UPDATE 1-Greece seeks role as China's gateway to Europe

Fri Jun 20, 2014 12:46pm EDT

* Chinese PM in Greece to strengthen ties

* Greece seeks Chinese investment in ports, roads, privatisations (Adds joint statement)

By Renee Maltezou

ATHENS, June 20 (Reuters) - China wants to invest in Greece's airports, railways and its busiest port, the two countries said on Friday, as the country where the euro debt crisis began seeks a role as China's gateway into Europe.

Chinese Premier Li Keqiang is on a three-day trip to Greece to strengthen economic ties between the nations, who have drawn closer since China's Cosco Pacific won a 35-year concession in 2009 to upgrade and run two container cargo piers at the Piraeus port.

Greece, which relies on bailout loans from the European Union and the International Monetary Fund, desperately needs foreign investment to spur growth and create jobs as it struggles to exit a six-year recession.

China - which has already submitted a bid to buy a majority stake in Piraeus - is also eyeing the construction of an 800 million-euro airport in Crete and the main airport in Athens when the government puts it on sale later this year, Greek officials said. Development Minister Nikos Dendias said the two sides also discussed a high-speed rail project.

"China attaches great importance to Greece's unique geographic advantage of being a gateway to Europe and, in that light, is prepared to intensify its cooperation with Greece in basic infrastructure such as ports, roads, (and) railways," the two governments said in a joint statement.

Both sides have sought to play up Greece's strategic location at the crossroads of Europe, Asia and Africa, saying the country could become a hub for channelling goods from the world's second-largest economy and top exporter into Europe.

"Greece, apart from a sea trade gateway, can also become a transit hub for air transport," Greek Prime Minister Antonis Samaras said. "Ports but also airports, such as the Athens International Airport and the International Airport in Heraklion in Kasteli, are the object of Chinese interest."

"Piraeus port can become a gateway of China to Europe," Li said during a visit to Cosco's facilities at Piraeus.

Li, who on Thursday promised Greeks his country would remain a "long-term investor" in Greek bonds, on Friday said China would encourage its businesses to cooperate with Greek companies that repair ships.

Greece has the largest shipping fleet in the world, and Greek shipowners transport about 60 percent of China's imported oil and more than half its exported goods, Greek Shipping Minister Militiadis Varvitsiotis said.

China has been steadily ratcheting up its interest in Greek assets in recent years.

Cosco Pacific has said it wants to turn Piraeus into a regional hub and sought to expand port facilities and construct an oil refuelling jetty, a 230 million-euro ($314 million) investment which needs to be approved by the European Commission.

Cosco has also expressed interest in acquiring a 67 percent stake in the port.

Chinese grid operator China State Grid Corp (SGCC) is among five suitors bidding for a controlling stake in Greek power grid operator ADMIE. Chinese conglomerate Fosun is part of a consortium developing the former Athens airport complex called Hellenikon - Greece's biggest privatisation project, budgeted at 7 billion euros.

"Greece welcomes the interest by Chinese businesses to take part in the Greek government's privatisation programme and declares its intention to provide the necessary facilitations and every support," the joint statement read.

This is the second time a Chinese premier has visited Greece since Athens acknowledged in 2009 that its finances were in deep trouble.

"The affair between the two economies started in 2004-2008. In 2010 the appetite for trade cooperation was official and now, in 2014, we see that there is a strong will to make it deeper," George Xyradakis, an adviser to the China Development Bank in Greece, told Reuters. (Editing by Deepa Babington, Larry King)