Billions of dollars of Chinese money are boosting various European economies, but some of the deals being struck have a catch. Critics say they are “debt traps,” in which China gets to choose what happens if loans are not paid back.
China insists it is a reliable investment partner, but also faces accusations of labor exploitation and environmental damage.
It’s one of those CCTV moments where disaster is about to strike. A port worker in the large Greek port of Piraeus, near Athens, can be seen strolling along the quay next to a huge stack of containers.
Suddenly, he looks up and sees one of them plummeting towards him, closely followed by another. The longshoreman runs off and narrowly escapes being crushed by the two huge boxes, which instead hit an empty truck hard.
Last year, another worker from Piraeus was not so lucky. Dimitris Dagklis, 45, did not escape and was killed in a crane accident.
“His death was the result of the intensification of our work and that there were not enough security measures,” laments Markos Bekris, president of the port’s longshoremen’s union.
Since Dagklis’s death, unions have gone on strike over downsizing at the port, which is two-thirds owned by China’s state-owned Cosco.
Across Europe, as governments fret over Russia’s invasion of Ukraine after the pandemic, Beijing is on the move, expanding its portfolioamanaging European ports and mines, building roads and bridges, investing where others won’t.
But countries have to weigh the rewards and risks of signing deals with China. Many governments are increasingly wary of so-called “debt traps,” in which lenders, such as the Chinese state, can extract economic or political concessions if the country receiving the investment is unable to pay.
The cost of reactivation
There are also claims of workers who say they are exploited by Chinese companies, in terms of wages, conditions and staffing levels.
We asked Cosco about the death of Dimitris Dagklis, staffing levels in Piraeus, and environmental concerns about the port expansion. The company said that he wouldn’t give us an interview and that he couldn’t help more.
Bekris does not solely blame Beijing for contributing to what he says has been an erosion of labor rights. He argues that the post-global financial crisis capitalist system would have allowed any foreign company to come in and maximize profits at the expense of workers.
There is no doubt that investment from Beijing has fueled a renaissance in the port since the Greek government was forced to sell it, along with other public assets, in the wake of the economic crisis that hit so hard in 2008.
As we cruise along the coast in a small motorboat, we soon find a queue of huge container-laden cargo ships lining the horizon waiting for berths: a giant watery parking lot, filled with hundreds of thousands of tons of products, mostly made in China, soon to be distributed to all corners of Europe.
The boom in Piraeus, including job opportunities for locals, reflects a broader transformation in Greece’s financial fortunes. It is now one of the fastest growing economies in the EU.
But like all its European neighbors, Greece is also struggling to cope with the impact, economic and otherwise, of the Ukraine war. Nations are reevaluating what it means to do business with Beijingwhich in February declared a new global order, together with its ally Moscow.
On the opening day of its own Winter Olympics, China declared an “unlimited” partnership with Russia and vowed to collaborate further against the West. Since then, China has steadfastly refused to condemn President Putin’s attack on Ukraine.
In Piraeus, the alleged environmental damage caused by the expansion of the port has caused legal actions by the local population against the Chinese owners, Cosco. There are particular concerns about uncontrolled seabed dredging and toxic pollution, as well as increased traffic both by sea and by land.
Lawyer Anthi Giannoulou, who played on the rocky shoreline as a child, fears for the long-term future of her community.
“It will not benefit Piraeus. It will benefit other people who don’t live here.
“Piraeus is a really small city and the people who still live here have done so for many generations. Therefore, we cannot be kicked out for some investment without being asked about it,” he said.
When China is the only investor
In the marble hall of a government building in central Athens, we are greeted by Greek Foreign Minister Nikos Dendias. He explains that the investment in Piraeus has been mutually beneficial and recalls that China was the only investor to come forward when the Greek government was forced to sell the port.
“In our economic relations, I think both parties benefit. China has an entry point for its products to the European Union, the Balkans, and Central and Eastern Europe. And we have updated a large commercial port”, he points out.
After the 2008 crisis, the so-called “European troika” of the European Commission, the European Central Bank and the International Monetary Fund stood firm on the sale of the port to help pay off Greece’s mounting debts.
“The truth is that China took over Piraeus and now it is one of the biggest ports in Europe and, if what they say is true, and I have no reason to doubt it, probably will it be number one or number two in all Europe. So that’s a huge improvement and the investment is substantial,” he notes.
But what about the possible “debt traps” that could arise with any future Chinese investment in Greece? Is the port of Piraeus the high point of relations between Athens and Beijing? The minister admits that his government has not signed any more major agreements, but suggests that he will assess future opportunities on a case-by-case basis.
“Do not [hay] no more substantial Chinese investment in Greece, but we judge the investment in commercial terms. I mean, if the Chinese want to invest, we are a free country and a free economy,” he noted.
“They treat us like slaves”
Greece is not the only part of Europe where Beijing’s billions are being invested.
Standing on a hill overlooking the Serbian city of Bor, one would think that they had been transported to a Chinese province. Workers they shout instructions in mandarinthe flags are red and the administrative offices look like temples.
China is pouring money into the copper mine that has defined this place for decades. Mining for the metal has turned the water in some nearby lakes and reservoirs a rusty hue.
It is also a metaphor for how the red of the Chinese Communist Party is making its mark on this continent.
In Europe, but outside the EU, Serbia does not have the same level of workers’ rights that you would expect to find in Dublin, Madrid or Vienna.
This became apparent when we met a 35-year-old Vietnamese man in the shadows of an abandoned building in the town of Zrenjanin, north of the capital Belgrade.
“The Chinese company treats us horribly. they don’t respect us“, the man, father of three children, told us in a low voice.
Dung, who is not his real name, said he had been paid the equivalent of $1,500 to come to Serbia to work on the construction of the Ling Long tire factory. But that he had soon repented.
“They forced us to work harder, but they didn’t provide enough supplies. When I first came here, I was getting twice as much food,” she lamented.
Dung explained that the approximately 400 Vietnamese workers recruited were paid less than Chinese employees at the same site.
“There are 20 or 30 workers living together in each container. They treat us like slaves.”he claimed.
He tried to quit his job after five months, but says his employer told him there was no chance of getting a flight back to Vietnam. He was stranded thousands of miles from his home.
We have since learned that Dung managed to return to his family, but only after obtaining a $1,875 loan to do so.
It’s not just the poor conditions that alarm some charities, but also the contracts workers are being asked to sign.
The employment documents that we saw in Serbia, a country that aspires to join the EU, they appear to have been copied and pasted of those used for foreign workers in Middle Eastern countries that have the death penalty.
The Serbian NGOs, who were the first to tell us about the conditions at the Ling Long tire factory, say they were shocked when they realized what was happening there.
“It is the most visible case of human trafficking and labor exploitation that we have had in the country so far”says Danilo Curcic of the NGO A 11 Initiative. He adds that what happened at the factory serves as a warning to the rest of Europe as Chinese companies expand across the continent.
“If you have Chinese companies that come to other countries and you don’t have institutions that are strong enough to prevent human rights violations or violations of labor standards, probably you will have a downward competition [en las condiciones laborales] with other companies,” he said.
The Ling Long factory did not respond to the accusations made by Dung and others, but local media in Serbia reported that the company said it was committed to high standards of worker welfare.
The Serbian government says investment from China has fueled its economic growth, and President Aleksandar Vucic has argued that a small number of Vietnamese workers should not jeopardize more Chinese investment.
These alleged violations of human rights in Europe by China echo the treatment Uyghur Muslims receive at home in Xinjiang province.
Traps and debts
But there are also other reasons for caution.
Richard Moore, head of the UK’s MI6 foreign espionage agency, warned not only about China’s debt traps, but also “data traps.” And he told the BBC last year that China had the ability to “collect data from all over the world” and used money to “compromise people”.
China rejects such accusations.
But, in the UK, Chinese telecoms giant Huawei has been excluded from Britain’s 5G infrastructure. The company also faces ongoing scrutiny over its security practices and possible ties to the Chinese government, something the company denies.
The United States has imposed sanctions on the company.
Back in Belgrade, we see some of the 8,000 security cameras that have been installed on the streets. Human rights groups are concerned that Huawei’s biometric technology could be used with these devices, but the Serbian government says facial recognition capabilities won’t be introduced any time soon.
As for China’s debt traps, Beijing’s critics point to another big project in Europe that, like Serbia, is just outside the orbit of EU rules and regulations: in Montenegrin.
Driving on the only highway in that country is a surreal experience. We have the trail to ourselves apart from a flock of sheep wandering around.
The long-held idea of building such a fast track was to boost trade in this Balkan country, linking the Adriatic Sea port of Bar in the south with the Serbian border in the north. But successive European feasibility studies concluded that it would be too complex and too expensive.
So Chino stepped up with $1 billion. It is not a gift for Montenegro, but a loan that must be repaid.
However, six years after construction work began, only about 41 km have been built, making it one of the most expensive highways in the world.
After crossing bridges and tunnels dug in the field in the section that has been built, we literally reached the end of the road. The project has been plagued by accusations of corruption and bribery, and is already two years behind schedule.. Some wonder if it will ever end.
The terms of the agreement with China state that if Montenegro defaults on the loan installments, any decision on the damages owed will be made in Beijing. China could seize other assets, including potentially the port of Bar.
One Montenegrin government minister who inherited this poisoned chalice is 34-year-old Milojko “Mickey” Spajić. He seemed remarkably bright and unconcerned as we met over Zoom and explained how he had devised and secured a payment deal so the highway would never bankrupt his country.
For him, Montenegro’s position is emblematic of many smaller countries seeking financing to start infrastructure projects and boost their economies.
“We need investments. If the Chinese are the only ones interested in investing, I say ‘go ahead’but you just have to be careful with the terms of these investments, their conditions and make sure that everything is in line with your general policies”, he pointed out.
However, last week, Spajić lost his job when a new minority government was formed. Building the rest of the highway – and paying off China’s debt – will now be a problem for his successor.
Despite all the criticism leveled at China, there is a project that some present as example of good construction practices and effective cooperation between East and West. It is right on the Adriatic coast near Montenegro: in Croatia.
Although it is Sunday when we visit, work on the Pelješac Bridge is in full swing, with trucks rolling over it and beams being unloaded and drilled into place.
This is the largest infrastructure project in Croatia and will link the Pelješac peninsula with mainland Croatia. Currently, to reach the mainland, Croats from the peninsula have to pass through a stretch of coast belonging to neighboring Bosnia.
Most of the bill for the new bridge has been paid by the EU (Croatia is a member), but it is built by Beijing. down to the last screw. The army of workers who paint, sweep and asphalt are all Chinese.
However, this project is not without controversy.
The offer of the Chinese state company The China Road and Bridge Corporation it was 20% cheaper than its closest competitor. European rivals denounced cheating but were unable to stop the deal.
For Branimir Vidmarovic, a professor at the University of Pula in Croatia, the Pelješac Bridge is an illustration of where European countries can find a balance between East and West without distancing themselves from the US, the world’s largest market.
“If we exclude critical technologiesIf we cooperate on physical things like railways, infrastructure projects, I don’t think there will be any problem in satisfying both the EU, NATO, the US and China,” he says.
But the Biden White House, which inherited a trade war with China from the Trump administration, has not softened its position on Beijing in many areas and has called on Europe to move away from Chinese funding and favors.
We were hoping to speak with a current senior Chinese diplomat to learn more about Beijing’s thinking behind its expansion into Europe. But none of the five Chinese ambassadors we approached was available.
Whether within the EU, like Greece and Croatia, or on its periphery, like Serbia and Montenegro, European nations will have to weigh the pros and cons of making deals with China on a case-by-case basis.
The fact that President Xi Jinping’s declared best friend is Vladimir Putin, the man who has plunged Europe into its biggest security crisis since World War II, is a factor that will overshadow every decision that is made.
additional reporting of Kostas Kallergis.
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Source-laopinion.com