China’s deep pockets and generous investments are turning to Southern Europe —the latest target in its influence campaign to establish Chinese business, cultural, and diplomatic presence around the world. Chinese state-owned companies are using their financial leverage to build strongholds in Portugal, Greece and Italy.
Since the 2008 financial crisis, China has become a significant creditor to many severely indebted European Union nations. Portugal, Greece, and Italy were all forced to privatize some of their state assets following the euro-debt crisis, making their economies partly dependent on Chinese investors. Private acquisitions also multiplied.
China’s investment strategy in Southern Europe has involved significant purchases of large European firms. When Portugal started privatizing some of its utilities, China Three Gorges Corporation (CTG), a Chinese state-owned power company, became a shareholder of Energias de Portugal SA (EDP), the country’s formerly state-owned grid company. CTG is now bidding for a majority share of EDP’s capital. Other Chinese investments in energy include Redes Energéticas Nacionais and Galp Energia. Additionally, China has bought stakes in Portugal’s national carrier Transportes Aéreos Portugueses, insurer Fidelidade, hospitals, real estate and even media. KNG, a Macau-based Chinese fund, acquired 30 percent of Global Media Group, the owner of the Portuguese newspapers Diário de Notícias and Jornal de Notícias , and Radio TSF.
China’s influence campaign isn’t limited only to Portugal. In Greece, shipping giant China Overseas Shipping Group Company (COSCO) was granted a license to run no less than 67 percent of Greece’s largest seaport, Athens’ Piraeus harbor—establishing a Mediterranean hub for Chinese companies and challenging Greek shipowners. Furthermore, other examples include China State Grid, a Chinese-state owned utility company, which has invested in IPTO, a major Greek transmission operator.
Next door in Italy, Chinese investors also bought brands such as tire manufacturer Pirelli or machine-tools maker Cifa. Chinese funds invested in strategic Italian energy entities such as Eni, Enel or the Italian national electricity agency CDP Reti (China State Grid acquired 35 percent of its capital). Read more
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