The One Belt One Road (OBOR) Initiative and the Port of Piraeus

Understanding Greece's Role in China's Strategy to Construct a Unified Large Market

Tatiana Gontika

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000422948
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Manufactura

This book provides the reader with a better understanding of the One Belt One Road (OBOR) initiative, its various projects around the world, and its consequences at a local as well as an international level. Background information on both Chinese and Greek sociopolitical history and their maritime industry is provided. The book also provides readers with the opinions of people directly involved with the Piraeus Port—China Ocean Shipping (Group) Company (COSCO) dealthrough interviewsconducted and included in the book.

OBOR, a signature initiative of Chinese President Xi Jinping, is currently one of the most frequently discussed enterprises worldwide. This controversial mix of worldwide projects has put both China and Xi at the center of attention, and not in a positive way. Of course, not all projects included in the initiative have been or are likely to be successful, but the initiative has far-ranging economic, cultural, and political potential. OBOR, in its essence, is an attemptby the Chinese government to secure a paramount position in global finance for the country and ensure that primacy extends far into the future. In particular, it is an attempt to ensure that there are enough natural resources for China to support itself in the long term. Therefore, the areas selected for the implementation and development of OBOR are deliberately strategic. One of the countries that China has chosen to invest in is Greece, specifically the Port of Piraeus.

The OBOR initiative has many similarities with the ancient Silk Road. Although the ancient route and modern concept are in no way identical, many similarities become evident when the two are compared. To understand China's motivation to build such a network, looking back at history is required.

This project was long in the making. Various discussions took place both on an international and a domestic level until all parties came to an agreement. The deal at Piraeus between Greece and China affected more people than the politicians and the shipowners—it affected everyone involved in the operations of the port as well as the residents of the area. To further comprehend the impact on their lives, one must see things through their eyes, and there is no better way than contacting individuals and conversing with them.

In conclusion, the specific deal at Piraeus and the OBOR initiative as a whole have the potential of benefiting the international and local communities. However, specific measures must be taken, and governments must collaborate in order for the deal in Piraeus and the OBOR initiative to have the most beneficial and the least negative impact.

Chapter 1
Introduction

One Belt One Road (OBOR), a signature initiative of Chinese President Xi Jinping, seems to be one of the most frequently discussed enterprises in the world today. This controversial mix of worldwide projects has put China and Xi in the center of attention and not always in a positive way. Of course, not all projects included in the initiative have been or are likely to be successful, but the initiative has far-ranging economic, cultural, and political potential.

OBOR, in its essence, is an attempt of the Chinese government to secure for the country a paramount position in global finance and ensure that primacy extends far into the future. In particular, it is an attempt to ensure enough natural resources to support China in the long term. Therefore, the areas picked for the implementation and development of OBOR are deliberately strategic. One of the countries in which China has picked to invest, and which is a main focus of this thesis, is Greece, specifically the port of Piraeus.

It is naïve to think that such a project is a new concept. The OBOR initiative has many similarities to the ancient Silk Road. Although the ancient route and modern concept are in no way identical, when the two are compared many similarities rise. The main difference between the two is that the Silk Road was created somewhat organically, whereas the OBOR is planned in detail. On the other hand, the main similarity is the fact that both represent a network of trade. Moreover, both combine land and sea transport.

To understand China’s motivation to build such a network, an examination of some of its history is in order.

This thesis divides a historical overview of China into three main eras: (1) Emperor rule, (2) the transition from emperors to governors, and (3) the modern Chinese Republic. During the first two phases, China was a major player in the Silk Road, and during the third one, China is the mastermind behind the OBOR.

While examining China’s history, it is important to keep in mind the four industrial revolutions,¹ because China did not follow the rest of the world and compressed all four stages in under fifty years.² The First Industrial Revolution took place during the second half of the 18th century and transformed the primarily agricultural societies into industrial. The Second Industrial Revolution lasted from the late 19th century until the early 20th century and was also focused mainly on industrialization and mass production of consumer goods. The Third Industrial Revolution is the digital revolution that has been occurring since the middle of the last century. In 1954, for example, General Electric installed the UNIVAVAC I computer. A year later, in 1955, John Hancock Mutual Life Insurance Co. digitalized their customer information.³ These are only two of the numerous examples of companies who transitioned using digital administrative and/or operational systems. Finally, the Fourth Industrial Revolution, though sometimes perceived as a continuation of the third, is still digital but defers in the velocity, scope, and systems impact.⁴ A milestone event of the Fourth Industrial Revolution is the opening of the Internet to all users. An initiative established and seen through by the George H.W. Bush administration.⁵

China’s position today is only in part due to its political and socioeconomic past. A big part of China is its maritime industry and the companies associated with it. Analytically, it is useful to divide an overview of Chinese shipping into two periods. The first one covers the establishment of the People’s Republic of China in 1949 until the death of Mao Tse Tung in 1976 and the primacy of Deng Xiao Ping in 1978. The second period is from 1978 to date. The first period happened under a period of planned economy in China, whereas the second continues to take place in a more open economy. This division is analytically useful because the first phase of Chinese shipping is the initial development and it was greatly based on leasing foreign vessels. During the second phase, China established its own merchant fleet and became a major player in international shipping and ship building.

Chinese shipping is closely connected to some shipping companies, which have transformed along the way. This thesis focuses in depth on China Ocean Shipping Company (COSCO), because it is the one involved in the port of Piraeus. COSCO, although allegedly an independent entity, is very much associated with and is a direct extension of the Chinese government.

A deep understanding of China’s maritime history is founded on an understanding of the importance of both ancient and modern trading networks. Through the study of the ancient Silk Road network, one can comprehend how surprisingly connected the world was back then. Goods produced in the far east found their way to Greece and Rome and vice versa. Of course, the routes were affected by political change or social instability, and therefore, new trading points were sometimes created. One of the most well-known travelers of the Silk Road was Marco Polo, who along with his family completed a 24-year round trip from Rome to China and traveled most of the Silk Road routes. Marco Polo was the only one to document and publish detailed analysis and description of his travels through which important information is preserved.

Transitioning from the ancient Silk Road to the OBOR initiative has been neither easy nor smooth, but it is reality. The initiative includes over one-third of the countries in the world in one way or another.⁶ Various trade agreements have been signed affecting, or are a result of, the diplomatic relations of the signees. Additionally, due to the financial crisis of 2008 and the more recent refugee crisis, countries around the world, and especially in Europe, are experiencing political changes.

These events, as well as other factors, are crucial context of the establishment of OBOR. Trading is versatile and constantly changing, thus alternative networks must always be considered. Bearing that in mind, the possible routes and their political and financial consequences need assessment, both by Chinese planners, and by those who wish to study OBOR from afar.

OBOR has three alternative routes: the maritime, the south land, and the north land. Each of them includes different countries and of course, contains its own advantages and disadvantages. One of the countries that is a candidate for inclusion in more than one of the routes due to its geographical location is Greece.

Greece, similar to China, has a long line of history. However, for the purpose of this thesis only certain threads of its modern, post-Ottoman history are discussed in detail. An overview of its political and financial instabilities is crucial in order to comprehend the country’s recent financial and social crisis. Greece’s modern identity is an outcome of a very bloody civil war, a dictatorship, and very bad fund management. Social phenomena, such as the brain drain, are Greece’s contemporary reality because of the lack of opportunities for the new generation and the struggling of the older one. At the same time, high taxation and various other policies have discouraged foreign investments.

One of the Greek industries that have always been strong and mostly dependent on international resources has been the shipping industry. Thus, the port of Piraeus has historically been a center for trading and tourism. It is not a coincidence that Piraeus port is such a big part of the OBOR initiative. Having been destroyed and rebuilt various times, it has managed to become one of the busiest and most efficient European ports. Its historical importance and geopolitical significance would likely be less if Greece had not traditionally been a shipping country.

Greeks have been in the center of the maritime industry since the early 1820s and remain in that role today. Over the years, Greek maritime centers have shifted, but the Chiot and the Ionian families have always been key to the evolution of the industry. Greek shipowners realized that vessels are assets and thus traded them as they saw appropriate and had no emotional attachment. Moreover, due to WWI and WWII, the shipping industry experienced major changes and reshuffling. Finally, the Greek state in its recent history has tried to attract and benefit shipowners. Although many are based in Piraeus, they still remain independent from the country’s domestic financial reality.

However, they are not able, especially if their vessels operate in Greece, to remain independent to Piraeus port and its change of management. The change of any administration creates obstacles to continued smooth operation, but the involvement of a foreign entity creates additional uncertainty and a fear of the unknown. Fortunately, the privatization of the Piraeus port was somewhat smooth and definitely necessary.

This project, of course, did not happen overnight. Various discussions took place on an international level and domestically until all parties came to an agreement. The deal and change at Piraeus between Greece and China affect more than the politicians and the shipowners, and it affects everyone involved in the port’s operations as well as the residents of the area. To further comprehend the impact on their lives, one must see things through their eyes, and there is no better way than contacting individuals and conversing with them.

Finally, as do all changes or development projects, both the Piraeus port and the OBOR initiative have consequences on domestic and international levels. Such consequences affect both port and initiative in financial and environmental aspects, of which neither can be ignored. In conclusion, the specific deal at Piraeus and the OBOR initiative as a whole have the potential of benefiting the international and local communities. However, specific measures must be taken and governments must collaborate in order for the deal in Piraeus and the OBOR initiative to have the most beneficial and the least negative impact.

NOTES

1 The idea of a “Fourth Industrial Revolution” is currently being used and may or may not remain accurate in the future. The first time the term “fourth industrial revolution” was used was in 2015 in an article written by Klaus Schwab, the executive chairman of the World Economic Forum.

2 Wen, Yi. “China’s Rise from Agrarian Society to Industrial Power | St. Louis Fed.” Federal Reserve Bank of St. Louis | Economic Data, Monetary Rates, Economic Education. Last modified April 12, 2016. www.stlouisfed.org/publications/regional-economist/april-2016/chinas-rapid-rise-from-backward-agrarian-society-to-industrial-powerhouse-in-just-35-years.

3 Press, Gil. “A Very Short History of Digitization.” Forbes. Last modified January 11, 2016. www.forbes.com/sites/gilpress/2015/12/27/a-very-short-history-of-digitization/#7e1a148649ac.

4 Schwab, Klaus. “The Fourth Industrial Revolution: What It Means and How to Respond.” World Economic Forum. Last modified November 21, 2019. www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/.

5 “Bush Calls for Universal Broadband by 2007.” Msnbc.com. Last modified March 26, 2004. www.nbcnews.com/id/4609864/ns/technology_and_science-tech_and_gadgets/t/bush-calls-universal-broadband/#.XdLsyDJKi_s.

6 Afghanistan, Albania, Armenia, Austria, Azerbaijan, Bangladesh, Belarus, Bosnia and Herzegovina, Brunei, Cambodia, Chile, Croatia, Cyprus, Czech Republic, Djibouti, Egypt, Estonia, Ethiopia, Georgia, Greece, Hungary, Indonesia, Italy, Kazakh-stan, Kenya, Kyrgyzstan, Latvia, Laos, Lithuania, Malaysia, Mongolia, Moldova, Mozambique, Myanmar, Nepal, Oman, Pakistan, Papua, New Guinea, The Philippines, Poland, Portugal, Russia, Saudi Arabia, Serbia, Singapore, Sri Lanka, Switzerland, Tajikistan, Thailand, The United Arab Emirates, Turkey, Ukraine, Uzbekistan, Vietnam. Other South American, Caribbean, European, and African countries are also involved but not as much as the aforementioned countries.

Chapter 2
China’s Historical Overview

China is the world’s third largest country in area and has the largest population in the world. Politically and economically, China today is a result of cumulative regime changes. Some regimes expanded the country’s borders and external influence. On the other hand, weak regimes decreased China’s geopolitical power and caused domestic division. This pattern of expansion and contraction is readily evident from the historical record, beginning with China’s first known dynasty and continuing through to today. Based on this record, this thesis divides Chinese history into three eras as follows: (1) emperor rule; (2) the transition from emperors to governors; and (3) modern China as a Republic.

The Shang Dynasty established the first known, organized, Chinese state. According to Liu Xin’s calculations, the Shang Dynasty ruled from 1766 BC to 1122 BC.¹ However, according to the Bamboo Annals,² the Shang Dynasty was in power from 1556 BC to 1046 BC. The Shang Dynasty is believed to have united a large part of North-Central China. It is believed that the last Shang King committed suicide after his defeat by Wu of Zhou. The Zhou Dynasty lasted almost 800 years, making it the longest lasting dynasty in Chinese history. The Zhou Dynasty period is divided into two sections. The first ranges from 1045 BC to 770 BC, during which the Dynasty initially prevailed in Northern China and then occupied and united large parts of the country. The second ranges from 770 BC to 256 BC, known as the Eastern Zhou. During this second period, the Dynasty’s political power collapsed and the authority became decentralized as many villages and towns developed their own local rulers. The inability of the Zhou monarchs to unite their kingdom led to instability and wars between the various, self-pr...