Greece hopes Wen visit will boost China investment

Published 10/01/2010, 06:44 PM
Updated 10/01/2010, 06:48 PM

* Greece needs investment to help meet terms of bailout

* Officials say visit a vote of confidence in Greece

By Ingrid Melander

ATHENS, Oct 2 (Reuters) - Chinese Premier Wen Jiabao arrives in Greece on Saturday for a two-day visit the country's leaders hope will help boost investment and confidence in the its ailing economy.

Greece needs foreign investment to revive its fortunes and help it fulfil the terms of a 110-billion-euro bailout which rescued it from bankruptcy in May but forced it impose strict austerity measures which deepened its recession.

Wen, starting a tour of European countries, will give a vote of confidence in Greece's economy, Chinese officials said.

Greek officials said no major deals would be concluded but Greece and China would pledge to stimulate investment by signing a memorandum of understanding.

However, private companies will sign about a dozen cooperation deals covering shipping, logistics, construction and tourism, along the lines of another set of accords signed in July, an official close to Investment Minister Harris Pamboukis said..

"We want to build this strategic partnership with China," the official said. "The purpose is not a signature on something big."

Greek government spokesman George Petalotis told reporters on Friday Wen visit was a show of confidence in the Greek economy, pointing out that a few days earlier Athens signed a $5 billion framework deal to attract investment from Qatar.

"All this shows our country is changing course," he said.

All eyes will be on whether Wen and Greek Prime Minister George Papandreou discuss Greek government bonds. China has said it needs to diversify its foreign currency holdings and has bought Spanish government bonds.

Greece, whose economy is supported by the European Union and the International Monetary Fund, aims to return to bond markets next year. In January, it denied media reports it planned to sell up to 25 billion euros to China.

Clinching business deals with countries such as China and Qatar would help boost confidence among Greece's consumers and businesses, economic analysts said.

With the global economic crisis and competition with other Balkan countries increasing, foreign direct investment in Greece fell from 6.9 billion euros in 2006 to 4.5 billion euros in 2009, according to Investment Ministry figures.

Chinese investment represents a small proportion of this, excluding a 35-year concession deal China's Cosco signed in 2008 to turn the port of Piraeus into a regional hub for a guaranteed amount of 3.4 billion euros, according to port authority figures.

Wen will address the Greek parliament on Sunday and leave early on Monday for Brussels where he will attend an EU-China summit before going on to Germany, Italy and Turkey. (Additional reporting by Renee Maltezou; Editing by Andrew Dobbie)

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