Can China’s New Silk Road save the Greek economy?
China’s massive project has enormous implications for Greece and Europe.
Eight thousand kilometers of ancient cultures link the cradles of Western and Eastern civilization. It was through these routes – first called the Silk Road in 1870 – that Genghis Kahn arrived in Europe and Alexander the Great almost reached the Chinese province of Xinjiang. The Hellenic world and Eastern Europe have carved mathematics and Indo-European languages along these tracks, while the Greek-Buddhist syncretism influenced the development of art and philosophy in China and India.
Today China is busy restoring the Silk Road to its former prestige. The One Belt One Road (OBOR) project entails more than $140 billion in investment, which aims to connect more than 20 countries through the construction of new maritime and land infrastructure corridors between China and Europe. A recent Carnegie-Tsinghua study asks whether this ancient cultural bridge might now able to positively impact the eurozone, stimulating a Greek economic recovery.
Despite the collapse of international investment, China has continued to demonstrate that it has not given up on Greece. Indeed, Greece represents for China something that has been defined by the New York Times and the Wall Street Journal as one of its most successful foreign trade initiatives.
The Greek Port of Piraeus is the first stop in Europe for numerous passengers and Greece boasts the world’s largest merchant fleet, carrying 60 percent of Chinese exports worldwide. Since 2000, thanks to Cosco, China has effectively exploited the size and centrality of Piraeus port, now controlling two-thirds of its total traffic. In 2013 Beijing agreed to invest $258 million in developing the port, increasing Greek profits by 12 percent and facilitating the wave of privatizations that the so-called Troika of the International Monetary Fund, the European Central Bank, and the European Commission were seeking.
Chinese banks have also earmarked considerable loans for Greek ship-owners, who have agreed to build their new ships in China. Other collaborations encourage naval research and development programs between the universities of the two countries.
Meanwhile, through the Fujian Shipbuilding company, Beijing aims to access European technology, especially military, financing naval armament agreements valued at more than $3 billion, representing 7 percent of Greek GDP, and providing 190,000 jobs.
China has also invested $6.7 billion in upgrading Athens airport and $1 billion in the construction and management of Crete Airport, which will become the second largest airport in Greece. Chinese travel to Greece has meanwhile surged, rising 70 percent in 2014 alone, to 100,000 visitors.
Piraeus port together with Greek airports are a great opportunity for China to expand its presence in Europe. Given the magnitude of these projects, governments are required to implement policies designed to increase cooperation and co-financing between companies, tourist actors, and international stakeholders aiming for European Investment Bank funds. This is especially important now that, notwithstanding pressure from Washington, the Asian Infrastructure Investment Bank has gained Brussels’ blessing…