It is often said that opposites attract, and there is no better proof of this than the flourishing business relationship that exists between China and Cyprus.
Situated half a world apart, China is more than a thousand times bigger than Cyprus, yet the charming, sun-blessed island in the eastern Mediterranean offers Chinese businesses a proposition that few other locations can match. It not only presents the ideal gateway into the EU, but also opens avenues for Chinese enterprise into Africa and the Middle East and provides an ideal launch pad for investment into Russia, the former Soviet states, India and Eastern Europe. As the EU’s south-easternmost outpost, lodged between three continents, Cyprus boasts a favourable tax regime, an advanced commercial infrastructure, a conducive business environment, a liberal investment regime and a highly qualified workforce making Cyprus a compelling destination for Chinese investors.
Having celebrated 40 years of diplomatic ties in December 2011, Cyprus and China have a long history of friendship and mutual cooperation, which began as far back as the 1960s, during the first years of Cyprus’ independence from Britain. Since then, the relationship has matured and deepened, with trade, economic, scientific and cultural co-operation between the two communities continuing to flourish to this day.
Diplomatic relations between the two countries were established in 1971, and Cyprus’ embassy in Beijing was opened in 1989. Cyprus was amongst the first countries in the world to support China’s bid to gain its UN seat, and has been supportive of the ‘One-China’ policy. In turn, China was one of the first countries to recognise Cyprus after it achieved independence from Britain in 1960 and has supported Cypriot efforts to find a just and viable solution to the ‘Cyprus Problem’. This mutual respect has been emphasised in the high number of official visits and conclusion of numerous bilateral agreements and co-operation agreements throughout the years.
While bilateral relations are excellent in the political arena, they are also rapidly developing in the fields of trade, health, economy and culture. The two countries have signed 18 bilateral agreements in areas such as cultural, economic, scientific and technological cooperation, tourism, avoidance of double taxation, mutual promotion of investment and merchant shipping.
Trade relations and contacts between Cyprus and China go back to the medieval period when merchants from Lefkara, which is famous for its lace, were trading their embroidery products to Shanghai. In recent years bilateral trade between Cyprus and China has increased by almost 100 per cent compared to 2005 figures. In 2010, imports from China in Cyprus amounted to 343 million euro and have increased by around 10 per cent compared to 2009, while exports to China amounted to 16 million euro, an increase of more than 35 per cent. Despite the fact that Cyprus’ export rate is small compared to China’s, products such as wines and spirits, dairy products, citrus fruits, olive oil and pharmaceuticals, have established a strong market presence and are highly regarded by Chinese consumers. At the same time Chinese products such as construction and building materials, furniture, household effects and manufactured goods are of high demand in Cyprus.
The maritime sector in particular has developed strong ties with China and is already a major employer of Chinese seafarers, with Chinese crew making up a major proportion of the staff on Cypriot-managed ships. In addition, Cyprus based shipping companies have built vessels worth over 1.3 billion euro in China between 2008 and 2010.
Cyprus' longstanding friendship with China has seen the island seek to further China’s relations with fellow EU countries, with both countries expressing a willingness to further cooperate at all levels to promote economic and trade cooperation and enhance the current goodwill and personal friendships that have been built between the two countries. 2011 marked a major milestone in the relationship between Cyprus and China, a number of cultural events were organised to mark the 40th anniversary of diplomatic relations, among them a concert of well-known Cypriot composer Faidros Kavallaris. Built on deep-rooted relations, China and Cyprus are determined to push bilateral relations to new heights.
China-Cyprus Business Links
Chinese telecom manufacturer and network solutions provider ZTE signed a contract with Cyprus Telecom Authority (CYTA) in 2000, offering CYTA an intelligent network system, while in 2009 MTN Cyprus signed a 20 million euro agreement with Huawei Technologies Co. of China for a network infrastructure upgrade.
In 2009, Chint Electrics Co. Ltd won the bid for undertaking an 18.4 million euro electric wire and cable project for the Electricity Authority of Cyprus.
Generic pharmaceutical manufacturer Medochemie signed a trade agreement with Chinese company MEHECO for the export of pharmaceutical products to China in 2010.
In 2008, Chinese state-owned company CBMI Co. Ltd. signed a contract worth 83.3 million euro to build a new cement factory in Cyprus for Vassiliko Cement Works Ltd.
Marfin Popular Bank opened a representative office in Beijing in 2011, while in January 2011 the Bank of Cyprus signed a cooperation agreement with China Development Bank Corporation to jointly finance investments particularly in the areas of shipping, renewable energy and infrastructure.
Sectors of Opportunity
• International Financial Services
• Science & Technology and R&D
• Regional Headquartering
• Maritime & Shipping Services
• Warehousing & Logistics