Feb 14, 2013

At a dawn of a new era for Cyprus and China

At a dawn of a new era for Cyprus and China

Since 1971, when diplomatic relations were established between Cyprus and China, there has been a history of mutual respect and friendship, and an ever-deepening political trust. Over the years, a tradition of regular visits by governmental officials, high profile businessmen, university professors, scientists, etc, has been established and maintained. Visits from business delegations from China, exploring business opportunities in Cyprus have increased, year on year, by 45%; the visits in the first half of this year almost equaled the amount of visits in the whole of 2011, going against the trends of the global financial situation.

With an astonishing 40% growth rate since the early 2000’s, the two countries have had an exceptional business and economic relationship – trade volume of €0.15bn in 2004 grew to €1bn by 2010! There has been nine consecutive years of import volume growth to China – a good sign for Cyprus’ bright future that cannot be ignored.

With the hit of a global financial meltdown in 2011, Cyprus maintained strong performance of exports to China with growth of 44.7% in the coming years. The first half of 2012 brought a bi-lateral trade volume of €0.4bn (a rise of 1.4% compared to the same period of the previous year) and Cyprus’ exports to China grew by 31.3%, making China Cyprus’ eighth largest merchandise trading partner.

By the end of the first half of 2012, Cyprus had received US$17.4m in non-financial investment from China whilst reciprocating with a total investment of US$121m. During that same time period, the accumulated amount of contracts signed by the Chinese amounted to US$235m with a total turnover of US$265 million.

Despite ongoing fear and uncertainty in the global economy, market is slowly but surely recovering. Foreign investment is an attractive prospect for both the investor and for Cyprus, hence the island will greatly benefit from the proposed International Trade and Exhibition Centre Increased investment leads to increased job prospects and improvements to the economy, meaning stronger and smoother trade between the two countries, with a huge impact on both nation and individual level.

By Michael J. Hadjihannas, Partner with FinExpertiza Cyprus

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