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China Eyes Greece Investment as a Staging Post for EU Operations

November 13, 2014

By Ioannis Michaletos

The Chinese state and private corporations are literally stocked with US dollars, having in excess of $4.2 trillion foreign currency reserves as of November 2014, while also being in the process of diversifying their asset portfolio from finance (the stock market, bonds and securities) to tangible, physical assets, which have suddenly become bargains around the world.

Greece, along with the rest of the Balkan states, has been eyed by Beijing for quite some time as an ideal route for commercial, industrial and other purposes into the EU. The present report sheds light to the most important companies, and some key deals being prepared between Athens and Beijing. Projects selected herein are those that seem likely to go ahead and those that enjoy substantial backing from both countries’ political and business elite.

The Maritime Sector

Activity is witnessed between the China Development Bank, the ICBC, Export-Import Bank of China, with the following Greek companies: Costamare (a leading owner of containers), Libra Group, Thenamaris (a cargo delivery company), Diana Shipping, Ocean Bulk Shipping and Veritas Ship Management.

The total sum of deals which includes low-cost credit lines for the construction of ships exceeds 3 billion USD.

The Energy Sector

From the Chinese side, the above-mentioned ICBC is involved, along with Sinohydro Corp and SUMEC with the following Greek companies: TERNA, EDF EN Hellas with a total sum of around 1.5 billion USD for the construction of renewable energy projects in Greece and the Balkans.

Real Estate Sector

In this sector, along with the China Development Bank, FOSUN Group is working with LAMDA Development and Enterprises Greece, on deals totaling 500 million euros for the construction of hotels, residential zones and shopping centers.

Agricultural Sector

COFCO, China Light Resource, U-Feel, Anhui Wine Mall, Shanghai Meditela, Shanghai Chao Shang and the Greek companies: Boutari Exports; Pavlidis; Mavrofidopoulos SA; Alpha Estate; Μediterra, and EMELKO.

The deals refer to exports of mostly wine and olive oil from Greece worth around 165 million USD.

All the above are in the process of either completion or commencement.

Listed below is another set of even grander projects that are currently being discussed but have been derailed from their original timetable due to likely early elections in Greece, most probably to be held in early 2015.

In one, the Chinese Development Bank is to hand out a 1.4 billion USD low-cost credit line for Greek small- and medium-sized companies wishing to expand their business in China.

Shenzhen Airport and Friedmann Pacific Asset Management have a declared interest to buy around 50% of the Athens International Airport shares from the Greek state in a deal estimated to be worth 1.3 billion USD.

Meanwhile, Chinese state shipping company COSCO, already long present in the port of Piraeus near Athens, would like to acquire a 67% share in the port from the Greek state for a reputed 750 million USD, along with a total 1 billion USD infrastructure investments. The same company is interested in buying up from the Greek Railway (OSE) the Thriassion land plot, paying up to 200 million USD and conducting 400 million USD of investment thereafter. The Thriassion plain is ideally planned by COSCO to be used as its main logistics base for the container cargo to be imported to Piraeus port before being re-exported via Greek railways to other EU markets and vice-versa, through the Balkan routes.

Recently, however, new information has surfaced indicating that COSCO is encountering bureaucratic obstacles in pursuing its 230 mn. euro investment in the port, relating to the construction of a dedicated container pier that would secure its presence in the port. According to well-placed sources, it will take a few months to overcome these issues, whilst the possibility of early elections in the country may further derail the whole deal.

China State Grid is also interested in investing by buying 66% shares from the Greek state of the national electricity transmission network company; this can be estimated to cost around 1 billion USD.

Private Citizens and Companies: from China to Europe, via Greece

In the meantime, there is repperorted interest from 10,000 Chinese citizens to acquire real estate in Greece, worth 350,000 USD unit, so as to get them a five-year residence permit that will allow them to travel around the Schengen Zone. Along with business networking, this could be a coup for Chinese intelligence services in Europe.

Similar regulations have been recently implemented by Portugal and Cyprus in order to revive the struggling construction and real estate markets in those countries. It has to be noted that directly and indirectly the Greek state would get more than 20% of each housing unit transaction, thus the total amount on the table could exceed 700 million USD into the state coffers.


As can be readily understood, the Greek economy – struggling to survive amidst the greatest economic recession in its recent history – stands to gain a considerable amount of export opportunities and inward foreign direct investments through the interest being shown by Chinese companies. Greek GDP for 2014 is estimated at 235 billion USD, thus the total amount of capital involved relating to the aforementioned would be a serious boost for many local industrial and service sectors.

On the other hand, the likelihood of early elections and possible subsequent political instability, as well as, the limitation of the market due to a rigid tax regime, high regulation clauses in most economic sectors and limited room for growth in terms of infrastructure projects, can be seen as negative points.

Thus it can be expected that the Chinese interest will rest for a while, until early to mid-2015, when Athens will be in a better position to either negotiate or offer favorable economic prospects.

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