China and Greece established diplomatic relations on 5 June 1972. Greek Prime Minister Konstantinos Karamanlis visited Beijing in 1979 followed by an exchange of visits in 1986 between Prime Minister Andreas Papandreou and Premier Zhao Ziyang. However, in the first three decades of diplomatic relations official contacts remained rare, involving only infrequent visits and dialogue in the bilateral framework of the China–Greece Joint Inter-ministerial Committee and in the context of the Asia-Europe Meeting (ASEM) Process.
The official visit to Greece of Chinese President Jiang Zemin in 2000 and that of Greek Prime Minister Kostas Simitis to China in 2003 were important milestones as they inaugurated a new period of comprehensive cooperation. Official Sino–Greek contacts intensified after 2003, driven by the Olympic Games of Athens (2004) and Beijing (2008), as Greece provided know-how to the Beijing Olympic Games Organising Committee. In 2006, the two countries upgraded their bilateral relations by establishing a Comprehensive Strategic Partnership, including a political dialogue and enhanced cooperation in trade, tourism, sport, education, and people-to-people diplomacy. The concession of the Piraeus Port Container Terminals II and III (hereinafter ‘the Concession’) to China Ocean Shipping Company Limited (COSCO) in 2009 and the privatisation of Piraeus Port Authority (PPA) in 2016 solidified bilateral relations in the economic realm. In addition, in 2011 Greek merchant vessels evacuated thousands of Chinese citizens and workers from Libya, an event that showcased Greece’s strategic value for Chinese operations in the Mediterranean.
Since the Belt and Road Initiative (BRI) was first announced in 2013, the port of Piraeus has been designated as one of the Initiative’s key projects in Europe. COSCO’s investment in Greece, a member of both the European Union and the Eurozone, envisaged Piraeus as a gateway and transit centre for Chinese imports to Europe. Following that, high-level official visits between the two sides have become frequent, with heads of state and government meeting on an annual basis. During these official visits, the two sides have signed a large number of agreements and memorandums of understanding, covering economic, cultural, scientific and educational cooperation, as well as trade and investment deals.Greece officially joined the BRI on 27 August 2018, when foreign ministers Nikos Kotzias and Wang Yi signed a memorandum of understanding to strengthen bilateral cooperation within the BRI framework. On 13 April 2019, Greece became a member of the Cooperation between China and Central and Eastern European Countries (also known as 17+1), and on 20 August 2019 it joined the Asian Infrastructure Investment Bank (AIIB) with a paid-in capital of 10 million USD and 0.1552% of total votes. In addition, since 2015 successive Greek governments have expressed interest in joining the New Development Bank led by Brazil, Russia, India, China, and South Africa (the so-called BRICS), but no formal application has been submitted to date.
Economic relations between China and Greece remained unremarkable until COSCO’s gradual involvement in the port of Piraeus in 2009. Since then, Chinese investment in Greece’s largest port has been the cornerstone of the economic partnership and has generated interest from Chinese SOEs and private companies in other sectors of the Greek economy.
Trade: Bilateral trade is modest. In 2019, it totalled 5.2 billion USD, with Greek exports to China reaching 999.09 million USD and Chinese exports to Greece 4.1 billion USD. China and Greece are each other’s 13th and 46th largest trading partner respectively. The main categories of Greek exports to China are: a) fuels, oils, distillation products (468.64 million USD); b) minerals and cement (239.96 million USD); and c) machinery and parts (84.95 million USD).
Investment: According to the China Global Investment Tracker of the American Enterprise Institute, Chinese investments in Greece reached 10.5 billion USD in 2020. Two specific investments have attracted the most attention from the public and from the media: the Piraeus Port and the Greek Independent Power Transmission Operator. Despite often being presented as a key BRI project in Europe, COSCO’s involvement in Piraeus goes back to 2009, four years prior to the first mention of the BRI, when the Chinese company won an international tender for the concession of Container Terminals II and III. Greek shipowners, long-standing clients of Chinese shipyards and banks, spearheaded the investment by intensively lobbying the Greek government. The 2010 economic crisis paved the way for the port’s privatisation. Under the third bailout agreement with the European Commission, the International Monetary Fund, and the European Central Bank, Greece was obliged to implement a programme of rapid privatisations, which included the Piraeus Port Authority. In 2016, following an international tender, COSCO acquired a majority stake in PPA for 402.1 million USD. In the same year, another Chinese SOE, the State Grid Corporation of China, acquired a minority stake (24% of shares) in the Greek Independent Power Transmission Operator (IPTO) for 352.14 million USD. Although the Greek state retained a majority stake of 51%, State Grid has positioned itself strategically for IPTO’s future privatisation. Other notable private investments include acquisition of 16.4% of Folli Follie, a luxury brand, by Fosun and of 70% of Korres SA Natural products by Chinese Profex Inc and Morgan Stanley. In addition, up to February 2020, 5,869 Chinese citizens had obtained residence permits under the Greek ‘Golden Visa’ programme, which amounts to approximately 1.5 billion USD in investment.
COSCO’s expanding presence in Piraeus since 2009 has resulted in disputes over labour conditions, environmental protection, public health, and the use of land. Dockworkers in Container Piers II and III have organised strikes and walkouts protesting about poor labour conditions, and in 2014 managed to set up a union despite strong opposition from the management. The Port is surrounded by the densely populated urban districts of the City of Piraeus, and so COSCO ‘inherited’ local grievances over air pollution and traffic—both of which have deteriorated since 2009. In addition, local communities have opposed COSCO’s various plans for the use of PPA land, such as the vacated fertiliser plant at Lipasmata and the fuel silos in Perama, and the expansion of the Port’s cruise terminal that will block access to the seafront and increase air pollution. These issues have resulted in local mobilisation, protest, and long litigation processes. Nevertheless, COSCO’s economic activities in the port have remained broadly uninterrupted and consistently profitable.
In 2020, opposition against COSCO’s plans for expansion of the port grew considerably with the addition of influential local businessmen and the city’s municipal government that barred tracks carrying building materials from passing through the city. In addition, local business associations have accused COSCO of using its control of the Port to monopolise a broad range of traditional economic activities in Piraeus, including ship building and repair and logistics.
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Cover Photo: Piraeus Port, by @jb912 on Flickr.com (CC)