The Chinese Are Coming

Those Chinese 'private' state loans (from state owned companies) ......

The Chinese Are Coming .... To
A Neighbourhood Near You Soon!

...... that have brought a few Asian countries such as Sri Lanka to their knees, have also been quietly taking place in Europe's smaller economies.

For example: In Greece, the Athens port of Piraeus, is now two-thirds owned by Cosco, a Chinese state owned company. This is not in some fringe, outside the European Union country, but rather deep inside the EU itself .... the worlds second (or third) largest economic bloc. 

But the Greek government was forced to sell it - and other public owned assets - in the aftermath of the economic turmoil that hit it so hard in 2008, as part of the bailouts it got from Germany aka the EU.

However the Cosco Piraeus investment has brought the port up to latest standards, and made it the EU's second largest port behind Rotterdam, with aspirations to overtake the Dutch port. But at a cost in environmental issues, and allegedly safety shortcuts. Deep dredging, and the ports physical expansion have raised local opposition, and trade unions have questioned safety at the port after people killed in accidents, with allegations that despite employment levels rising, its still relatively understaffed to keep costs down.

However its expansion and growth has helped the Greek economy recover after decades of stagnation, and Greece is now one of the fastest growing EU economies. But many claim its on the back of less workers rights and lower standards i.e cheap and depressed labour costs.

Similarly in Serbia, a copper mine near the Serbian city Bor has had millions invested in it, in an unprecedented expansion, after being bought by a Chinese state backed company. But once again at much environmental cost, with local fresh water, lakes and reservoirs contaminated. Serbia also has less workers rights than the EU. The Chinese investors in Serbia, have even bought in Vietnamese as well as Chinese workers for some of their factories, such as at the Ling Long tyre factory operating inside Serbia, rather than employ locals. 

What the Serbs get out of such arrangements are not always clear, if local workers are not used, but as Serbia is an EU aspirant nation, it should be of some concern that China is employing migrants rather than locals, allegedly on middle eastern employment standards/wage contracts, such as those of foreign workers on the World Cup projects in Qatar get.

The tiny state of Montenegro, borrowed $1bnn (£793m) from China .... a loan to be repaid, to build a white elephant motorway project linking the port of Bar, on the Adriatic Sea in the south, to the border with Serbia, in the north. The EU had said it was too expensive and difficult, and advised against it .... Six years on, and the loan money has been largely spent, but only about 41km (25 miles) has been built .... Many doubt if it will ever be finished now, with many allegations of corruption and kickbacks draining the money. Whether Montenegro can get out of this financial hole, or China ends up owning the 'motorway to nowhere', remains to be seen.

Pelješac Bridge EU Funded - Chinese Built

In Croatia, another EU member state, the Pelješac bridge is nearing completion at a cost of millions that was wholly paid for by EU funds .... BUT shockingly, entirely built by Chinese workers, using Chinese steel, and right down to the last bolt. All the workers employed were brought over from China, even those many workers painting, sweeping and tarmacking the bridge, are all Chinese ... not one local job created with EU funds. Croatian male unemployment rates in 2022 are around 6.2%.

If the EU can't stop Chinese firms under bidding for construction projects that are being funded by the EU, then surely they can at least insist that 80 percent of the workforce on EU funded infrastructure projects be local or from the EU as a part of the bidding.

These Chinese state backed loans, are considered to be "debt traps" by some, as China gets to choose what happens if loans aren't repaid, and can extract economic or political concessions if the country receiving investment cannot repay. Many countries in Asia and Africa have accepted them, and are reportedly struggling to repay them .... with lack of transparency meaning that corruption is alleged.

So why should we care, if China ends up owning key infrastructure in Europe, or elsewhere such as ports in Sri Lanka (Hambantota International Port), or mines in Africa or Europe? 

Well apart from the strategic and security concerns (remember the Huawei rows a couple of years ago?), that allows China to exert pressure inside and outside the EU and other areas, there are other concerns about the financial instability this causes.

Most damagingly, these 'secret debts' not appearing on IMF/World bank ledgers. So some states debt ratings are distorted, allowing them to over borrow from other sources - with more likelihood of debt defaults (which usually fall on Western funds, not Chinese).