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The Chinese Presence in Greece: Facts and Complexities

0 Comments 🕔14.Dec 2015

This article is part of our feature Re-imagining the Silk Road.

A woman near the Thessaloniki Port. Photo Credit: CrippleHorse.


by Pantelis Sklias


China’s economic rise is the result of economic and political reforms that began to be implemented around 25 years ago. The size of its economy outstrips that of the largest European countries, and it is possible that it will become the world’s largest export power in the next decade.

The purpose of this paper is to highlight the development of the Sino-Greek relations. Overall, it can be observed that bilateral relationships have been regularly increasing in both commercial and political terms. The Chinese presence in Greece mainly focuses on strategic investments through the privatization processes. The global and the Greek economic crisis have had an impact on the volume of this bilateral trade. Additionally, references are made to the political turbulence that occurred in the first months of 2015, which is very much related to the priorities of the new leftist government of the Coalition of the Radical Left (SYRIZA) and the European Union (EU) legislative framework which appears to be a serious denominator of the prospects of the Chinese presence in the country.


Sino-Greek Commercial Relations

The commercial relationships that have developed between Greece and China are significant and are increasing in number all the time, primarily in the fields of agriculture, minerals, metals, and other raw materials. Compared to other countries, though, Greece lags behind in its exports to China: it was in 27th place in 2009, although up from 31st place in 2008. On the contrary, China absorbed 43% of its European exports from Germany, 10% from France, 9% from Italy, and 7% from the UK, while those from Greece accounted for only 0.6% of the total in the 2006-2009 period, while 6.3% of Greece’s imports at that time came from China.

According to data from the Greek Embassy in Beijing, 82.6% of products exported to China in 2010 were mineral ores, minerals, fuels, and oils—with the quantity of olive oil consistently on the rise—while 57% of the total value of those exports was related to fossil fuels. Greece’s imports from China were largely comprised of engines, minerals, clothing/footwear, and categories of products such as sea and river navigation tools, nuclear reactors, fossil fuels, plastics, etc. The most valuable products imported were ships, computers, and other industrial products.

As is clear from Diagram 1, Greece and China’s trade balance remained negative for Greece during the entire preceding decade (2000-2010) despite a continuing rise in export and import figures. That said, although the value of imports rose dramatically from 2006 to 2008, there has been no corresponding increase in the value of Greece’s exports to China. This major difference makes it all the clearer that a) the Greek economy has limited competitiveness and b) the domestic market cannot meet its own needs, with the result that imports are constantly on the rise. Consequently, China’s role in bilateral trade is clearly more powerful Greece’s, and it demonstrates its successful and dynamic penetration into the Greek market while at the same time retaining a powerful means of exercising pressure and increasing its influence.


Diagram 1
Value of China – Greece’s Balance of Trade 2000-2010

Sklias_diagram_1Source: Greece’s Embassy in Beijing, 2011


Trade in services is yet another indicator that confirms the picture painted above: just as with the balance of trade, the balance of services was constantly in the negative in the period 2000-2008, as shown in Table 1. From 2003 on, the value of payments was twice that of takings (accounts receivable), which demonstrates the dynamic and constantly increasing penetration of Chinese services into Greece and their tendency to dominate. In 2010, they accounted for 42.97% of Greek GDP, and the balance was also negative, with the value of payments considerably exceeding the value of takings (accounts receivable), while the share of China’s payments to Greece in the same period ranged from 0% to 0.02% (Embassy of Greece in Beijing 2011). Consequently, China’s trade dominance is equally important as its dominance in trade in services, since it ensures both China’s continuing and increasing influence and Greece’s increasing dependence on this sector in order to provide it with a powerful and stable basis to achieve expansion into the wider market.

Table 1.
Value of Greece – China’s Balance of Services 2000-2008

Sklias table 1Source:  Greece’s Embassy in Beijing, 2011


On the other hand, in the service sector during 2009, the EU had a positive balance with China and other important partners such as the USA, Hong Kong, Japan and of course the Association of Southeast Asian Nations (ASEAN). In short, exports of goods from Greece to China primarily include agricultural produce, raw materials and industrial products in large part, while services provided relate to transport and tourism. Even though Greece’s exports remain low, they are on the rise, and the negative balance of trade is due to the Greek economy’s lack of competitiveness, cost of labor, and the population gap which divides the two countries. Lastly, problems also arise a) because of the lack of coordinated, mass exports resulting in their loss in a market of that size and b) because of insufficient measures to protect trademarks, patents, etc. In any event, the Chinese economy benefits more and achieves its targets by expanding its market and field of influence.

The aftermath of both the global and the Greek fiscal crisis has led to a decline in bilateral commercial relationships, especially the Greek presence in China. According to the Greek Statistical Authority, Greek exports to China in 2014 have been reduced by 34% (€278 million), while Greek imports from China have been increased by 14% (€2.492 million). Greek imports in 2014 account for the 5.22% of total imports while Greek exports to China account for the 1.025% of the Chinese total imports (Greek MFA 2015).


Table 2.
Sino Greek Data on Bilateral Trade (in Euros)

Sklias table 2Source: Greek MFA (2015)


Chinese investments in Greece

A series of political and economic reasons very much related to the preservation of high growth rates led China to seek out new markets. The fact that it is supported by state aid indicates both the state-focused approach of the party-political regime and the overriding objective, which is none other than to increase its economic presence and trade volume development. In this framework, Greece appears to be a reliable partner willing to enter into commercial and investment agreements (Wall Street Journal 2010 and Reuters 2010).

Consequently, in order for China to achieve its objectives, it is focusing on two priorities in relation to Greece: concluding agreements and Memorandums of Understanding (MoUs), and controlling transport and transportation networks.


i) Agreements and Memorandums of Understanding (MoU)

October 2010 saw the signing of 11 agreements between Greece and China, which have been estimated at more than $10 billion (Eleftherotypia newspaper 2010a). These agreements specifically related to financing for shipbuilding, collaboration between Greek and Chinese shipping companies, loans, and financial support to Greek ship-owners (of $5 billion) in order to continue building ships at Chinese shipyards. These agreements were as follows:

  • A MoU for bilateral cooperation in the field of investments between the Chinese Ministry of Trade and the Hellenic Ministry of Rural Development & Competitiveness
  • An administrative program for cultural exchanges between the governments of Greece and China for the 2011-2013 period
  • An agreement to construct the Piraeus Plaza between the Chinese group BCEGI and the Greek company Helios Plaza S.A.
  • A loan agreement for construction of infrastructure worth $74,165,000 by the Development Bank of China to Cardiff Marine Inc.
  • A framework agreement between Cardiff Marine, Inc. and the China Classification Society
  • A contract for a foreign office and WIFI connection between Huawei Techologies Co. Ltd. and On Target Earnings (OTE)
  • An agreement to purchase marble on behalf of the Chinese company ARTEX Corporation Fujian
  • A sponsorship–financing agreement between the Piraeus Container Terminal and the Special Olympics World Summer Games in Athens in 2011
  • The donation of teleconferencing materials by the company ZTE to the Confucius Institute in Athens
  • An infrastructure loan agreement worth $111 million between the Export-Import of China and DNB NOR Bank ASA guaranteed by Angelicoussis Shipping Inc.
  • An infrastructure loan agreement worth $82.6 million between the Export-Import of China and DNB NOR Bank ASA guaranteed by Diana Shipping Inc.

In addition, in order to show its practical support for Greece, China has expressed its willingness to purchase treasury bonds when Greece returns to the markets (Reuters 2010) and at the same time is also purchasing cheap bonds from other European countries (The Economist 2011). No practical outcome has come out of those publicly declared intentions. A similar discussion has recently been developed in the framework of the invitation to Greece to participate in the Development Bank to be established by the BRICS countries (Brazil, Russia, India, China, South Africa).

Moreover, transport arrangements were also reached, including as direct flights between Athens and Beijing and Athens and Shanghai, which indicates that there will be more intense economic activity. However, at a cultural level, China has undertaken to contribute in any way it can to the return of the Parthenon Marbles and the establishment of Confucius Centers in Greek Universities.


ii) Transport and Transportation networks

The largest strategically important investment by the Chinese in Greece was the Port of Piraeus. The aim of this investment was to promote Chinese products, which are consistently increasing in the European market, and to increase container investments with the aim of them reaching €3.7 million by 2015. However, Piraeus is not the only port that China intends to use to expand its influence; it hopes to operate in other Greek ports, including the Port of Thessaloniki (Market Research, 2011), for which Cosco submitted an offer of €132 million in 2008. In addition, in order to make investment easier, the Greek State rebated €21 million in Value Added Tax (VAT) to Cosco (Eleftherotypia 2010a).

China (via Cosco) was also extremely interested from an investment viewpoint in the Thriasio Plain site in order to ensure even greater levels of penetration by setting up logistics centers there for products in the final stages of the production process so that they could be released on the market. Cosco had the know-how required to implement this investment, since it had already made a similar investment in Dubai (Eleftherotypia, 2010b). That said, the Chinese company withdrew its offer and the tender procedure was cancelled when the interim contractor did not submit the necessary guarantee letters.

Chinese participation in the privatization process of the two main ports in Greece, especially Piraeus Port, has been questioned by the new SYRIZA government elected in January 2015. Nevertheless, under the new government communication has been established and official visits have already been paid, although controversial signs from the Greek government are still an issue for the Chinese (Tovima 2015). This complexity is further accentuated as China faces EU competition and regulatory policy which affects the privatization processes in Greece, including existing Cosco agreements and concessional terms (TheVot 2015). This may also limit Chinese prospects or put them under review under the EU institutional framework.



Based on all this, several final conclusions can be drawn. First, China’s presence in Greece has been consistently increasing, and political relationships have been upgraded with mutual visits at the highest level. While China’s focus is on strategic investments in the transport sector with emphasis on the privatization process of the main ports in Piraeus and Thessaloniki, which create sustainable corridors for Chinese products in the European continent, the Greek presence in China is mainly limited to the marine industry and shipbuilding. The Chinese presence in Greece may also be affected in the future by the political priorities of the new, leftist SYRIZA government. An additional dimension that increases the complexity of the Sino-Greek relations is the framework of the EU legislative procedures that must be respected during the privatization process, and which may affect the tendering and competition procedures in the case of the two main port locations in Greece. Finally, in my view, China cannot be considered an alternative source of funding to cover the fiscal problems of Greece, at least for the time being. Potential Greek participation in the newly declared BRICS Development Bank may be mainly considered as a way to support small- and medium-scale investments in the country rather than a “last resort lender mechanism” for the country.


Pantelis Sklias is a Professor of International Political Economy in the Department of Political Science and International Relations at the University of the Peloponnese.


This article is part of our feature Re-imagining the Silk Road.


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