Piraeus port in Greece becomes an important gateway for China-Europe trade and economy

International Business News  –  In 2022, China and Greece will celebrate their 50th anniversary hand in hand. One country is the cradle of Eastern civilization and the other is the birthplace of Western civilization. The intersection of the two is more like a feast of the intersection of Eastern and Western civilizations. In addition to the dialogue between civilizations, the economic and trade cooperation between the two countries has also maintained close ties for a long time. In the first half of 2022, the bilateral trade volume between China and Greece reached 46 billion yuan, a year-on-year increase of 36.5%. As the first European developed country to sign a memorandum of understanding on the “Belt and Road” cooperation with China, Greece took the lead in establishing a “Belt and Road” cooperation relationship with China as early as 2018.

Ten years before the two countries jointly built the “Belt and Road”, China COSCO Shipping Group (hereinafter referred to as “COSCO Shipping”) had already traveled to Greece to take root. Since taking over the two container terminals of Piraeus Port (hereinafter referred to as “Piraeus Port”) in 2008, and taking over the Piraeus Port in 2016 through majority holdings,COSCO Shipping quickly turned the operating conditions of Piraeus Port into a profit, and in one fell swoop The world rankings rose rapidly. According to the “Xinhua-Baltic Shipping Center Development Report (2022)” jointly launched by China Economic Information Service and the Baltic Exchange, Piraeus Port ranks ninth in terms of comprehensive port conditions, shipping services and comprehensive environment.

Today, Piraeus Port has become the flagship project of China-Greece joint construction of the “Belt and Road”, and has also become one of the important gateways for China-EU economic and trade exchanges. In recent years, Piraeus Port has also become the starting point of another important trade channel between China and Europe. This passage, known as the “China-Europe Land-Sea Express Line”, starts from Piraeus, Greece in the south, passes through Macedonia and Serbia in the middle, and goes all the way north to Budapest, Hungary. With the successive opening of special trains, the China-Europe trade channel has been accelerated again.

According to the interviewed experts, Piraeus Port has become an important trade node in Europe for the Belt and Road Initiative. “Piraeus Port is the largest port in Greece, one of the five largest container ports in Europe, and one of the largest container ports in the eastern Mediterranean. From a geographical point of view, it can be said that China is the largest container port in China and Europe in terms of trade. A fulcrum in southern Europe, and also the gateway for Chinese goods to enter the European inland. From the perspective of port construction, the port’s throughput capacity, infrastructure conditions, and operation management are important for bilateral trade and investment between China, Greece and Europe. All are favorable conditions.” Wei Hongxu, a researcher at the Macroeconomic Research Center of Anbang Think Tank, told the 21st Century Business Herald reporter.

“Renovation” of Piraeus

As a country facing the sea on three sides, the shipping industry is an important pillar industry in Greece, contributing about 7% to the country’s GDP, and the role of ports is thus prominent. Among them, Piraeus Port, which is about ten kilometers away from Athens, is regarded as the “South Gate” of Europe. It is not only located in an important position in the eastern Mediterranean, but also has suitable water depth and excellent overall shipping conditions.

It is precisely because of the outstanding resource advantages of Piraeus that COSCO Shipping “anchored” this port as early as 2008. In 2008, COSCO Shipping signed a 35-year franchise agreement with Greece and took over the port’s two container terminals in October 2010 accordingly. After several twists and turns, it finally completed the acquisition of 67% of the equity of the Piraeus Port Authority in 2016, and officially controlled the operation of Piraeus Port.

In October 2021, with the delivery ceremony of the second phase of 16% of the equity, the delivery of 67% of the equity was successfully completed.

Since taking over, Piraeus Port has become a world-leading comprehensive service trade port. 21 The reporter learned from COSCO Shipping Piraeus Port Co., Ltd. that the container terminal of Piraeus Port currently has 11 berths, with a throughput capacity of more than 7.2 million TEU (standard containers) per year, which can accommodate the world’s largest container ship. In addition, the car boat terminal in the Port of Piraeus has 5 berths, with a total loading and unloading capacity of 600,000 vehicles per year; the cruise terminal has 11 berths and 3 waiting halls, which can accommodate the latest generation of large cruise ships; the ferry terminal has 41 berths and 3 waiting halls. The berths are connected to various islands in the Aegean Sea, and can receive 20 million passengers every year; in terms of logistics warehouses, it has a 7,600-square-meter bonded warehouse and a logistics park covering an area of ​​86,000 square meters, which is connected to all modes of transportation such as sea, road, rail, and air.

However, Rome was not built in a day, and the same is true of Piraeus. Today’s prosperity is hardly reminiscent of the loneliness of the port. Previously, affected by the global financial crisis in 2008, the operation of Piraeus was difficult, and the annual loss once exceeded 10 million euros. The takeover of COSCO Shipping prompted a turn of events. Relevant statistics show that the container throughput of Piraeus Port in 2010 was only 880,000 TEU, and the growth rate is as high as 718% based on today’s 7.2 million TEU.

In 2020, the global tourism and shipping industries were hit hard by the outbreak of the new epidemic, which also affected the port. In 2021, with the impact of the epidemic diminishing, the Port of Belgium achieved an annual revenue of 154 million euros, up 16% year-on-year, and a profit of 49.21 million euros, up 33% year-on-year, which was even better than the best result before the epidemic. The performance level was even better than the best result before the epidemic outbreak.

It is worth mentioning that the good performance of the Belgian port is also related to the firmness of the Greek shipping industry. Earlier this year, the local media cited data from the annual report released by the Federation of Greek Shipowners that Greek shipowners currently control 5,514 ships, accounting for 21% of the global fleet in deadweight tonnage and 59% of the EU, and Greece remains the global leader in the shipping industry.

Create the third trade route between Asia and Europe: China-Europe Land-Sea Express Line

Previously, arriving at Piraeus meant reaching the destination, where ships would unload and leave. Today, with the opening of the China-Europe Land-Sea Express Line, Piraeus Port has become a new starting point.

The China-Europe Land-Sea Express Line is an important channel connecting land and sea. It starts from Piraeus, Greece in the south, passes through Skopje, Macedonia and Belgrade in Serbia, all the way to Budapest, Hungary. In June this year, with the Hisense special train of the China-Europe Land-Sea Express Line departing from the Port of Trieste in Italy to Slovenia, the fourth channel of COSCO Shipping’s China-Europe Land-Sea Express Line in continental Europe was officially opened.

It is reported that this express line can radiate 9 countries and 71 million people along the route, which greatly saves the circulation time and cost for the supply of goods. COSCO Shipping plans to build the China-Europe Land-Sea Express Line into the third trade channel between Asia and Europe. The group once introduced that the current trade routes from the Far East to Europe are mainly shipping routes and China-Europe freight trains. COSCO Shipping hopes to use Piraeus Port as a hub to open The sea-rail combined transport route from the Far East to Piraeus Port by sea, and then from the Piraeus Port Railway to the European inland, perfectly connects the “Maritime Silk Road” and “Land Silk Road” in Europe.

In Wei Hongxu’s view, the establishment and dredging of new trade channels will have a positive effect on China-EU trade and investment. “For Greece, although it is a country in the euro area, its cost of living and wages are lower than other countries in the euro area, which makes it quite attractive for Chinese companies to invest in Europe. After the opening of the China-Europe Land-Sea Express, Greece can act as a It is a ‘springboard’ for Chinese enterprises to enter the European inland area, attracting Chinese enterprises to increase their investment. At the same time, this will also be a starting point for European exports to China, attracting enterprises from other countries in the euro area (in China) to land ,” he said.

According to data from the General Administration of Customs of China, from January to June 2022, the total import and export volume between China and Greece reached 46 billion yuan, a year-on-year increase of 36.5%. Wei Hongxu pointed out, “At present, although the volume of trade and investment between China and Greece is growing rapidly, the scale of mutual investment and trade is still relatively small.” Under this circumstance, with the development of Piraeus Port and the opening of the China-Europe Land-Sea Express Line, the growth space of Sino-Greece trade is expected to be broader.

On the other hand, for the joint construction of the “Belt and Road”, Wei Hongxu believes that the success of the flagship project has a demonstration effect, and will also drive a series of enterprises to participate in the cooperation as suppliers and service providers. The experience of Piraeus Port itself lies in the cooperation between governments, both parties can take care of their respective interests and achieve a win-win situation.

“But broader cooperation also lies in the market-oriented cooperation between enterprises, which also has many challenges in market mechanism, business environment, and culture. From the cooperation projects between governments to the spontaneous market behavior of enterprises, it is also necessary to The longer road also requires the governments of both sides to directly establish a more effective and safer mechanism for market cooperation and make corresponding arrangements.” Wei Hongxu said.

The field of cooperation may expand to life science and technology

In 2018, Greece and China signed a memorandum of understanding on the “Belt and Road” cooperation, becoming the first European developed country to sign such a memorandum with China. Since then, China-Greece cooperation has entered a new stage.

Chinese Ambassador to Greece Xiao Junzheng once said in an interview that China-Greece relations have two major ties, one is cultural exchanges, and the other is mutually beneficial cooperation. Under the guidance of the joint construction of the “Belt and Road” and the cooperation between China and Central and Eastern European countries, China and Greece have achieved mutual benefit, win-win results and common development. Bilateral trade volume jumped from less than $100 million in the early 1990s to $12.15 billion in 2021.

Besides trade, what areas will the follow-up cooperation between China and Greece focus on? Recently, the Greek ambassador to China, George Iliopoulos, answered this in his article, “China’s investment in Greece has expanded to some other fields, such as real estate, energy and technology. Life sciences and technology are the future. Two potential areas of cooperation. This Covid-19 pandemic has brought the life sciences sector to the fore. Investments in pharmaceutical production in Greece have tripled, mainly because Greece is a leading exporter of pharmaceuticals in South-Eastern Europe and beyond.”

In Wei Hongxu’s view, in the current economic situation, the specific areas of cooperation still depend on the real needs of both sides, “it can be in the field of infrastructure construction, in the field of new energy, in the field of tourism, culture, education and other service trade, and also in the related fields of medicine, telecommunications and electrical appliances, which are currently in high demand”.

Wei Hongxu believes that the European economic downturn and gradual fragmentation are aspects of bilateral cooperation between China and Europe that need attention, but the European market still has a lot of opportunities and potential, the European economic base is still strong, and there is still a lot of potential for cooperation between China and Europe.