Cosco formally takes over Piraeus port with stock exchange ceremony

Executives of Chinese shipping behemoth Cosco Shipping Co. Ltd ring the bell for the formal start of trading on the Athens Stock Exchange after signing the agreement that made Cosco the 51 percent owner of Greece's biggest harbor in Athens, Greece, Aug 10 2016. [Photo/Provided to China Daily]

Executives of Chinese shipping behemoth Cosco Shipping Co. Ltd rang the bell for the formal start of trading on the Athens Stock Exchange on Aug 10, signifying hopes that one of the biggest foreign investments in recent years will mark a new start for Greece's lacklustre economy.

Wan Min, board president of Cosco Shipping, and the new president of the board of Piraeus Port Authority SA, rang the bell shortly after signing the agreement that made Cosco the 51 percent owner of Greece's biggest harbor.

The deal on the transfer of the majority stake is the first overseas acquisition by the China group since its reorganization, and the first successful sale by the Greek government required under the terms of a third financial rescue to keep the country in the euro area.

Cosco paid 280.5 million euros for 51 percent of Piraeus Port, the first step in a series that will include investments and a further acquisition of shares in the port that will be China's beachhead to Europe. The value of the entire investment, Greek officials said in April, is about 1.5 billion euros.

Wan Min was named chairman of the board of Piraeus Port and Fu Chengqiu as chief executive officer of the Greek company. Cosco will make investments of at least 300 million euros to streamline operations at the port and then pay an additional 88 million euros to bring its stake up to 67 percent over the next five years.

Projects for the port – Europe's biggest passenger terminal – will include expanding the cruise port, an upgrade of the ship-building zone and the construction of multi-story garage in the RO-RO (or "roll-on, roll-off") vessel port.

The group will aims to make Piraeus "one of the largest container transit ports in Europe and one of the biggest home ports for cruise operators in the world," according to Greece's state asset sales fund, which managed the transaction.

Cosco has been operating at Piraeus since 2009, boosting operations at the harbor by operating one of the ancient port's container terminals.

Buying a majority stake in Piraeus Port, which the Chinese have already made one of the fastest-growing harbors in the world, ensures control over a key thoroughfare in Beijing's Belt and Road initiative to recreate a commercial empire pumping Chinese goods throughout the continent, as well as trade heading for China.

For Cosco, Piraeus is the point at which China nudges into Europe as part of President Xi Jinping's vision of the Belt and Road , a modern-day Silk Road, as China's gateway to Europe.

The Athens-based Foundation for Economic and Industrial Research estimated in March that the deal would add 0.8 percentage point to GDP growth by the end of 2025, create more than 31,000 jobs - in a nation with the EU's highest unemployment - and reduce public debt by 2.3 percentage points of GDP. It could draw 867 million euros in investments from other companies in the next 10 years.

Maria Petrakis is a freelance journalist based in Athens. She contributed this report to China Daily.