In Greece, an influx of Chinese investment affects economic and political life
Greece offers several residence by investment options, of which the Greece My Residence Golden Visa Programme is by and large the most popular one. Through the Golden Visa Programme, an investor can obtain a residence permit through the acquisition or lease of real estate for at least 250,000 euro. By April 2019, 4,473 persons held a residence permit that was acquired through this real estate-route, while only 12 persons held an investor residence permit that was acquired through any other kind of investment. It is estimated that the Golden Visa Programme has attracted around 250 million euros per year to the Greek real estate market, the majority of which comes from Chinese investors.
More than half of all real estate investors (2493) are of Chinese origin, followed at some distance by the second-largest group of investors from Russia (516). Several media outlets have reported about a Chinese real estate ‘buying binge’ in Athens and along the Greek coastline.
This development fits into a broader picture of an ongoing strengthening of Sino-Greek ties. After the onset of the Greek crisis in 2007, Chinese companies have made a number of strategic investment in Greece. One of these predominant investments was an acquisition of a majority share in the Piraeus Port Authority by the Chinese state-owned firm COSCO, which also acquired a forty-year concession for the management of the harbour’s terminals, which has been valued at a worth of 490 million euro. Multiple other notable investments were made in other sectors, such as the acquisition of a stake in a major Greek power operator by China State Grid International Development or the acquisition of the Hellenikon airport complex by a consortium led by the Chinese conglomerate Fosun. A Carnegie Endowment report found that these developments increased China's soft power in the region, mainly because of a greater Greek reliance on Chinese investment for job creation. Therefore, Greece has developed a strategic interest in maintaining its international relations with China. At two occasions, Greece has blocked proposed European Union statements which could be regarded as criticism of Chinese policy practices, arguing that these statements were “unconstructive criticism of China”.
Although the investments made through the Golden Visa Programme are of an entirely different level, they are nevertheless considered to be influential. Next to transport and logistics, energy, telecommunications and tourism, the Greek real estate market is considered to be one of the country's key sectors for attracting Chinese investment. According to a 2017 report of the Greek Institute of International Economic Relations, the total turnover in this field is “anything but negligible” and the importance of this sector for the Greek economy “cannot be overstated”. The report underlines the interconnectivity between Chinese investors in different sectors, as Chinese corporations and individuals often aim to diversify their investment strategies and tend to cooperate with each other. Therefore, Chinese real estate investment as well as the resulting increased Chinese presence in in the country can potentially have broader effects than previously assumed. The report therefore mentions that foreign investment in real estate is actively promoted and facilitated by the Greek authorities.
In March 2019, Greece has introduced six new RBI options with a minimum investment requirement of 400,000 euro, namely an investment in a company, real estate investment company, shares, government bonds, bank deposits or shares in an alternative investment company. Taking into account the popularity of real estate investment among Chinese high net worth individuals, it remains to be seen how these options will perform. However, if successful, these options could manage to further diversify Chinese investment inflow as well as their outcomes.
Statistical data has been retrieved from http://immigration.gov.gr
Author: Luuk van der Baaren