TOURISM from China and investments in real estate are just a “drop in the ocean” compared to the huge potential that exists in both sectors, a conference in Nicosia heard yesterday.
The conference, organised by the Chamber of Commerce and Industry (KEVE) and the Cyprus-China Business Association, examined the potential for Cyprus to become a second home for Chinese investors.
The conference heard that Chinese property buyers were slowly returning to Cyprus, but that the country had to earn their trust if they wanted to see further investment.
Deputy Chief of Mission at the Chinese Embassy in Nicosia, Fei Shengchao, highlighted the “vast potential” for increased tourism from his country, noting that out of the 97m Chinese tourists in 2013, Cyprus attracted only 3,000.
“This also shows the vast potential that we can tap in the future,” he said, adding that first-time tourists could become second-time home buyers and third-time traders and investors.
Fei commended the performance of the Cypriot economy in reversing economic contraction and restoring growth.
“Despite the tremendous challenges that this country still faces, there is now more confidence in the economy,” he said, citing the return of foreign home-buyers to the island, many of whom are from China.
“More and more once hesitant home-buyers are coming back, and cast a vote of confidence with their cheques and real money,” the Chinese diplomat said, adding, there is “a huge and strong Chinese interest in investing in almost every sector in this country.”
Fei said the two countries should build on their good relations to enhance them further, going beyond the real estate sector: “There is a lot to do together. Home-buying may just be a starter in a very rich menu.”
Speaking on the sidelines of the conference, Interior Minister Socratis Hasikos also highlighted the huge potential in tourism, given the currently low figures. “We should give special emphasis to how we could attract a bigger number of Chinese tourists,” he said.
Addressing the conference, Hasikos said China is a country of special interest and a close partner to Cyprus, and he highlighted the many opportunities which exist to strengthen relations.
“This is why we wish to attract the interest of the Chinese people and encourage them to consider Cyprus as their second home,” he said.
Head of the Cyprus-China Business Association Panicos Kaouris (a PwC partner) said Cyprus has already become the second home for 1,000 Chinese investors, noting however that given China’s size these numbers are only a drop in the ocean.
“Bearing in mind the small size of our island and our economy we only need a few more such drops in order to have a substantial contribution to our economic growth,” he said.
Kaouris advised that Cyprus “must listen and listen very carefully to what the Chinese investors’ needs are and ensure that the necessary actions are taken in order not only to meet them but to surpass them.”
Speaking to the Cyprus Mail, Kaouris elaborated further: “They need to trust us. They are very cautious when they get out of their country. They place their trust in us, and it is very important not to betray that trust. We have to respect their own way of doing business, which is slow and methodical, and not misinterpret their politeness for stupidity.”
A number of Chinese investors were initially attracted by the government’s offer of a residence permit for foreigners who purchase property worth over 300,000 euros. However, on purchasing the property, some Chinese felt duped by certain developers, accusing them of inflating the price of property sold to meet the 300,000 euro benchmark, despite the real value of the property being much lower.
Kaouris argued that despite past practices, the standard has improved significantly in Cyprus. “Now, our reputation is getting much better.”
He further highlighted work underway to introduce a property certificate report (PCR) in the industry which would be prepared by professional bodies under the auspices of KEVE. The PCR would include information on all angles needed before purchasing a property, from its legal status to the quality of material used in its construction.
“It would be like an MOT test but for properties,” said Kaouris, adding that initially it would be available on a voluntary basis, but at some stage hopefully could become a legal requirement.
“This can improve our product, improve trust, and reduce the risk for the buyer, while also helping the seller promote his quality product,” he added.