pursue privatizing Piraeus, the port of Athens since ancient times, China stepped forward. Despite early resistance from the government of Alexis Tsipras to sell to China Ocean Shipping Company (Cosco), the requirements for a third bailout and $5 billion in investment sealed the deal.
The success of this deal is apparent: Container volumes have grown by more than 700 percent; Piraeus is poised to become the Mediterranean’s biggest port and the seventh biggest in Europe next year. And with Cosco making substantial investments in Balkan railroad networks, Piraeus will soon be a major port not only for Southeast Europe, but for Central Europe as well.
China’s “opportunity” has been met with cries of “danger” from the United States. In their keynote addresses to the Delphi Economic Forum/Kathimerini Conference in Washington, DC this past November, both Secretary Wilbur Ross and Senator Bob Menendez stressed (for the Greek part of their audience) the need for caution and diligence when it comes to dealing with China.
It may be tempting to discount such warnings as American officials trying to gain the upper hand in efforts to invest in Greece. Elizabeth Economy, the C.V. Starr senior fellow and director for Asia studies on the Council on Foreign Relations, made it clear to me that the US isn’t focused on just any Chinese investments.
According to Economy, the Trump administration and Congress have been “energized around the idea that China poses a challenge to the US unlike any we have seen in recent history.” The US is certainly not taking a back seat to China in economic competition – Economy pointed out that overall American investments in Africa surpass China’s (despite all the anxiety over China outdoing the US), and they don’t come with the strings that Beijing attaches. She argued that what most alarms the US is that “what China is doing is getting its foot in the critical infrastructure of Greece” and investing in the technology and infrastructure that are going to be central to the global economy for the next 50 years.
In an attempt to counter Chinese investments in developing countries, Congress passed the Better Utilization of Investment Leading to Development (BUILD) Act, a bipartisan bill creating a new US development agency – the US International Development Finance Corporation (USIDFC) – and President Donald Trump signed it into law. However, Greece and all the European countries that are part of the land and sea network Cosco is building up from Piraeus into Central Europe don’t presently stand to benefit from the BUILD Act.
These exclusions have been noticed, and several key players are working to rectify them. In his Delphi Economic Forum speech, Senator Menendez followed his warnings about Chinese investments in Greece with an admonition that the US must do more. His original co-sponsor of the Eastern Mediterranean Security and Energy Partnership Act – Senator Marco Rubio – is as wary of China’s global ambitions as anyone and prioritized countering China in the Eastern Mediterranean and Europe. Finally, several administration officials are trying to apply BUILD Act investments to certain strategic investments in Greece (e.g. energy and infrastructure).
Greek political and business leaders may be too sanguine about how the growing Sino-American strategic competition may affect Greece. Economy noted the view in Washington that “Greece has already fallen prey to some of the same pressures that come from too much reliance on Chinese investment and potential for more investment” and specifically mentioned Athens’ efforts to water down EU votes on human rights and the South China Sea.
In some respects, Greece is between a rock and a hard place. It needs foreign investment, and China is a more than willing partner.
But Greece needs to be honest about the drawbacks – whether in terms of Beijing’s expectations or Washington’s impressions – of getting closer to China. Economy’s book on China, “The Third Revolution: Xi Jinping and the New Chinese State,” is a must-read for Greek policy-makers who are trying to navigate this dilemma. Athens should prioritize BUILD Act incentives and other joint EU-US programs (that could, for example, counter Huawei) in its bilateral agenda with Washington.
Another book that Greek policy-makers should read is Graham Allison’s “Destined for War,” in which the Harvard scholar describes the Thucydides Trap: When a rising power threatens to displace a ruling one, the most likely outcome is war. According to Allison, China and the US are reprising the roles of Athens and Sparta during the Peloponnesian War. Greece must remain on guard to avoid becoming the 21st century Melos.
Endy Zemenides is executive director of the Hellenic American Leadership Council.