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Greece’s ancient civilisation was once a lure for China’s leaders. Now it could prove their nemesis

China once hoped that the ancient Greek port of Piraeus, a few miles outside Athens, would offer the definitive answer to European countries that were sceptical about its ambitions in the continent.

After all, with millions of dollars in Chinese investments being pumped into the port, it is now on course to surpass Valencia in Spain and become the busiest container terminal in the Mediterranean by the end of the year.

If that goal is achieved, 10 years since the state-controlled shipping group Cosco started running the port, it will provide a stellar example of Chinese business capabilities.

Nor will the symbolic value be lost on the leadership in Beijing, who are eager to pursue “new achievements” through cooperation with their Greek counterparts.

As Premier Li Keqiang told his Greek counterpart Alexis Tsipras last year “as two ancient civilisations, China and Greece should strengthen cross-cultural dialogues”.

But while Greece’s heritage was once an attraction for the Chinese leadership, it may now prove to be a stumbling block for their ambitions.

On Wednesday, the Greek Central Archaeological Council unanimously turned down Cosco’s expansion plan in Piraeus, effectively rendering half the town as an archaeological site.

Cosco is now barred from constructing a mall next to a new cruise ship terminal, and is also facing restrictions on a five-star hotel set to be built in the Porto Leone area, in the southern section of the port where the cruise terminal is located.

The decision plunged Cosco’s €1.5 billion (US$1.7 billion) deal with the Greek government into what the company’s insiders call an unprecedented limbo.

Cosco has also pledged to build a logistics centre in nearby Keratsini, expand the port to facilitate four new cruise berths, introduce a new berth allocation system, build a new cruise passenger station in a converted warehouse and upgrade shipbuilding infrastructure.

But in February Tsipras’s government initially blocked parts of Cosco’s “master plan”, on the grounds of environmental concerns and “aesthetic” reasons, effectively rejecting around €354 million in planned investments.

Even projects that had already been approved had to be referred to the Ministry of Culture, the Central Archaeological Council and the Central Council of Modern Monuments for reauthorisation.

Battle for hearts and minds
Speaking to the South China Morning Post, Greece’s Deputy Prime Minister Yanis Dragasakis rejected Greek media reports that the Tsipras administration was employing delaying tactics because it was falling in the polls ahead of elections this year.

“I don’t know there’s a delay here. This is not related to the election. It is related to the complexity of the decision to be made,” Dragasakis said.

“This area is full of antiquities, [a] fact that requires all procedures to be followed properly. In any event, the investment for the port of Piraeus is a very, very important investment.”

The Greek government, he added, “will do our utmost to facilitate [Cosco’s] presence in Greece.”

“It is a successful investment,” the deputy prime minister said, referring to Cosco’s performance in Piraeus so far.

Some in the leftist ruling party Syriza are sceptical about the expansion plans proposed by Cosco and believe that foreign investments should be subject to the heaviest scrutiny.

When asked for comment, a spokesman for the Piraeus Port Authority would only say that the new plan would be crucial to the port’s long-term prospects.

Cosco’s management in Piraeus refused to comment on recent developments despite repeated requests.

Insiders at the company, however, say they are now playing a greater role in Greece than initially expected.

The Chinese brand is seen as a representative of modernity, a provider of jobs in an economically struggling country, a redeveloper of cities – and a constant target for sceptics in the Greek parliament.

Cosco is responsible for the long-term sustainability of the port, given its outsize role in the Piraeus Port Authority, which it took over from the Greek government in 2016 following Tsipras’s privatisation deal.

The fact that nearly all the projects in Cosco’s master plan have met with opposition from one stakeholder or another highlights doubts about whether the Chinese firms taking part in the “Belt and Road Initiative” – an ambitious transcontinental infrastructure project promoted by the central government – have been prepared to deal with local political considerations in the dozens of countries involved in the project.

“It is nothing new that Chinese companies have consistently failed to address the issues of cultural awareness and local customs,” Yu Jie, China research fellow at London-based think tank Chatham House, said.

“Chinese state owned-enterprises, which have made up most of BRI investments, remain clumsy when it come to addressing non-finance related issues, which are key to their social responsibilities and business sustainability.

“The challenges for Chinese enterprises to succeed in managing BRI projects is not showering the dollars and yuans, but winning hearts and minds,” Yu said.

“The lesson learnt is that Chinese companies which operate abroad must give up their self-centred ways of corporate governance.”

Dragon’s teeth
Cosco’s business involvement in Greece predates the Belt and Road Initiative – it began operating two of the three container quays in 2008.

Before Syriza came to power in 2015, the party had been calling for the “total ejection” of Cosco from Piraeus.

But the company’s survival came down to the personal intervention of one man, Yanis Varoufakis, the firebrand eurosceptic economist who served as Greece’s finance minister in the first six months of Tsipras’s government.

According to his book, Adults in the Room, Varoufakis noted: “From a strategic perspective, it struck me as daft to antagonise Beijing at a time when the battle lines against Berlin, Frankfurt and Brussels were being drawn.

“Our ports and railways were nineteenth-century museum pieces demanding massive investment that the Greek economy could not (and French and German companies would not) provide,” he said, before adding: “China was the obvious solution.”

His book also offers a rare glimpse into China’s diplomatic manoeuvring in Greece. In a dinner with Varoufakis, then Chinese ambassador Zou Xiaoli told him: “From Beijing’s perspective, Cosco is the dragon’s jaw. First, we must ensure that its teeth bite hard so that the dragon gets in. Once it is in, have no concerns or doubt: the rest of the dragon will follow.”

When Varoufakis suggested taking him to Piraeus in a few days as a gesture of Greek-Chinese solidarity, Zou responded with “the smile of a child promised an enormous present”, Varoufakis recalled.

In Varoufakis’s own words, when the visit materialised, he looked down at the harbour and the island of Salamis, “between the straits where the famous naval battle between the Persians and Athenians took place in 480BC. Now a third ancient people were making their mark in history here”.

A current finance ministry official, speaking on condition of anonymity, said it was likely the Chinese would still leave their mark in Piraeus, despite their legal setbacks in recent months.
“The reason is simple – the Chinese management, when they come into office every morning, would be thinking the same as Varoufakis during that visit,” he said. “The historic value is too big for Beijing to let go.”
Source: South China Morning Post

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