Sunday, October 3, 2010

China Doubles Down on Export Strategy

The two leaders (Prime Minister George Papandreou and Chinese Premier Wen Jiabao) will today visit Piraeus Port, Greece’s biggest, where Asia’s third-biggest container terminal operator has a 35-year concession to run some operations. China plans to deepen its Piraeus investment to move 3.7 million containers a year by 2015.

Cosco Pacific Ltd. won the concession to run container operations at Piraeus Port’s Pier II and build and run Pier III in 2009. Greece’s government owns 75 percent of Piraeus Port Authority SA, the company that manages the harbor.

Wen will speak in the Greek parliament on Oct. 3, Ambassador Luo Linquan said in an interview with China’s state- run news agency Xinhua.

In June, Greece and China signed 14 agreements in fields including shipping, construction and telecommunications during a visit by Vice Premier of China Zhang Dejiang.(1)

Chinese goods are prevelant in Europe but not to the extent they are in the United States. This will change with their administration of Greece's largest port. China is using its FX reserves to run its competitors out of town, putting pressure on Eastern European exporters initially but even Germany eventually as they are charging up the value added chain. In short, what global rebalancing ? China's political system is in the grip of export cartels every much as the Anglo system is in the grip of finance

Greece has long been the soft geo-political underbelly of Europe going back to the days of the Ottoman Empire. This was probably the reason for its quick (and quixotic) inclusion into the Euro. China's push into the continent through its control of Greek ports will add to the ballooning global imbalances that are taking the world capitalist system to the brink of implosion.

1'China to Buy Greek Bonds, Support Shipping, Wen Says' Bloomberg

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