An interview with Minister of Commerce, Industry and Tourism of Cyprus

Before Pesident of the Republic of Cyprus Tassos Papadopoulos pay a state visit to China on Dec. 4-8, Mr. Antonis Michaelides, the Minister of Commerce, Industry and Tourism of Cyprus received an interview from reporters of People's Daily and Global Times at his office in Nicosia. Below is an edited transcript of the interview.

Mr. Antonis Michaelides (R) and Ms Jiang Xueqing

Question: According to statistics, bilateral trade between Cyprus and China has How is the trade between Cyprus and China going on in the last few years? Are there any new elements to push the trade forward? What do you think of the potentials of trade between the two countries? Do you have any suggestions and expectations for the further development of our cooperation in trade and commerce?

Answer: Trade exchanges between Cyprus and China during the last decade are experiencing an upward trend. According to the official statistics issued by the Statistical Service of Cyprus, trade exchanges between Cyprus and China have reached during 2005 $267 m., compared to $71 m. in 1995.

However this upward trend is almost solely attributed to the dramatic increase in imports from China. Specifically, imports from China have increased from $69m. in 1995 to $251 m. in 2005. Cyprus's exports to China have reached $2, 7 m. and $15, 5 m. in 2004 and 2005 respectively, compared to $1,1m. in 1995. This increase in 2005 is attributed to the rise in exports of computer software and copper. We hope that this upward trend will continue in the future, so as to reduce the huge trade deficit that we are currently experiencing.

The Ministry of Commerce, Industry and Tourism, realizing the potential that exists in the field of trade between our two countries and within its efforts to bring more balance to its trade with China, provides appropriate support to the Cypriot businessmen in order to encourage them to undertake initiatives that will lead to increased exports of goods and services to China. This support includes the introduction of export oriented schemes, the participation in trade fairs and the organization of business missions and seminars.

A proof of our commitment in improving our trade balance with China is the organization during last April of two business seminars in Shangai and Peking in collaboration with the Cyprus Chamber of Commerce and Industry. The seminars were aiming at presenting to the Chinese businessmen Cyprus as a modern business and financial centre and also as services centre for Europe and the Middle East. Furthermore, a group of about one hundred Cypriot businessmen will accompany the President of the Republic to his official visit to China next month.

We are confident that there is much scope for further enhancement of trade and commercial relations between our two countries. We strongly believe that Chinese businessmen can take advantage of the comprehensive range of services that are offered in Cyprus (i.e. accounting, banking, legal, shipping, consulting, computing, information technology, design, education, medical, marketing e.t.c) and use it as a base for their business activities in Europe, Middle East and Africa. The wide range of services in conjunction to the competitive fees charged make Cyprus highly reputable international businesses centre.

Question: What is the current situation of the Cyprus-China cooperation in tourism? What is the prospect of the cooperation in this field?

Answer: Cyprus, due to its proximity and cultural ties with Europe attracts 94% of its tourist traffic from European countries. In 2005 we had in total 2,470.000 tourists of which around 140.000 came from countries outside Europe (Middle East and Gulf, USA and Canada, Australia, South Africa and Asian Countries).

Our aim is to expand and develop more tourist markets for Cyprus. For this, we promote Cyprus in the Arab Countries, in North America and also in other markets. China is one of the markets that are of great interest for us and I believe that these are good prospects of cooperation.

Question: Are industries playing a major role in the national economic development of Cyprus? Which industries were affected when Cyprus made adjustment to its economic policy according to the requirement of EU? Have you met any problems and obstacles during the process? What measures did your government take to solve the problems?

Answer: The wider industrial sector is today an important sector of the economy of Cyprus and we are continuously trying to improve its performance through different measures in order to enable it to compete in the increasingly globalizing markets.

On the basis of 2005 data, the sector contributes 12% to Gross Domestic Product while it accounts for 11% of total employment. Apart from its importance to these macro economic magnitudes, the sector is also important at the micro economic level. It is an economic activity that offers opportunities for the employment of science graduates, it offers opportunities for research and innovation and overall it creates a lot of forward and backward linkages in the local economy.

Most of the output of the industrial sector was already exposed to competition, ie before accession to the EU, since our trade in manufactured goods was free from tariffs and quantitative restrictions, ever since we implemented the Customs Union Agreement with the European Community. In parallel, most industrial products originating in Cyprus enjoyed free access in the internal market of the EU.

The sectors that were mostly affected following the accession to the EU in 2004 were those sectors that enjoyed protection, that is the food and drinks sectors. Additionally, those sectors that had to adopt new, heavy regulatory framework, also found it difficult to cope with the new requirements.

In order to help these sectors the government introduced new financial tools to foster technological change in industry and facilitate the introduction of new processes and methods that are necessary to improve quality and safety.

Question: The industry of tourism is highly developed in Cyprus. How do you promote tourism of Cyprus to the Chinese in order to attract more visitors?

Answer: For the tourist market of China though still in the developing stages, we have made efforts to promote Cyprus. The Cyprus Tourism Organisation is participating in the major tourist exhibitions in Shanghai and Beijing and we also invited to Cyprus groups of Chinese travel agents. One of our objectives is to promote Cyprus as a center for Chinese tourists traveling in the Eastern Mediterranean, where they can extent their trip to nearby destinations.

Question: How many Chinese tourists visit Cyprus every year? What are their general impressions of your country?

Answer: In 2005 around 400 Chinese tourists visited Cyprus. Though the number is small their impressions of Cyprus were very encouraging. They loved Cyprus weather as well as the diversity of the country. Even though Cyprus is a small country it can accommodate the needs of all visitors offering beautiful beaches and fragrant mountain peaks, ancient monuments and modern cities. Cyprus, at the crossroad of three Continents, Europe, Asia and Africa offers the visitors the opportunity for small cruises to neighboring countries such as Israel and the Holy Land, Egypt and Greece.

By Shuiming Liu from People's Daily and Xueqing Jiang from Global Times