Report International Trade

China bites into Europe’s soft underbelly

Beijing is fast building a bridgehead in Europe by buying up government debt and key strategic assets on the cheap in countries like Greece, Ireland and Spain that have been enfeebled by the crisis. But its long-term ambitions are not just to make money — it wants more of a say in Brussels too.

Published on 2 November 2010 at 13:39
 | One day, all this could be yours. China's Premier Wen Jiabao and Greek PM George Papandreou at the Parthenon, Athens 3 October, 2010.

When the Chinese prime minister Wen Jiabao visited Athens last month, whose port has just been bought by Beijing, he came bearing gifts: billions of dollars worth of new business deals. “The support of our Chinese friends is fortunate for us,” said Greece’s minister of state, Haris Pamboukis. But China had much greater ambitions. Greece is one foothold for China’s strategic push into Europe. It is snapping up assets that have nosedived in value during the financial crisis and becoming a significant partner of other hard-hit European nations.

Ultimately, analysts say, Beijing hopes to achieve not just more business for its own companies, but also greater influence over the economic policies set in Brussels and Germany. “They are indicating a willingness to stick their nose into Europe’s business,” said Carl B. Weinberg, chief United States economist of High Frequency Economics. “It’s very clever and sends a clear message,” he added, “that China is a force to be contended with.”

That message will be reinforced by a visit this week by China’s president Hu Jintao to Portugal and France. Europe’s financial crisis has created buying opportunities for cash-rich investors and China is leading the charge. It is singling out Greek, Spanish and other downgraded government debt, as well as ports, highways and industries in troubled countries on Europe’s eastern and southern edges. Ireland and Hungary, among others, are also competing to lure Chinese investments, in the hopes that they will create thousands of new jobs. Read full article in the New York Times...

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