Trade relations between China, one of the largest economies in the world, and Cyprus, one of the smallest EU members, have been developing steadily and Ambassador of China to Cyprus H.E. Liu Xinsheng sees great potential and opportunities for further investment between the two countries.
Cyprus has seen increased interest from China over the last two years, establishing the island as an attractive destination for Chinese investment, tourism and residency. With Chinese property buyers and business delegations flocking to Cyprus the relationship between the two countries has steadily developed, further strengthening trade and economic cooperation. The Ambassador of China to Cyprus H.E. Liu Xinsheng envisions a bright future for both China and Cyprus as the two countries work hard to develop their economies. Ambassador Liu Xinsheng joined the Chinese foreign ministry in the 1980s and worked in United Nations affairs in New York and Geneva, after which he served as Ambassador of China to Tanzania. He was posted as the Ambassador to Cyprus in July 2012 and has enjoyed his time discovering the island’s natural beauty and rich cultural history.
The Chinese and Cypriot governments have attached great importance to the bilateral relations between the two countries. China’s total foreign trade volume reached over US$3.86 trillion in 2012, growing by 6.2% year on year. Although trade with Europe, China’s biggest trading partner, declined by 3.7% in 2012 the total trade volume between Cyprus and China increased by 5.4% reaching US$1.2 billion. Cyprus has also increased its exports to China over the last year with pharmaceuticals, agricultural products and shipping related services being the key exports. Exports from Cyprus to China reached €119 million in 2012, a significant increase of 351.6% year on year. The increased interest and the latest trade figures show that China-Cyprus business ties remain stable and have kept growing despite the global economic crisis, giving an indication of the significant potential of broader cooperation between the two countries.
How would you describe the bilateral relations between China and Cyprus?
China and Cyprus are very old friends. In the 1960s Archbishop Makarios, the first President of the Republic of Cyprus, and Mao Zedong became close friends and the two countries have continued to support each other over the decades. ‘One China, One Cyprus’ is our common catch phrase and as one of the prominent members of the UN Security Council we strongly support not only Cyprus, but also the peace talks to solve the Cyprus Problem. Cyprus has also been very supportive of our One China policy and we share many common interests. Although Cyprus is not a big country or economy, we have very close economic cooperation and cultural exchange in the fields of education, health, sports and business. An added reason to celebrate our relationship is the fact that 1st October happens to be both our National Day and the Independence Day of the Republic of Cyprus.
How do the Chinese view Cyprus and what are your impressions of the country?
Cyprus was very famous in China in the 1960-70s because of Archbishop Makarios, but over the years Cyprus has become well known for being an attractive tourist and investment destination. More recently Cyprus has also become known for its economic developments and the financial crisis. Personally I enjoy the historical and cultural heritage of Cyprus, which spans over 10,000 years, the island has beautiful landscapes and beaches making it a great place to work and live. Cyprus is also very significant for its strategic geographical location between Europe, Africa and the Middle East, which puts it in a great position to potentially be a major player in regional issues. Cyprus being an island, EU member and close to three continents is a clear advantage for the country also in terms of business operations.
There has been an increase of Chinese interest in Cyprus. Why is Cyprus attractive to Chinese investors? What sectors do you believe have the greatest potential for Chinese investment and how can Cyprus better support investors?
The number of Chinese citizens coming to Cyprus for investment opportunities, education and tourism is growing. One key area for China is the real estate sector with increasing numbers of Chinese clients buying property in Cyprus. We are also exploring possibilities of cooperation in energy, infrastructure development, financial services and shipping. The shipping industry provides great opportunities as in recent years Chinese ship building and ship financing has developed quickly. Tourism continues to be important as Cyprus is becoming better known in China and the financial and corporate services sector provides many common interests and opportunities. Cypriot businesses can also discover opportunities in China as our economy is developing fast and we are hoping to see more foreign investment, collaboration and bilateral trade. To support investors from China a crucial aspect is the efficient and open sharing of information about both developments and procedures in Cyprus.
Why do you think Cyprus and especially Paphos has become very popular for Chinese property buyers?
The great natural environment of beaches and mountains in the Paphos region, the friendly people, good infrastructure, schools and amenities have all made Paphos popular among the Chinese. Another important factor in making Paphos a preferred location is the concentrated marketing efforts in China by Cypriot companies and developers particularly from Paphos. The price of property is also cheaper in Cyprus than it is in China and many Chinese people see the country as a great location to provide their children with an English education. Being an EU member and the permanent residency Cyprus offers are also incentives for many Chinese people to choose Cyprus. We have very close cooperation with the Cypriot government, business associations, chambers and local law and accountancy firms in order to provide Chinese investors and property buyers with information and assistance when looking at Cyprus as a potential destination for both business and leisure.
China’s growth is becoming the single largest driving force in global energy markets. With China’s economy expected to expand by 7.7% next year, the country will also need more natural gas. What are your thoughts on the discovery of natural gas in Cyprus and will Cypriot LNG also play a part in satisfying Chinese energy needs?
The discovery of natural gas has been a great development for Cyprus. Chinese companies and the Chinese government are very supportive of Cyprus’ hydrocarbons exploration efforts. We have had many discussions with the Cypriot government and local companies and hope that Chinese businesses can be a part of the developing oil and gas industry. So far there have been many business delegations from China and I am confident we can find suitable projects in the energy field for Chinese investors in the future. We hope that China can make a contribution to the budding Cypriot energy industry.
China is making great efforts to modernise and develop its economy. Cyprus is going through tough economic times today, what lessons could Cyprus learn from China?
Over the last several years, China has taken great strides in developing its economy. The lesson we have learned is that it is imperative to make your own decisions based on your country’s situation and characteristics. When we talk about the Chinese dream, we talk about long term strategies to secure a better future for our country. China started its economic development strategies 40 years ago and with the joint efforts of the Chinese people we can and have reached many of our goals. Our target is to double our GDP and double our per capita GDP by 2020 and to double again by 2050. Long term strategies are part of Chinese culture, we attach great value on family and society and planning for the future. With the challenges we face as a big economy, we must keep developing our nation, which is why we put in place these long term strategies for the benefit of future generations. The key to success is to make a plan, stick to it and work hard for it. Our first economic strategy made in 1979 was to re-double our GDP by the end of the century and we reached our target ahead of schedule in 1997. We believe that Cyprus as an EU member and an island country has great advantages in its economy and can benefit from its strong international economic relationships. Despite its relatively small size, Cyprus has traditionally been a strong power in the shipping and services sectors and with hard work and good planning we believe it can continue to develop these industries and attract more investment.
Has the financial assistance programme to Cyprus and the haircut on bank deposits had an impact on Chinese interest in Cyprus? If so, how can Cyprus reassure Chinese investors?
One of the major developments between our two countries since August 2012 has been the increasing interest for Chinese citizens to buy property in Cyprus. Figures given by the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Investment Promotion Agency (CIPA) state that over 1,000 Chinese people bought property in Cyprus in 2012. This property boom was very positive and there is still significant interest in Cyprus, however after the bailout we have seen a slight decrease in buyers this year. We hope that the Chinese can regain their confidence in Cyprus and feel secure in coming here and investing in property. I must thank the Cyprus government, the CCCI and CIPA as well as other associations for their work in reassuring Chinese clients by providing them with relevant information about documents and procedures in regard to coming to Cyprus. Cypriot businesses have also been active in visiting China and setting up representations there to better serve Chinese clients by offering advice before they visit Cyprus. Providing balanced and honest information about the situation in Cyprus is the best way to reassure the Chinese and our embassy is also helping in these efforts.
As the Ambassador, what ambitions and hopes do you have in terms of relations between Cyprus and China?
During my post as the Ambassador of China to this beautiful country, I hope I will see more economic development and social stability in Cyprus as well as progress in the peace talks in regard to the Cyprus Problem. I wish Cyprus all the best in its efforts to resolve this crisis and I believe that with hard work, strong leadership from the government and with support and solidarity from the people, Cyprus can overcome its current situation in the near future. Cyprus is a peaceful country with friendly people and it has significant economic potential. The country is very warm, not only in weather but in the hearts of the people and I hope relations between China and Cyprus can continue to develop. To achieve this, the most important factor is that the two nations get to know each other better so that we can go forward hand in hand, shoulder to shoulder, and find opportunities to serve both our interests and to develop strong economies in both China and Cyprus. China together with its friends will continue to support Cyprus and we are confident that the future of Cyprus is bright.