After Scooping Up Greek Assets, China Turns Toward Cyprus

(AP Photo/Petros Karadjias, FILE)

China’s rising influence and hopes to securing an economic beachhead into the European Union through Greece now has a second approach – the nearby island of Cyprus, in a key geopolitical position between Europe, Asia, the Middle East and Africa.

China’s Cosco has acquired the major stake in the port of Piraeus and wants to upgrade the country’s notoriously poor and inefficient rail systems to move goods, especially now than an Italian operator has taken over the Greek rails.

Piraeus is a major port into the EU but Cyprus is proving a lure of its own, the financial news agency Bloomberg said in a feature about China’s hopes there and Chinese companies wanting to make more investments.

Those are being spurred by Lawrence Ho, billionaire owner of Hong Kong’s Melco International Development, who said he’s going ahead with a planned launch of a casino on Cyprus and will open a temporary facility this year to get it rolling.

Ho’s company, also majority owner of Macau casino operator Melco Resorts and Entertainment, late in 2017 increased it share to 75 percent in a consortium awarded an exclusive casino licence by Cyprus’ government.

Earlier Ho said his company would will operate what will be called the ‘City of Dreams Mediterranean’ in Limassol on the island’s south coast and will also target visitors from Russia and Britain, Bloomberg said in an earlier report.

“Asian tourists will be able to recognize our brand and as time develops they could be attracted to Cyprus,” Ho said in an interview in Nicosia. “Melco as a company attracts sophisticated customers, middle and upper class customers.” Other targets include big rollers from the nearby Middle East.

China’s growing interest was noted during a recent celebration in Cyprus’ capital of the Chinese new year, with Chinese companies keen on the island’s reputation for being a good place to stash money.
“We have investments right across all sectors of the economy,” Christodoulos Angastiniotis, president of the Cyprus Chamber of Commerce and Industry, adding that there were some “very interesting funds” from China, lured by an “attractive tax system.”

Cyprus has thrown down the welcome mat for the Chinese companies at the same time there’s concern in other EU countries the Chinese may be making too big a footprint and scooping up too many big companies to gain a controlling hand that could extend to politics and other arenas.

With an $11 trillion state-run economy, China has money to burn to build its interests around the world and where its investments have been quietly growing on Cyprus, Bloomberg said, from real estate to shipping, financial services, tourism, and renewable energy.

At the event in Nicosia, Chinese Ambassador Huang Xingyuan spoke of the “huge potential” offered by China’s Belt and Road initiative to double bilateral trade to more than $1 billion—equivalent to about 5 percent of Cyprus’s annual economic output.

At Larnaca, site of Cyprus’s main airport, state-owned China Communications Construction Group is one of two bidders shortlisted to take control of the port and adjacent marina. There are also plans to start direct flights to Beijing after Cypriot airline Cobalt Air received a capital injection from Aviation Industry Corp. of China.

Writing in the Cyprus Mail at the end of March, Ambassador Huang placed all this activity firmly in the orbit of the Belt and Road initiative, citing the economic opportunities it opens to all “regardless of their size and wealth.”

Part of Cyprus’s pitch is that the island has a European legal and institutional framework that’s familiar to Chinese investors from Hong Kong, Christos Scordis, a partner at Scordis, Papapetrou & Co., whose clients include Melco, told the news agency.

“Cyprus is the first European port as you exit the Suez Canal and enter European waters, utilizing the proximity of the Middle East,” said Scordis, who recently organized a seminar in Beijing on doing business in Cyprus. “China tends to see Cyprus as a gateway.”