BEIJING -- China Ocean Shipping (Group) is on track to acquire Greece's largest container port, gaining a key foothold to expand China's economic and military presence in Europe and Africa under the "One Belt, One Road" trade route initiative.
The state-owned shipper, also known as Cosco Group and owned by China COSCO Holdings, plans to acquire 51% of Piraeus Port Authority's outstanding shares for 300 million to 400 million euro ($325 million to $433 million). Located near Athens, the port of Piraeus ranks among the largest in Europe and serves as a key maritime hub for Chinese exports to western Europe and Africa. Beijing was eager to gain control of Piraeus, a major post along both sea and land routes, especially due to its lack of allies in the region.
Cosco signed a 35-year concession agreement for the port back in 2009 for over 4 billion euro. It has since built additional docks accommodating larger ships and installed new cranes. It could increase such efforts once it officially acquires the Greek port operator.
Piraeus is expected to become a central location along Beijing's proposed trade route. Electronics and textiles exported from China would be unloaded there initially, then taken to eastern and central Europe via rail. Cosco says this cuts shipping time by seven to 10 days compared with unloading the goods in Germany or the Netherlands. Cosco has more than quadrupled the volume of container shipments it handles at Piraeus in the past five years.
Beijing also sees military uses for Piraeus, including as a supply base for its navy. China's largest amphibious landing ship, the Changbaishan, docked in the port last February. China could incorporate the port into its security strategy if it can enhance ties with Greece through economic cooperation or other means.
China is boosting infrastructure-related investments in eastern Europe as well. State-owned China Railway Group kicked off a 350km rail project between Serbia and Hungary in December. A coalition of state-owned companies also decided to acquire a major port in Turkey. Beijing first plans to establish a logistics network reaching from Turkey to central Europe, building both economic and political influence in the region.
The "One Belt, One Road" effort stems partly from China's rivalry with the U.S. In the Trans-Pacific Partnership trade deal reached in October, Washington focused on creating a trade and investment regime without Chinese input. Beijing's trade initiative is an attempt to counter such moves in the Pacific region.
Yet roadblocks remain. China led some infrastructure projects in Southeast Asia but has been criticized for sloppy plans and delays. And though China officially launched the Asian Infrastructure Investment Bank late last year, any attempt to manipulate the organization to benefit itself likely will draw criticism from other founding members such as the U.K., Germany and France.