China’s Silk Road discovers a prospective milestone in Cyprus

While the United States and the European Union push back against Chinese investments, Beijing has found an alternative road to western trade via the island of Cyprus, embedding itself within the fabric of the small gas-rich EU member state as it seeks to add yet another nation to its New Silk Road project.

Due to its location at the crossroads of three continents, Cyprus has been a highly sought-after nation.

From kingdoms, empires and even until the present day – when over a third of the land is still occupied by Turkish forces and two permanent British military bases remain a constant reminder of its colonial past – the island has constantly had to deal with the threat of foreign conquest.

These days, however, rather than fending off overseas suitors, it has taken an “open for business” approach, welcoming trade from all corners of the world as a means of growing its economy and achieving a sense of security.

Speaking to State-run press agency Xinhua last year, Cyprus President Nicos Anastasiades talked up China’s presence on the island, saying that its location “which lies on the old Silk Road” would “provide promising prospects for big Chinese companies to invest” – and they have done exactly that.

State-owned China Communications Construction Company Ltd. is among those bidding for the redevelopment of the port and marina in Larnaca, the southern coastal town that is home to the island’s main international airport. A 40-minute drive east is where a Chinese consortium is planning a resort worth millions of dollars in the Famagusta area while Macao-based group Melco have just opened their first casino on foreign soil, in Limassol, as part of a $500 million project.

Then there are Cyprus’ huge natural gas reserves. Assessments by the United States Geological Survey estimate that the Eastern Mediterranean contains some 345 trillion cubic feet of natural gas and, with China looking to diversify its energy sources, Cyprus has emerged as a key point in its Maritime Silk Road initiative. China already accounts for roughly a quarter of trade passing through the Suez Canal in Egypt, just 450 miles from Cyprus’ shores, adding further importance to its bid for Larnaca’s new port.

For the likes of the US and the UK, Cyprus has always held significance: from using the island as a support base at the height of the Cold War, their controversial involvement in the Cyprus issue which culminated in the country’s division in 1974, and the use of the British bases as a launching pad for numerous military operations in the Middle East. Yet, while such involvement in Cyprus has been focused on their own military objectives, perceived as self-seeking by the locals, China is focusing on cultural and demographic integration.

Cyprus’ contentious fast-track naturalization scheme which grants passports for investments as little as €2 million ($2.33 million) has seen wealthy foreigners swarm in, though it is visa acquisition that has had the most success with the Chinese.

Further attracted by a lenient tax system (the second lowest in the EU), it has become home to a growing Chinese community, particularly in the western town of Paphos, where billboards, street signs and menus can now be seen in Chinese. Direct flights between the two countries are also in the pipeline.

While the US tries to limit Chinese trade on home soil and the likes of France and Germany back EU laws that would do likewise, Beijing continues to move forward around the world and the case of Cyprus is further proof of this.