Hours After Debt Downgrade Greece Gets Vote of Confidence From China

Chinese sign multibillion euro contracts with Greece

Greece’s prime minister George Papandreou welcomes Chinese vice-premier Zhang Dejiang who brought good news to the debt-ridden country.

Greece’s debt-ridden economy has received unexpected endorsement from China as the two countries announced multibillion euro accords to boost cooperation in fields as diverse as shipping, tourism and telecommunications.

The deals, which will see Greek olive oil being exported to China, were a welcome relief for a government smarting over Moody’s move hours earlier to downgrade the nation’s credit rating to junk.

As investors moved in the other direction, the world’s pre-eminent emerging economy embraced Greece. Signing the agreements, China’s vice premier Zhang Dejiang not only lauded Athens’ efforts to resolve its worst debt crisis in years but gave the eurozone’s weakest link a public vote of confidence, declaring it would soon come out of the woods.

“I am convinced that Greece can overcome its current economic difficulties,” said the politician who arrived in Athens with 30 of the economic power’s leading businessmen. “The Chinese government will encourage Chinese businesses to come to Greece to seek investment opportunities.”

Greek officials said the fourteen deals amounted to the biggest single investment by China in Europe. China views Greece as a “perfect gateway” to the continent and Balkan peninsular where Chinese exports have proliferated in recent years.

Under the agreement, Cosco, one of the world’s largest container terminal operators, will extend its reach with the construction of up to 15 dry bulk carriers in Greece. The company took over cargo management at Pireaus, the eastern Mediterranean’s premier dockyard, on a 35-year concession worth $1bn (£680m) last year.

The Chinese construction company BCEGI also signed an accord, thought to be worth €100m (£830m), to develop a hotel and shopping mall complex in Pireaus.

Other deals include the exchange of know-how between China’s Huawei Technologies and the Greek telecoms organization OTE and four agreements signed by food firms to export olive oil to China.

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