Infrastructure and geopolitics: China’s emerging presence in the eastern mediterranean

Abstract

China is building an economic presence in the countries of the Eastern Mediterranean. Its involvement in major infrastructure projects is growing at a rapid pace and may have a significant impact on trade routes that traverse this strategically located region. This article outlines Chinese interests and activities in the Eastern Mediterranean and how these relate to geopolitical developments in the region. China’s most important infrastructure project in the region is the modernization and expansion of the container port of Piraeus, Greece, but other port and railway projects are also being developed.

Notes

1. Turkey, Syria, Lebanon, Israel, and the Palestinian Territories/State of Palestine (the latter is not recognized by a number of states).

2. Egypt.

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30. The Greek government had also been in discussion with port operating companies, in particular Hutchison Whampoa: ‘Case Study: Piraeus Container Terminal’, <http://www.ppptransport.eu/wiki/index.php/Case_Studies:_Piraeus_Container_Terminal> (accessed 6 December 2013). Cosco Pacific is the world’s fifth largest container terminal operator, with a global market share of 9 per cent in terms of throughput: Cosco Pacific, Annual Report 2012, Cosco Pacific, Hong Kong, 2013, title page. The company is listed on the Hong Kong stock exchange and 53 per cent-owned by Cosco Group, China’s largest shipping firm.

31. The investment in pier III involved €120 million and was financed through a 12-year bank loan with repayments starting in 2016: Keith Wallis, ‘Expansion at Greek container terminal’, South China Morning Post, 18 May 2012, <http://www.scmp.com/article/1001299/expansion-greek-container-terminal> (accessed 6 December 2013).

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33. In return, Cosco would no longer have to pay the fees to the Piraeus Port Authority that had originally been agreed upon in 2009 until Greece’s GDP returns to the level it was before the start of the financial crisis. The European Commission in 2012 started an investigation concerning possible unlawful state aid. Port Technology, ‘Piraeus privatization moves closer with COSCO investment’, 3 September 2013, <http://www.porttechnology.org/news/piraeus_privatisation_moves_closer_with_cosco_investment> (accessed 30 November 2013); David Glass, ‘Piraeus privatization and the Cosco Pacific expansion deal’, 3 September 2013, <http://www.seatrade-global.com/news/asia/piraeus-privatisation-and-the-cosco-pacific-expansion-deal.html> (accessed 3 December 2013).

34. Cosco Pacific holds its 50 per cent share in PCDC through its subsidiary Cosco Ports (Greece) Sarl. The other 50 per cent of PCD is owned by Elgeka through its 50.01 per cent subsidiary Diakinisis Port (CY) Ltd; see Elgeka website, <http://www.elgeka.gr/page/default.asp?la=2&id=1887 and http://english.capital.gr/news.asp?id=1238219>, Capital.gr, 13 July 2011 (accessed 20 August 2013).

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