China Ocean Shipping Company’s (COSCO) interest in Limassol port secured President Nicos Anastasiades an invitation to address a business audience in Beijing and Shanghai.
“COSCO has (shown) a real interest in Limassol port,” Transport Minister Marios Demetriades told reporters from China.
Earnings at Limassol port alone are currently about €20-€25 million per year, while only a few years ago, the port was reporting losses.
The government believes that the new operator could increase profits by up to €100 million per year with investments in infrastructure and superstructure upgrades, such as modern equipment, better cranes and facilities for berthing larger vessels. Cypriot businessmen have returned from China hopeful that apart from the port, the island will this time manage to sell holiday packages and houses to wealthy Chinese. President Anastasiades has announced the setting up of 15 new locations for consular processing of visas to Chinese nationals.
“This is something the Chinese businessmen had been requesting for a long time now. Visa applicants (currently) have to travel to Beijing and often stay overnight in the big city,” Andis Nathanael, the head of the Cyprus-Chinese Business Association told the press.
The move is also aimed at making business travel less complicated, which in turn could help bring more investments to Cyprus.
Nevertheless, failed investment deals – such as the 2013 collapse of an agreement between China Glory National Investment and Aristo Developers for the Venus Rock Golf Resort project in Ha Potami and Far Eastern Phoenix’s interest for old Larnaca airport in 2012 – have left Cypriots feeling wary.
“Cyprus has not yet struck the big deal but more than 1,000 Chinese nationals have already bought houses on the island. At the same time, audit firms are already providing services to Hong Kong and Beijing,” Nathanael pointed out.
Investment tap opening
The timing for Chinese investment could be right as the Asian giant is looking to take money out of the country. China’s renminbi (yuan) has seen a sharp devaluation recently and fears of their huge stock bubble bursting scared global markets a few weeks ago.
Recently, China has been turning its eyes towards Europe. According to Financial Times figures, only this year investment in the continent reached $27.3 billion.
The newspaper suggests that this “is only the start” as China has already announced intention for another $328 billionn investment in Europe through the Silk Road project.
Investments of around €40 billion by China in the UK earlier this week are indeed more evidence that “the investment tap” has started flowing. The time might also be ripe for Cyprus to capitalise on this.