Yannis Diamantidis says the fund provided by the Chinese government will help create more job opportunities in Greece. Provided to China Daily

Nation willing to help European country by boosting ship-financing fund for shippers

Yannis Diamantidis, Greece's Maritime Affairs, Islands & Fisheries Minister, could not have chosen a more opportune time to visit China and foster closer transport links.

A fleet of seven ships sent by Greek Prime Minister George Papandreou evacuated more than 7,000 Chinese nationals in February from strife-torn Libya.

During his meeting with Diamantidis, Vice-Premier Zhang Dejiang thanked the Greek government for its timely help in rescuing Chinese nationals stranded in Libya.

In an interview with China Daily, Diamantidis says that the evacuation efforts were a "good example of how the two leading countries in shipping can cooperate successfully".

Cooperation, he says, was the focus of his visit to China.

During his visit, Diamantidis and Weng Mengyong, deputy minister at the Ministry of Transport, reached an agreement on an action plan to further consolidate the Memorandum of Understanding (MOU) on maritime affairs signed by the two governments in June 2010.

The action plan refers to specific cooperation in 2011 and 2012, and encompasses both the state and non-state shipping and cargo handling companies of the two countries. Under the plan, both countries will undertake to promote their hub port cooperation and secure the funding for the construction of more Greek ships by Chinese shipyards.

The Chinese government has agreed to create a $5 billion (3.6 billion euros) development fund to help finance the building of Greek ships in Chinese yards.

"Although we have not decided with which shipyards the Greek ship owners will be working with, we have already placed orders for some 350 vessels so far," says Diamantidis.

"What is more inspiring to us is that the Chinese government is keen on hiking the development fund outlay to between $8 billion to $10 billion."

The fund provided by the Chinese government will not only help boost the shipping industry in Greece but also help in repaying the loans taken from the International Monetary Fund.

"The fund expansion will help create more job opportunities in Greece and accelerate capital flows," says Diamantidis.

Greece has been heavily in debt ever since late 2009. Although the new government has been striving to reduce the debt ratio from 16 percent to 8.9 percent within only 15 months, the difficulty is still lying ahead.

"The recent global economic crisis has affected the shipping sector. Besides, political instability in major shipping transit areas, piracy, climate change and environmental problems constitute challenges that all countries should jointly address," says Diamantidis.

"It is therefore imperative for world leaders in the field of maritime affairs, such as Greece and China, to explore new areas of bilateral cooperation as well as within the context of international organizations such as the International Maritime Organization."

To seek financial support from the Chinese government, Diamantidis met three of China's biggest banking groups, Bank of China, China Development Bank and the Export-Import Bank of China, during his stay in Beijing. He also visited the Shanghai Stock Exchange on Feb 25.

"Some of the Greek ship owners have successfully listed their companies on the New York Stock Exchange and London Stock Exchange. If it permits, these ship owners may also consider listing in the Shanghai Stock Exchange," Diamantidis says.

An important stopover for Diamantidis during his brief stay in Shanghai was to the China Ocean Shipping Co (Cosco).

Prior to that, Wang Xingru, managing director of Cosco Shipyard Group, signed shipbuilding contracts to build 11 bulk carriers and MOUs for another four bulk vessels with his Greek counterparts.

On Oct 1 2009, the Piraeus Port Authority, the largest port in Greece, transferred the operation of Piraeus container terminals II and Pier III to Cosco Pacific, an agreement that was considered to be a gateway for trade between China and Europe.

It is estimated that Cosco's investment in the Port of Piraeus will reach 15 billion euros annually.

"The Piraeus project opens up a new chapter for Cosco's presence in Greece, as we are becoming a more significant operator of container terminals in the world. Our commitment to make Piraeus a better trans-shipment hub in the region is based on the long term, and we aim to achieve a win-win situation with our Greek partners," says Wei Jiafu, president of Cosco.

"China and Greece are both influential maritime nations. With a globalized economy and prospering trade relations across continents, we see modern shipping routes are functioning like a new Great Wall on the sea, one that links China and Greece in a very unique and extraordinary way."

The cooperation between China and Greece in shipbuilding started as early as 2000. Ever since, some 155 vessels built by Chinese shipyards have been delivered to Greek ship owners.

According to Lloyd's Register, by October 2009, there were 381 orders of Greek vessels made in the Chinese shipyards with a total of 28.44 million dead-weight tons, among which 244 were bulk carriers and 120 were tankers.

Despite its small size, Greece claims more than 4,000 ships globally and a 15 percent of the world's total moving capacity.

Shipping, as the most important pillar of Greece's economy, contributes up to 5 percent of the country's GDP on average.

In the past decade, shipping has contributed more than $140 billion to the country's GDP.

Seeking cooperation with other leading maritime nations such as Greece is also in China's interests.

Li Shaode, president of the China Shipping Co, proposed to the Chinese People's Political Consultative Conference that the country should attach more importance to the shipping industry.

"We should encourage the shipping industry transform into a modern development mode, explore the reform of shipping tax and encourage more Chinese shipping companies seek overseas cooperation," Li says.