Greece’s influx of Chinese capital
Economic growth brought about a growth in incomes and an expanding middle class. According to the World Bank, between 2000 and 2016, the average annual income per capita in China increased eight times, from $790 to $6,100 today.
As seen in a joint survey by Bain&Co and China Merchants Bank, the number of Chinese with over $1.5 million in investable assets, a group also known
According to Bain & Company, in 2011, only a small share of affluent citizens (19%) invested in foreign assets. By 2017 this figure had grown to 56%. The volume of direct Chinese investment in foreign assets has grown 47 times over the past decade from $4.6 billion in 2006 to $217.2 billion in 2016.
According to the American Enterprise Institute and Heritage Foundation, the most popular country among Chinese investors is the United States (US): between 2005 and 2016 it received about $149.7 billion from Chinese nationals. Generally, the presence of Chinese capital globally is and not associated with any continent in particular. Australia is second in Chinese FDI, followed by Canada and Brazil.
The main economic sectors the Chinese invest in are energy and power, and transport. In advanced economies, Chinese investors actively purchase companies and properties, while in developing ones, they participate in construction and infrastructure projects in energy and power, logistics and transport.
Chinese nationals are among the most active in most
The exodus of the capital from the country and the active emigration of the affluent population have made the Chinese government seriously consider tightening regulatory controls over their
However, analysts are divided about the efficiency of the measures taken. For instance, in an interview with Citilab, Lawrence Yun, chief economist and head of research at the National Association of Realtors, claimed that the number of enquiries for US properties by Chinese nationals has been growing since early 2017. He also said that the enterprising Chinese are quick to find ways to avoid the restrictions, such as syphoning off funds with the help of numerous relatives and neighbours and paying them personally within the country.
Conversely, macro statistics are more negative. Forbes reported, citing the Chinese Ministry of Commerce, that from January 2017 to October 2017, Chinese FDI shrank by more than
China and Greece
The Chinese business community is looking for new areas for investment and has been actively cooperating with Greece in recent years. According to the Bank of Greece, the total amount invested by Chinese and Hongkongers in Greece between 2005 and 2016 totalled €585.2 million, €346.3 million of which was invested in 2016. However, according to the Institute of International Economic Relations, the real transaction volume is much larger. According to the Chinese Ministry of Commerce, for example, by late June 2017, China had invested over $1.3 billion in Greece. According to the Embassy of Greece in Beijing, this amount is $1.6 billion, and, according to the American Enterprise Institute, China invested about $6.7 billion in Greece between 2005 and 2017.
The growth in Chinese FDI is primarily associated with a number of major privatisation projects involving Chinese companies:
- In 2016, COSCO, one of the largest port operators in the world, acquired 51% shares of the Piraeus Port Authority for €280.5 million. In five years, the Chinese company will take possession of another 16% shares for €88 million. As part of the deal, COSCO must invest €300 million into the modernisation of shiprepairing assets and logistics during this time.
- In June 2017, State Grid Corp. purchased a 24% stake in Greek
state-ownedpower grid operator ADMIE for €320 million.
At the same time, the Chinese business community is actively cooperating with private Greek companies. In 2014, Chinese development corporation Sinohydro and Greek company Terna Energy signed a memorandum of understanding (MOU) on future renewable energy projects, which exceed $1.2 billion. The Industrial and Commercial Bank of China (ICBC) also participated in the MOU.
In November 2017, Shenhua Group acquired 75% of the shares of four wind parks owned by Copelouzos Group. The transaction amount was not disclosed, but the companies estimate the value of the future projects the field of green energy at €3 billion.
In addition, Chinese nationals make up the largest share of participants
The active expansion of China into Greek infrastructure is determined by two factors. First, the global financial and the Greek debt crises have led to a general reduction in the prices of Greek assets, making them risky but attractive investment vehicles. The second factor
Artyom Shitkov, Tranio
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