News:Europe

China ramps up investments in Greece sparking Western concerns

With China Development Bank (CDB) and the Greek Public Power Corporation (PPC) set to sign a cooperation agreement which could be worth many tens of million of dollars, China’s has sought to stress the economic and social benefits of investment cooperation between Chinese and Greek companies as they have been cited as a source of concern for some Western countries.

The CDB / PPC agreement will be signed in Greece’s second city Thessaloniki, 9 September, within the framework of the 82nd Thessaloniki International Fair and will be a feature of the fair, at which China is the honoured country. The nine-day event will have as a focus the promotion of Greece as an energy hub for the Balkans and Europe.

“PPC aspires to have a leading role not only in the reconstruction of the energy sector, but also in its development and modernisation prospects,” the PPC said.

Chinese companies have been investing heavily in Greece in recent months and this has raised concerns among Greece’s neighbours and the wider Europe.

Indeed, 30 August, in response to a question by China's English language Global Times, China’s Ministry of Commerce (MOFCOM) said in a statement: “Chinese companies’ investment in Greece has yielded positive economic and social benefits.” It added, China and Greece have maintained a deep friendship, positive political relationship and a smooth development in economic and trade ties.

In June, State Grid Corp, China’s largest utility, completed an acquisition of 24% stake in Greece’s power grid operator ADMIE for $356m. State Grid’s deal followed another massive investment by China Cosco Shipping in Greece’s largest port, and the home of Greek shipping, Piraeus. Total investment in Piraeus could top $1bn if Cosco fully implements its plans for the port.

These are just the latest in a wave of Chinese investments in Greece. According to the MOFCOM statement released to the Global Times, at the end of June, China has invested a total of $1.3bn in Greek projects such as ports, shipping, telecommunication and photovoltaic.

Such investments into the EU country have reportedly caused some concerns in the West. The New York Times cited such investments as a way of China expanding its “foothold in Greece, and by extension, in Europe.” But MOFCOM, 30 August, termed such investments as “successful examples” of cooperation between Chinese and Greek companies that show the massive potential for further cooperation. The Ministry also pointed to rising Greek investment in China and fast-growing exports to China.

As of end of June, Greece has invested a total of $96.4m in 147 projects in China, and Greek exports to China jumped 44.3% year-on-year in the first half of the year to $180m, according to the MOFCOM statement. Chinese exports to Greece rose 4.3% year-on-year to $2.1bn during the same period.

Reporting its first half financials recently, Cosco Shipping singled out Piraeus reporting group profit from terminal companies in which it has a controlling stake was mainly attributable to Piraeus Container Terminal. In fact Piraeus profits were down 39.4% at just under $11m in the first half, “mainly attributable to completion of construction work” on terminals in the port.

Further, with the privatization of Alexandroupoli port now in process Cosco has already expressed interest. Alexandroupoli is the focus of plans to bring LNG into the Balkans through the construction of an LNG terminal at the northeastern Greek port.

Cosco is already using the port to store and distribute goods to other parts of Europe.

Posted 06 September 2017

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David Glass

Greece Correspondent, Seatrade Maritime

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