Belt and Road Initiative in Greece and the success case of Piraeus Port


In recent years, and especially after 2013, China has given a new positive dimension to international cooperation and connectivity among countries around the world. In 2013, Chinese President Xi Jinping proposed Belt and Road Initiative (BRI) which is unique in global economic history and aims to enhance policy, infrastructure, trade, financial and people-to-people connectivity, and to create new opportunities for the common development of all countries. BRI among other priorities seeks to fill the large infrastructure gap that constraining trade, openness and future prosperity. Infrastructure connectivity is the foundation of development through co-operation. For the achievement of this scope, the initiative promotes land, maritime, air and cyberspace connectivity, concentrate China’s efforts on key passageways, cities and projects and connect networks of highways, railways and sea ports.

All these years China has made critical investments in different parts of the world. According to “OECD Business Finance Report 2018” BRI investment projects are estimated to add over USD 1 trillion of outward funding for foreign infrastructure over the 10-year period from 2017 which undoubtedly have positive impacts on countries involved. Globally, by sector, the largest investment needs lie in transport and energy infrastructure.

One of the countries that has benefited a lot from Chinese investments under the “umbrella” of the BRI is Greece, which was the first European country that in August of 2018 formally joined China’s Belt and Road Initiative and is the first European “stop” of the sea route part of BRI (21st Century Maritime Silk Road).

Over recent years, especially after BRI announcement the bilateral relations between Greece and China are on a continuous upward trajectory. China’s imports from Greece have increased reaching nearly $1 billion in 2021, up nearly 26 percent year on year and 244 percent more than five years ago.  Olive oil, dairy product, wine, safflower, and other high-quality products are increasingly gaining popularity among Chinese consumers.

In terms of investment, China has become Greece’s sixth-largest source of foreign investment and this cooperation can be seen in transportation, energy, communications, finance, and other fields. Τwo very important infrastructure investments of BRI in Greece are the acquisition of 67% of the port of Piraeus by COSCO Pacific Limited in 2016 with total expenditure (shares and upgrade investments) of about 1,5 billion euros and the acquisition of 24% of IPTO (Independent Power Transmission Operator) by State Grid Europe Limited in 2017 that invested 320 million euros. In this critical investment in energy sector, the Chinese company undoubtedly, except funds, contributes with the most advanced technology in the energy supply industry. In addition, the company has clearly stated its desire to undertake the electrical interconnection of mainland Greece with its islands, ensuring significantly lower electricity costs for consumers in those areas.

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All these years, with the BRI gaining steam around the world,  Greeks can be proud that host one of the most successful BRI projects which is an achievement and proof of win-win cooperation between two countries. Without any doubt, one of the most critical Chinese Overseas investments is the acquisition of majority stakes (67%) of Piraeus Port in Greece. The port of Piraeus is the largest port in Greece, with a coastline of more than twenty-four kilometers and a total area of more than five million square meters. The port of Piraeus is located at the intersection of the sea routes connecting the Mediterranean with Northern Europe and thanks to its geographical location allows large ships to access the Far East’s trade routes without significant deviation. Port’s significant location makes it a vital transport, commercial and logistic hub for tourism and communication connecting the Greek islands with the mainland and is a transit trade hub for the Balkan and Black Sea countries. The Chinese investment in the biggest port of Greece has become not only a flagship project in China-Greece cooperation but also a success case in global BRI collaboration. In November 2019, when Chinese President Xi Jinping visited the ancient port of Piraeus said: “We want to strengthen Piraeus’ transshipment role and further boost the throughput capacity of China’s fast sea-land link with Europe.”

The initial concession agreement which signed on 25th November 2008 between Piraeus Port Authority S.A. and the Chinese company aimed to develop and operate Piers 2 and 3 of the port of Piraeus in Greece. In 2009, the firm started managing the port’s container terminals, placing the then struggling harbor on an upward trajectory and breathing new life into the local economy. At this point it is worth noting that at that time, the port of Piraeus was not what it is today, so no other international firms were attracted to invest in the port. It was a port of great geostrategic importance but degraded without modern infrastructure.

Few years later, in 2016, and almost three years after President Xi proposed BRI, Chinese shipping firm, purchased a majority stake (67%) in Piraeus Port Authority S.A. (PPA S.A.). The evolution of the port since 2008 and especially since 2016 proves that China is looking to transform Greece’s Piraeus port into the biggest harbor in Europe — making it the most crucial transit hub for trade between Asia and Europe.

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