China rewrites Greek tragedy
Nearly bankrupt and sullied in the eyes of foreign investors, Greece is moving to rebuild its economy by tapping the deep pockets of another ancient civilisation: China. Spurred by Govt incentives and bargain-basement prices, the Chinese are planning to pump millions of euros into Greece even as other investors run the other way.world Updated: Jun 10, 2010 01:59 IST
Nearly bankrupt and sullied in the eyes of foreign investors, Greece is moving to rebuild its economy by tapping the deep pockets of another ancient civilisation: China.
Spurred by government incentives and bargain-basement prices, the Chinese are planning to pump millions of euros into Greece even as other investors run the other way. The cornerstone of those plans is the transformation of the Mediterranean port of Piraeus into the Rotterdam of the south, creating a gateway linking Chinese factories with consumers across Europe and North Africa.
The port project is emerging as a bellwether for Greek plans to pay down debt and reinvent its broken economy by privatising inefficient government-owned utilities, trains and even casinos. This week, Chinese shipping giant Cosco took full control of the major container dock in Piraeus, just southwest of Athens. In return, the Chinese have pledged to spend $700 million to construct a new pier and upgrade existing docks.
The Greek government is also courting China for other projects: a new distribution centre, a monorail line, five-star hotels and a new maritime theme park.
“We have a saying in China, ‘Construct the eagle's nest and the eagle himself will come’,” Cosco chief executive Wei Jiafu said in Athens.
A member of China’s Communist Party, he is now so well-known in Greece that many here call him by his nickname, ‘Captain Wei’.
The Chinese have plunked down billions from Angola to Peru to ensure the delivery of natural resources to feed China's red-hot economy and to guarantee unfettered, cost-effective shipment of its exports abroad. The investments in Greece, analysts say, are part of China's plan to create a network of roads, pipelines, railroads and port facilities — a modern Silk Road — to boost East-West trade.
Forced in April to turn to the European Union and International Monetary Fund for a $140 billion bailout, Greece fits perfectly into China’s pattern of investing in challenging environments.
Other European nations remain suspicious of Chinese state investment. Alarm is also growing that China’s plans will flood Europe with cheap Asian imports.
But the Greeks see the investment as nothing short of a gift from the gods. “The Chinese want a gateway into Europe,” Theodoros Pangalos, Greece’s deputy prime minister, said.
“They are not like these Wall Street pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece.”
In exclusive partnership with The Washington Post. For additional content visit www.washingtonpost.com
First Published: Jun 10, 2010 01:52 IST