China could potentially be an international lender of last resort for Greece as voters rejected the terms of a bailout in Sunday’s referendum, according to the U.S.-based Foreign Policy magazine.
Results of the Greek referendum showed 61.3 percent voted for “no” against those who opted to vote “yes,” thereby making Greece the first developed country in history to default on a loan from the International Monetary Fund (IMF).
The outcome has only fuelled fears of a Greek exit from the Eurozone and observers are looking whether China will be able to extend its help.
Many benefits could persuade China to intervene according to Foreign Policy.
With a relatively slow Chinese economy and instability in stock markets, such factors could make way for a bailout from Beijing. Europe is China's largest trading partner and the value of the economic interaction between the two is equivalent to $51 billion (46 billion euros).
Another possible reason for a Chinese bailout is the Port of Pireaus, which is the largest in Greece.
According to a report by the Want China Times, Athens has considered the port to be for sale, while Cosco, a Chinese logistics company, is intending to obtain a majority stake.
Both countries have signed a $5-billion cooperation deal last year.
Furthermore, the Chinese "Belt and Road" initiative, which seeks to boost economic cooperation in countries throughout the Eurasian landmass, could greatly benefit from a Chinese intervention.
China has expressed interest in transforming Greece as a European base for the initiative.
If it pushes through, this potential bailout would not be the first time China extended its resources to countries burdened with low ratings.
Last year, China offered $22 billion to Latin America as a loan which trumps the World Bank and Inter-American Development Bank combined.
In addition, Beijing has also given loan opportunities totalling over $25 billion to economically unstable nations such as Argentina, Venezuela and Russia.