After its $140 billion EU and IMF bailout in May, Greece has found another big spender: China, which has dramatically boosted investments in the country. Recent agreements include $5 billion to upgrade Greece’s merchant marine, a 35-year deal to lease and operate the country’s main port, and the building of a logistics terminal to connect with southeastern Europe. China also plans investments in construction, telecoms, tourism, and railways—plus the purchase of 290 tons of olive oil. Premier Wen Jiabao also promised to keep buying Greek government bonds, which helped spur the euro to an eight-month high against the dollar last week.
China’s foray into Greece is part of its “go global” strategy that has seen the country’s foreign investments jump from less than $10 billion in 2004 to an expected $50 billion this year, making it the world’s fifth-largest foreign investor. Its companies’ investments in Europe were roughly twice those in North America, a result in part of the U.S.’s worry about China as a competitor.
Europe benefits from America’s unease. Fears of Chinese owners moving jobs and technology to Asia have been mostly unfounded; instead, Chinese investment, like any foreign investment, helps strengthen Europe’s industry. It’s also smart politics: by closing lucrative bilateral deals with individual countries, China has played them off one another and killed the emergence of an EU-wide China policy—reducing the bloc’s negotiating power.