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Newsletter July 2010


Greece & China—Building a New Investment Partnership

Chinese Transport Minister Li Shenglin and
Economy, Competitiveness and Shipping Minister Louka Katseli

In June, Zhang Dejiang, China's vice premier, lead a delegation of 30 of the country's leading businessmen to Athens to sign hundreds of millions of Euros worth of investments in Greek shipping, logistics and infrastructure projects.

China considers Greece an ideal investment location and one that will facilitate its penetration into the vast European market. As a member of the EU and the Eurozone, Greece offers China a gateway to Northern, Eastern and Western Europe as well as the highly promising market of Southeast Europe and the Black Sea. Significant investment opportunities from China to Greece exist in sectors such as final product assembling, transport, logistics, and supply chain. A perfect synergy for Chinese companies is Greek shipping, which can actively support Chinese business activity in Greece.

China will offer Greece multiple benefits and Greece will provide China with a wealth of opportunities.

Leading Chinese shipping giant China Ocean Shipping (Group) Company (COSCO)  is in charge of container operation project at the Greek port of Piraeus.

Under the agreement, Pier II and Pier III of Piraeus Container Terminals will be under COSCO management for 35 years. COSCO is planning to invest 550 million Euros to upgrade the facilities of the two piers. By 2015, the handling capacity of the port will be raised from today's 1.6 million twenty-foot equivalent units (TEUs) to 3.7 million TEUs.

"Piraeus is linked with three continents -- Asia, Europe and Africa, and China and Greece have traditional friendly ties, so Greece was seen as a good environment for COSCO to set up this plan," said COSCO President and CEO captain Wei Jiafu.

Captain Wei strongly believes in closer cooperation with his Greek partners. He said he seeks stronger collaboration with the Piraeus Port Authority, which runs Pier I at the port and is the only local competitor for COSCO.

Upon his return to China, Mr. Wei was planning to ask the Ministry of Commerce for "support to create a new good distribution center for Chinese goods in Greece and more investments in the country, based on a win-win principle," he said.

Greece and China signed 14 bilateral agreements during a visit to Greece by China's Vice-Premier Zhang Dejiang, a prominent member of the Communist Party of China’s Politburo.  Mr. Zhang was in Athens at the invitation of Greek Vice-Premier Theodoros Pangalos, his Greek counterpart.

"The Chinese want a gateway into Europe," said Mr. Pangalos. "The Chinese deal in real things, in merchandise. And they will help the real economy in Greece."

Greek Prime Minister George Papandreou underlined that bilateral relations between Greece and China were excellent and would be further deepened as a result of the agreements.

Mr. Zhang said the agreements reflected China's desire for stronger ties with Greece and appeared confident that it will overcome its current financial difficulties, adding that China will encourage substantial investment in Greece. He also conveyed greetings from Chinese Premier Wen Jiabao.

During the meeting with Mr. Pangalos, Mr. Zhang expressed China's support for the Greek government and its efforts to overcome the economic crisis, saying that there was a "joint desire by Athens and Beijing to strengthen our beneficial cooperation in order to deal with the economic crisis."

The two sides signed 14 agreements dealing with the shipping sector, transport, tourism and telecoms, and for the export of Greek olive oil to China.

"We exchanged views in depth on how to expand cooperation in every sector and arrived at a broad agreement. Greece encourages Chinese companies to come to Greece and find opportunities for investment," Mr. Zhang said.

Talks between the two sides focused on both existing and potential cooperation, with special emphasis on the opportunities created through Greece’s planned privatization programme. Interest was expressed in installing a container terminal at Thriasio, in the Greek Railways Organisation (OSE), ports and airports, as well as possible cooperation in education and culture.

The first agreement signed by Economy, Competitiveness and Shipping Minister Louka Katseli and Chinese Transport Minister Li Shenglin provides a favourable charter regime for Greek shipping, while another four agreements to build Greek cargo ships at China Ocean Shipping (COSCO) shipyards were signed between Greek ship owners and COSCO.

Greek shipowners also signed an agreement with COSCO Bulk Carrier on forming a joint-venture and two charter agreements for Greek ships.

In the telecoms sector, Hellenic Telecommunications Organisation (OTE) CEO Panagiotis Vourloumis signed an agreement with Huawei Technologies, while China's BCEGI and Helios Plaza signed an agreement for the construction of the hotel and shopping complex Pireaus Plaza.

Four agreements were also signed for the export of Greek olive oil.