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The Weekend Neos Kosmos : 9 July 2016
NEWS 4 THE WEEKEND NEOS KOSMOS | SATURDAY 9 JULY 2016 The China Syndrome Alexis Tsipras’ trip to China all but proved the Asian economy’s dominance in Europe, highlighting a kind of interdependence that is already being felt in Australia DIGITAL.NEOSKOSMOS.COM NIKOS FOTAKIS "The next step is to make coffee." Alexis Tsipras was commenting on the features and apps of one of the latest mobile phones manufactured by ZTE, the Chinese tech giant, during his recent trip in China. He then went on to put on a pair of virtual reality goggles, providing the Greek media with another chance to mock him, making the video of him, immersed in whatever it was he was experiencing, with a genuine child-like expression on his face, viral. It was one of the 'highlights' of a much-ridiculed and criticised official visit. Critics in Greece, in true Greek-media fashion, didn't miss the chance to reprimand the PM for his sartorial choices; neither he, nor the other members of his cabinet escorting him in China bothered to dress up for the official visit, opting for their trademark casual, ‘I'd-rather-die-than-wear-a-tie’ look. Sartorial criticism even expanded to the PM's partner, who fell victim of merciless trolling for her "inappropriate" choice of attire. In fact, reading most of the commentary, one would be under the impression that the Greek delegation were visiting China for fashion and lifestyle purposes, embarrassing Greece for their lack of finesse and respect for protocol. If there was any reason for Greek citizens to feel embarrassed about, however, it was not Alexis Tsipras' lack of tie (underlined by his persistence in adorning his 'official' look with a pochette), or his doeeyed, touristy approach to the official trip, his cliched expressions of admiration over the China wall and the products of Chinese tech giants. It was the fact that this trip signals Greece's utter submission to China. A country brought to its knees by the combined effects of recession, EU-imposed fiscal austerity, decades of corruption and plain incompetence, Greece is desperate for investments and China seems to be one of the very few countries willing to invest. Seen in this light, Tsipras' visit to China, as a salesman of Greek assets, should be seen as a success, if only because it further strengthened the presence of Cosco in the Port of Piraeus. On the exact last day of his trip, the Greek PM met with the shipping giant's chairman, Xu Lirong, who expressed his intention to invest €600 million at the port of Piraeus, aiming to make it the biggest commercial port in the Medi- terranean (and one of Europe's most important), but also to transform it to the biggest ship repair point in the eastern Mediterranean and one of the most important cruise tourism junctions in the world. In addition to that, Tsipras returned home with a series of deals, not least of them one between the official China Investment Promotion Agency and its Greek counterpart, Enterprise Greece. During his visit, Tsipras presented his counterpart Li Keqiang with six prospective areas for possible strategic investments by Beijing and Chinese capital, namely, a projected airport at the Kastelli site in central Crete; Chinese expansion in a mostly depressed shipbuilding and ship repair zone west of the Greek capital; a presence in the Thriasio industrial and logistic district, also west of Athens proper; investment in Greece's twice recapitalised banking sector; boosting Greek farm product exports to the massive Chinese market; establishment of a new R&D centre in Greece by Chinese interests, as well as Chinese capital investment in tourism projects and real estate. If any of these plans go through, the collaboration will prove to make Greece one of the major stepping stones for China, in its plan for expansion to the Mediterranean, as well as the rest of the EU - which is China's biggest trading partner and the most significant market for its exports. So no, nobody can really blame Alexis Tsipras for turning to China for investment; leaders of healthier economies have done the same. In fact, after the ‘Brexit’ referendum, both the UK and EU have their eyes set on China as a way to deal with financial uncertainty, making the country one of the few winners in this scenario. Chinese companies already own many ‘European’ staples, such as France's Club Med, the makers of Pirelli tires, Volvo cars and Weetabix cereal and football teams Inter Milan of Italy and Aston Villa of Britain. Which is why, on the aftermath of Brexit, all eyes turned to China. It is a matter of when, not if tremors in France, Denmark, Sweden and other wealthy EU nations will be felt in China. And the domino effect will not stop there. It is almost certain to reach Australia, through China's supply chains and demand for commodities. With the Australian economy facing a decline in growth, all major international credit rating agen- cies – Moody's, Fitch and Standard & Poor's - warned that Australia's AAA credit rating is under severe pressure and will probably be diminished. Leaving the AAA club (populated by countries such as Canada and Germany) might not mean much and it will most certainly not mean that Australia is in danger of becoming the US (rated AA+), let alone Greece, but it sure implies that it will need to further strengthen relations with China, a country set to export $1 trillion of services per year. Its government has already set the country's firms targets to invest $720b overseas over the next four years. Which may justify Australia's visa programs for 'Significant and Premium Investors', even amid criticism that they are in large part to blame for the meteoric rise in investment property value that many see as proof of a housing bubble. If it bursts, it might ironically set off a global financial tsunami that could reach the EU - and Greece - via China. The inevitability of globalisation and its implications has made the world a very complex place. Which is why Tsipras seemed so happy, when lost in the virtual reality offered to him through the ZTE goggles.
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