February 16, 2013

China lands in Greece

Le Monde diplomatique

The Chinese takeover of two-thirds of the port of Piraeus, which predates the Greek debt crisis, delights the Greek ship owners, and the European Commission. It's a miserable augury of the future.

by Pierre Rimbert

Britain used gunboats to gain access to Chinese ports in the 1840s, since China had closed Canton, in part to block the British-run opium trade. After the first opium war, British warships forced the Emperor Daoguang to sign the Treaty of Nanking on 29 August 1842, under which five ports were opened and Hong Kong ceded to the British crown. After a second opium war (1856-1860), the opium trade was legalised and Chinese sovereignty further eroded. The agreements that concluded these wars are still known as "unequal treaties".

"Cosco go home!" was the slogan on banners carried by Greek dockers from Piraeus on 28 November 2008, when they marched through Athens in protest against a contract that gave China's biggest ship owner, the state-run China Ocean Shipping Company (Cosco), partial control of Greece's largest port. The agreement, signed in the presence of Chinese president Hu Jintao, granted Cosco a 35-year lease on two of the port's three container piers. Cosco undertook to modernise the terminals and make annual payments that will total €832m ($1.1bn) to the state-run Piraeus Port Authority, which retains control of one terminal.

The Greek parliament, then dominated by the rightwing New Democracy, ratified the Cosco agreement at the height of the global financial crisis in March 2009, granting the Chinese company tax reductions and social security exemptions. These measures "raised some eyebrows, particularly since OLP [the Piraeus port authority which still runs terminal no 1] itself was not subject to these provisions. One could therefore wonder if competition between the two entities would be fair" (1). In less diplomatic language, the port employees accused the government of granting Cosco "colonial-style tax exemptions" ("Piraeus Faces Dock Strikes", The Journal of Commerce, 18 February 2009).

Though Chinese investors have proved less disruptive than English gunboats, China's arrival in Europe is a historical turnaround, a fact not lost on trade unionists. Piraeus, on the Asia-Europe maritime highway and near the Suez Canal, the route taken by giant container ships, is strategically important to transport infrastructure: it gives Chinese products a new entry point into Europe and offers an ideal transhipment hub for Asian goods bound for Turkey and other Black Sea nations. Since Cosco's arrival, Piraeus has also become a laboratory for social experimentation.

The Cosco terminal, operational since 2010, has charmed the press with its productivity as well as the personality of its media-friendly managing director, Fu Cheng Qiu. Having handled a million containers in 2011, the company has overtaken pre-crisis output levels and, when the second pier becomes operational, volumes should more than triple between 2013 and 2015. Achieving such productivity requires a constant battle against the workers' vices that Fu believes are the result of corruption by the welfare state: "They wanted a good life, more holidays and less work" ("Under Chinese, a Greek Port Thrives", The New York Times, 10 October 2012).

Cosco is accused of replacing unionised dockers by workers without job security and paid half as much, disregard for collective agreements, pension cuts, lack of professional training, shorter breaks, dismissal of workers who complain about lack of job security, reduction of gantry-crane crews from nine to four people, and demands for unpaid overtime. The Cosco terminal now operates with 270 permanent workers, seven of whom are Chinese, plus a temporary workforce of several hundred, many of whom are poorly trained and recruited by a subcontractor who gives just a few hours' notice via text message of the day's labour requirements. As for unions... "Let's not talk about them," said Fu. "It's best not to venture into that territory ... our employees are happy" (2).

The state-owned terminal and its 1,300 regular employees, just a few metres away, face competition from this outpost of social modernity. Their immediate juxtaposition offers an observation point for the effects of domestic delocalisation: why relocate industries to Asia when you can import their practices?

It would be wrong to believe that China has imposed its will on a reluctant Europe. In Piraeus, the Cosco management has not gone far beyond the ambitions of the two major players in the Greek political drama: the powerful ship-owning lobby and the troika (the European Commission, European Central Bank and IMF). "The arrival of China with its social model suits the Greek government perfectly, and that in turn suits the troika perfectly," said Tony Hautbois, secretary general of the National Federation of Ports and Docks (part of France's CGT union federation). "It's the troika that is insisting that Athens privatises and attracts Chinese industrialists." In 2003 and 2005 two planned liberalisations of port activities intended to bypass the dockers were postponed by the European Parliament after large-scale protests. Commission vice-president and commissioner for transport, Siim Kallas, who is against "restrictive labour regulations and non-competitive regimes" (3), is preparing a third package of measures for ports. In Portugal, a port law passed in 2012 under pressure from the troika grants his wish by removing some dockers' rights.

Captain Fu has formed another useful alliance — with the Greek ship owners, masters of the world's biggest commercial fleet and specialists in the transport of minerals and petroleum. They share some common interests with the Chinese. Their ships supply the Chinese industrial machine with raw materials and energy, while the shipyards at Dalian, Shanghai and Guangzhou build more and more Greek ships. Stimulated by China's growth, Greek ship owners' profit margins soon recovered after the crisis. When the Greek government asked it to support the local economy, the ship-owning oligarchy found in the Commission and Captain Fu solid supporters for its deregulation plans. As TheWall Street Journal noted with enthusiasm on 7 December 2012, "Persuading the shipping magnates to invest in other Greek enterprises — in hotels, ports or energy — will require assuring them that the domestic market will be transformed into the kind of place they thrive: open to competition and free of strangling regulation." Cosco is on the case. While Athens, urged on by the troika, prepares to privatise the rest of the port, it's worth remembering that the opium wars and their unequal treaties provoked the Taiping rebellion in China (1861-64), a powerful popular uprising with egalitarian ambitions.

  
(1) Harilaos N Psaraftis and Athanasios A Pallis, "Concession of the Piraeus container terminal: turbulent times and the quest for competitiveness", Maritime Policy & Management, vol 39, no 1, February 2012.

(2) Magali Serre, Quand la Chine délocalise en Europe, Arte France, 2012.

(3) Conference on policy on European ports, Brussels, 25 September 2012.

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