Xi Jinping visits Greece, brings more BRI
Chinese President Xi Jinping, accompanied by his wife, paid a state visit to Greece on November 11 and 12. It was the first state visit by a Chinese president in 11 years. Xi held talks with President Prokopis Pavlopoulos and Prime Minister Kyriakos Mitsotakis. The latter had just returned from China where he visited a trade fair. In Greece, he and Xi paid a visit to Piraeus. Main topics of the talks: BRI, related Chinese investments, banking, trade, and tourism.
The largest BRI project in Greece is Port of Piraeus (OLP), and it is getting bigger still. Countries signed a MOU supporting an additional investment of 600 million euros in the port by COSCO [China, Greece agree to push ahead with COSCO's Piraeus Port investment]. The Chinese state-owned shipping and logistics behemoth currently owns 51% of the port, which is set to go up to 67% by 2022. Recently, the expansion has seen some setbacks.
Just last month, Greece rejected COSCO’s plans for a new container terminal after local protest and pressure from the United States. Whether this new MOU means the terminal goes ahead anyway is not totally clear, but it sure seems so, as the MOU says that: “Countries are stating their mutual will to overcome any obstacles in the implementation of COSCO’s investment in Piraeus”. Plans for a new cruise terminal, four hotels, and car terminal were earlier approved, and construction is set to begin soon.
During Xi’s visit, State Grid Cooperation of China (SGCC) said it wants to bid for the proposed construction of an 132-kilometer undersea power cable between the Greek mainland and Cyprus. The cable must eliminate power outages on the island. It will be operated by Independent Power Transmission Operator (ADMIE), Greece’s power grid operator. SGCC owns 24% of ADMIE.
Both the expansion of the port of Piraeus and the power cable are partially financed by loans from the European Investment Bank (EIB). During Xi’s visit, EIB and Greece signed an agreement for a 140-million-euro loan for the development of the Port of Piraeus [EUR 140 million EIB backing for Port of Piraeus transformation]. The signing ceremony was attended by Xi, Mitsotakis and by COSCO chairman Xu Lirong. The loan is guaranteed by the Export–Import Bank of China (CEXIM). The EIB loan for the power cable was agreed to in May and is worth 178 million euros, half of the proposed budget.
In banking, Xi attended the opening of the first office in Greece of the Bank of China (BOC). China’s Industrial and Commercial Bank (ICBC) received permission to set up an office as well. In trade, China agreed to buy more agricultural products, including kiwi’s and saffron. Countries had been negotiating the saffron deal for over two years. In China, saffron is mainly used as an ingredient for Traditional Chinese Medicine (TCM).
The lone saffron-producing area is located around the northern town of Kozani. This town is also a major transport hub and the most important source of electricity in Greece. The area stretching from Kozani to Florina further northeast is home to several large coal mines and power plants. The area has been of great interest to China since at least 2016, when Greece's Power Public Corporation (PPC) and China Machinery Engineering Corporation (CMEC) signed a deal to build a new coal-fired power plant.
Countries agreed to promote Chinese tourism to Greece and expand the number of direct flights. Last year, about 170.000 Chinese tourists visited Greece. The target: 500.000 by 2021. The cruise terminal at Piraeus is specifically aimed at Chinese wanting to sail the Mediterranean sea, with an expected 100.000 visitors per year upon completion.
Finally, Chinese immigration to Greece under the Golden Visa property-investment scheme has been growing fast, with ever more Chinese settling permanently, forming “little Chinatowns” in the suburbs of Greece’s largest cities. China, normally very much against private-capital outflow, appears to endorse the scheme, just like it did with similar schemes in Malta, Cyprus, and Portugal.
China just got more important for Greece, again.
Tycho de Feijter
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