Chinese Investment in the Port of Piraeus

Introduction

Chinese investment in European strategic infrastructure has become a point of contention, particularly when the pursuit of economic benefits intersects with questions of strategic autonomy and foreign political influence. The Port of Piraeus in Greece has become a prominent example in this debate. Since the entry of the state-owned China Ocean Shipping Company (COSCO), the port has been integrated into China’s Belt and Road Initiative (BRI). During a 2019 visit, Xi Jinping referred to Piraeus as the 'head of the dragon' of the BRI, signalling its perceived strategic importance within  China’s European connectivity strategy. These developments have not gone unnoticed, and in December 2025, the U.S. Ambassador to Greece, Kimberly Guilfoyle, suggested that China could be encouraged to divest parts of its stake. The U.S. has pledged to invest in the port of Elefsina, a port approximately 20 kilometres northwest of Piraeus, which is widely interpreted as an effort to counterbalance Chinese influence in the region.

This article examines the economic and political consequences of Chinese investment in the Piraeus Port Authority (PPA), focusing on the benefits, drawbacks, and broader strategic implications for Greece and the European Union. By situating developments at Piraeus alongside Europe’s policy responses, it shows how investments in critical infrastructure can generate local economic benefits while simultaneously giving rise to strategic and geopolitical risks in Europe’s relationship with China.

The Port of Piraeus

The Port of Piraeus had been a state-run enterprise until 1999, after which the PPA became a publicly traded company, with the state remaining the majority stakeholder. In an effort to increase competitiveness, the Greek government initiated further liberalisation of the port in 2006. Following a period of negotiation and competitive bidding, the Greek authorities concluded a concession agreement with COSCO in 2008. The agreement granted COSCO the right to operate Pier II and to build and operate a new Pier III, while Pier I remained under the control of the PPA. It involved a total investment of 4.3 billion EUR, with operations commencing in 2009. 

As ports play a central role in managing the inflow and outflow of traded goods, COSCO’s position at the Port of Piraeus must be understood within the broader context of EU–China trade relations. COSCO, a Chinese state-owned international shipping company, ranks as the world’s fourth-largest shipping firm. China is the EU’s largest trading partner overall, its leading source of imports, and its third largest export destination. In this context, COSCO’s presence at a major European port places it in a position to influence the organisation of inbound and outbound container traffic at Piraeus.

The timing of the deal coincided closely with the onset of the Eurozone crisis and its aftermath. As Greece entered a period of severe financial distress, a Troika composed of the European Commission, the European Central Bank, and the International Monetary Fund pushed for market-driven privatisations as part of its crisis management strategy. This approach significantly constrained alternative financing options, creating a policy dilemma for Athens. Within this policy environment, Chinese actors increasingly emerged as buyers of strategically important national assets. Chinese planners capitalised on these circumstances by acquiring critical infrastructure such as ports, energy networks, and transport systems at favourable prices, later integrating them into the BRI’s broader connectivity framework. In the case of Piraeus, the port’s connection to the railway network in 2013 proved particularly significant, accelerating its transformation into a key transit hub and logistics centre for the expanding Asia–Europe trade. 

Under the conditions attached to the Troika’s bailout programmes, the Greek government was left with little choice but to pursue further privatisation of the port. When it launched an international tender to sell 67% of the PPA, COSCO was the only company to submit a bid. The company benefited from particularly favourable terms, as the original agreement was revised twice during the financial crisis to safeguard COSCO’s profitability. In 2016, it consequently won the tender and acquired an initial 51% stake in the PPA for 280.5 million EUR. Greece formally joined the BRI in 2018, after which COSCO finalised the acquisition of the remaining 16% stake for 88 million EUR in 2021, subject to further mandatory investment commitments. Although the Greek government retained a seat on the board of directors, COSCO thus became the majority shareholder of the PPA, moving beyond its previous role as a concession holder.

Economic Effects for Greece and the Region

Chinese investments have significantly transformed the Port of Piraeus. It moved from outside the top 15 European harbours in 2007 in terms of container traffic volume, measured in twenty-foot equivalent units, to fourth place by 2019. Over this period, volume increased by 271.4%, compared to 57.9% of the second largest grower, Valencia. Moreover, the materials used for the port’s expansion came largely from China, reducing the need for European states to allocate public resources to the project. The expansion also generated approximately 1,000 local jobs and relied extensively on cooperation with local managers and subcontractors, while management involved only a small number of Chinese executives.

Following the Chinese investment and cooperation with local businesses, several reports have suggested that Chinese management of Piraeus has produced positive spillover effects for the Greek economy, including substantial tax revenues for both local and national authorities. If these benefits are sustained over time, continued cooperation with COSCO could serve Greece’s long-term economic interests.

However, evidence also points to significant limitations. Most of the local jobs fall directly under the authority of COSCO and are based on short-term contracts, resulting in limited job security. These workers also earn less than unionised dock workers, who are employed at terminals operated by other entities. Research has further indicated that productivity gains at the port have not translated into higher wages, improved working conditions, or greater employment stability. Consistent with this, a 2021 Council on Foreign Relations report found that the broader spillover effects of Chinese investment in Piraeus remain limited. Beyond the local level, the port’s rapid expansion has also adversely affected other transshipment hubs in the south-eastern Mediterranean, reducing their role and contributing to revenue losses. 

Overall, the evidence suggests that while the port has experienced rapid development under Chinese investment and management, it has also produced notable local and regional drawbacks. These outcomes raise broader questions about the strategic logic that determines China’s investment in Piraeus.

China’s Strategy

Chinese investment in the Port of Piraeus is situated within a broader strategic approach that combines political influence with long-term economic objectives. First, it can be argued that China uses economic engagement as a form of leverage, thereby transforming it into soft power. In Piraeus, Chinese investment has coincided with a shift in Greece’s positions on China-related issues within EU decision-making. For instance, in 2016, Greece ensured that explicit references to Beijing were removed from an EU statement endorsing a United Nations Convention on the Law of the Sea arbitral ruling that found China’s claims in the South China Sea to lack a legal basis. Furthermore, in 2017, Athens blocked the adoption of an EU statement on China at the United Nations Human Rights Council, which addressed concerns over human rights violations, and subsequently opposed the introduction of an EU-wide investment screening framework proposed in 2017 in response to Chinese acquisitions of strategic infrastructure in Europe.

Greece’s actions drew criticism at the EU level. In 2019, Jean Claude Juncker, then President of the European Commission, remarked that 'one country is not able to condemn Chinese human rights violations because Chinese investors are involved in one of their ports', adding that 'it can’t work like this'. The use of economic commitments as a form of soft power becomes apparent when examining the consequences faced by states that diverge from Beijing’s preferences. Lithuania had been a participant in the Cooperation between China and Central and Eastern European Countries (China–CEEC) framework, a China-initiated platform aimed at promoting trade, investment, and infrastructure cooperation since its inception in 2012. In May 2021, it became the first country to withdraw from it, mentioning its limited economic benefits and growing concerns that it risked fragmenting intra-EU solidarity. Lithuania instead advocated an EU-wide approach to relations with China. Beijing responded by restricting Lithuanian exports to China and by halting negotiations on new import and export contracts. As a result, Chinese customs data for November 2021 showed that the value of shipments from Lithuania had fallen by around 90% compared with the previous year. Many trade disruptions were informal, taking the form of supply interruptions and other trade barriers that China consistently denied. Taken together, such developments suggest that by establishing bilateral economic ties, China has been able to exert influence over EU decision-making at the member state level.

A second strategic prong of China’s involvement in Piraeus reflects the role of overseas infrastructure investment within China’s economic growth strategy. As China emerged as the world’s factory in the early 2000s, it accumulated substantial cash reserves alongside production capacities that structurally exceeded domestic demand. To manage these imbalances and sustain industrial output, China increasingly invested surplus capital abroad, including in strategic infrastructure such as ports. Viewed in this light, investments such as Piraeus function not only as geopolitical initiatives but also as instruments that support domestic economic stability and expand China’s market reach internationally. This dynamic raises concerns about competitive fairness, however, as Chinese state-owned enterprises can outcompete private firms that operate without having comparable state backing. The Port of Piraeus thus emerged as a strategic asset within China’s broader economic and political strategy.

European Response

Investments by state-owned enterprises such as COSCO may conflict with European legal frameworks and risk creating dependencies that undermine EU cohesion. While China benefits from Europe’s open markets, it often restricts reciprocal market access. China’s ownership stakes in more than twenty European ports raise concerns about its potential influence over intra-European trade flows. This dynamic is illustrated by a 2024 study, which found that after COSCO assumed management control, Chinese exports to Greece effectively displaced imports from other European trading partners. Whereas Chinese imports had complemented Greek imports from other countries prior to 2016, they became substitutes thereafter. These findings indicate that Greece’s European trading partners may increasingly be displaced as Chinese imports gain prominence.

The risks associated with foreign ownership of strategic infrastructure are not limited to China, however. The Port of Thessaloniki, though smaller than Piraeus, is similarly vulnerable. In 2021, Greek–Russian billionaire Ivan Savvidis, who has close links to Vladimir Putin, acquired a majority stake of 72% after having been involved for several years, giving him effective control of the port. With a history of political subterfuge in the Balkan region, his influence raises concerns that Russia could undermine Greek and European strategic autonomy.

In response to all these concerns, the EU initiated the aforementioned investment screening mechanism in 2017. Part of the policy of de-risking, the mechanism was designed to prevent the systematic acquisition of strategic infrastructure by foreign investors and was approved by the European Parliament in February 2019. Consequently, when Chinese investors attempted to create a similar structure of influence in the port of Hamburg in 2022, the endeavour was blocked by the German cabinet. It was agreed that COSCO would be allowed to acquire a maximum 25% stake, rather than the initially proposed 35%, citing threats to public security. The effectiveness of the screening mechanism continues to be debated, though, as it leaves implementation largely to individual member states, thereby limiting the degree to which it can be enforced.

Conclusion

The case of Greece illustrates how the privatisation of strategically important infrastructure without clear governance frameworks to guide the process can increase vulnerability to foreign influence. This is particularly visible in China’s involvement in the Port of Piraeus. While the port’s operational performance has greatly improved since COSCO’s takeover and while Chinese investment has generated substantial employment opportunities, questions persist regarding the distribution of profits and the longer-term implications for Greek, regional, and European economic and security interests. 

Notwithstanding such risks, the case of Piraeus should not be interpreted solely as a cautionary tale about Chinese investment. Rather, it highlights the broader challenge facing Europe in balancing openness to foreign capital with preserving strategic autonomy. De-risking does not mean disengagement, but the capacity to act independently and to safeguard vital interests. In this context, the objective is not to exclude Chinese investment per se, but to establish a sustainable modus vivendi grounded in clear rules, reciprocity, and effective oversight of strategic assets. Achieving such a balance will require stronger and more coherent European frameworks that maintain the benefits of economic cooperation while reducing the risks associated with asymmetric dependencies.

The views expressed in this article belong to the author(s) alone and do not necessarily reflect those of European Guanxi.

ABOUT THE AUTHORS

Lukas Rijntalder is a defence analyst at the Center for the Study of Democracy. He holds a Dual MA in International War Studies and a BA in History & International Studies, with a focus on European foreign and security policy, defence, and strategy. His research has examined geopolitical influence, infrastructure investment, and hybrid strategies in Europe, as well as Russian and Chinese foreign policy. 

Thomas Rijntalder holds an MA in International Relations and War from King’s College London, an MSc in Medicine, and an MA in Philosophy. He served as a public health physician during the pandemic and as a policy advisor at the Dutch Ministry of Health. In 2022, he provided medical care to refugees in Ukraine, an experience that gradually redirected his focus towards geopolitical and military analysis

This article was edited by Camilla Penserini and Daria Bogolyubova.

Featured Image: Panoramic view of the western part of the city and the port of Piraeus (periphery of Attica) in Greece / Creative Commons Attribution-Share Alike 3.0 Germany license  / Free for use / Wikimedia Commons