China's gateway to Europe

As Sino-Greek maritime ties have deepened, China's investment in Greece's largest port, Piraeus, has emerged as a flagship project for the two nations. The Chinese shipping giant Cosco operates two of the three container terminals at Piraeus, employing about 600 Greek workers. The second terminal is in use while the third is not yet operational. Cosco leased the berths for 35 years at a cost of US$5 billion in June 2010.

"The Greek government sought to create a more competitive environment at Piraeus and Cosco was in the right place at the right time," said Fotis Manoussakis, chief economic consul at the Consulate of General of Greece in Shanghai.

Situated 10 kilometers from Athens in the East Mediterranean Sea, the Piraeus port enjoys a strategic location that could ultimately serve as the main hub for Chinese goods bound for Europe. In this scenario, Piraeus would become a one-stop shop for large container ships arriving from the Far East. The ships would unload at Piraeus and deliver to different European countries by land, which would be considerably faster than stopping off at each major port.

Meanwhile, Cosco's presence at Piraeus has transformed the port's competitive landscape, Vokos said.

"Ship operators can now choose between the two terminals," said Vokos in a telephone interview. "Many container ships prefer to use Cosco's terminal as it is already very productive."

Compared to Terminal 1, operated by the Piraeus Port Authority, it is estimated that Cosco's terminal has also been investing in newer equipment, he said.

The Cosco berth enjoys a further distinction – it is not subject to the influence of Greece's powerful labor unions. The American media organization NPR published a story in June 2011 that criticized Cosco for allegedly not respecting the labor rights of Greek workers.

Kyrakides, however, believes the benefits of Cosco's investment in Piraeus far outweigh the drawbacks.

"It's a fantastic agreement for China and Europe," he said. "Now that the Piraeus Port Authority faces genuine competition, I think its own efficiency will improve." As a country dependent on services facing a daunting fiscal situation, Greece must improve its competitiveness, he added.