"We assess that China's rhetoric is likely to exceed its actual support, with China likely to focus on commercial gains and thus to negotiate bilateral deals that essentially result in investment opportunities in return for bond purchases," Shoemaker said in a written reply to AP questions. She cites Greece as an example. As China promised to acquire that country's bonds, state transport giant China Ocean Shipping Co snared a US$1 billion concession deal in 2009 for the country's largest container-terminal port near Athens. That gives COSCO's growing port management business a foothold in Europe and positions it to prosper as Chinese trade with the Balkans and Central Europe grows. China also pledged to help double the trade volume with Greece to nearly €6 billion by 2015.
It's a similar story across Europe, with Chinese pledges of bond purchases coming simultaneously with announcements of major investments in the continent's corporations and infrastructures. Chinese Premier Wen Jiabao and Italian Premier Silvio Berlusconi last year spoke optimistically of doubling bilateral trade to US$100 billion within five years. In one of the deals signed in their presence, Internet service provider Tiscali SpA and Zte, a Chinese maker of telecommunications equipment, made a deal for development of ultra-wideband in Italy.
One of the conditions of China's purchase of Spanish bonds in January 2011, analysts say, was the sale to Sinopec of around US$7 billion worth of Brazilian oil assets held by Spanish energy company Repsol. That deal gave birth to one of Latin America's largest energy companies. On his Portugal trip, the Chinese president signed cooperation agreements which sought to double trade between the two countries within five years. Chinese and Portuguese companies signed deals in areas covering energy production, information technology, telecommunications, tourism, banking, port infrastructure, and agriculture.
AP
