It made sense for Malta to seek Chinese investment but it should proceed carefully, former UK government minister and European commissioner Peter Mandelson said yesterday.

It would not make sense for the island to ignore investment opportunities from China, particularly the 21st Century Maritime Silk Road project, which would link Asia to Europe through multiple infrastructures, Lord Mandelson said. He was the keynote speaker at the annual EY conference.

Lord Mandelson stressed that China was investing in large infrastructural projects in many countries and was well aware it was being carefully scrutinised.

Be confident in yourselves and don’t talk yourselves down

“China knows its investments have to succeed as, otherwise, it will lose future opportunities. My advice would be to go in with your eyes open and read the small print. But go in…,” he said.

He had similar advice on Libya, saying there would be opportunities there in the medium-term but warning “be careful who you are dealing with”.

He was full of praise for Malta and its economic achievements: “That is one hell of a unique selling point you have. So be confident in yourselves and don’t talk yourselves down.”

Warning that it was not enough to have a good product without good presentation and vice versa, he stressed that a good reputation was the key.

Delving into the theme of the conference – Malta: Open for Business – and how attractive Malta was for foreign direct investment, he said improvements had to be undertaken by both the government and the private sector, with the infrastructure as a priority.

Joseph Muscat speaking at the annual EY conference yesterday. Photo: Chris Sant Fournier

‘China aware of being carefully scrutinised’

“Foreign direct investment is like a contact sport. It is all about wrestling the ball from the competition, running with it and trying to stop others from getting it back.

“What do investors want? They want to feel there is an authorativeness about what your government says and does. They want bipartisan support, not only in a political sense but from the social partners. Investors want continuity and they want policy and regulatory predictability,” he said.

“You have all the ingredients for a healthy FDI environment but what you need do is gently, consistently and professionally communicate these attributes.”

This point was subsequently taken up by Prime Minister Joseph Muscat, who told the packed audience of Malta’s leading businessmen he was often accused of being a “salesman” for the island.

I am guilty as charged. I believe that it is my job to promote my country

“I am guilty as charged. I believe that it is my job to promote my country and I have asked my ministers and diplomatic corps to do the same,” he said.

He referred to the need to upgrade the infrastructure and the role of the private sector in this, referring in particular to the roads, noting that there were 40 new cars on the roads every day.

When asked during a panel debate about whether the government should turn to the private sector, Joe Gasan, chairman of the Gasan Group, replied: “The government cannot bear the whole burden of upgrading the infrastructure. To do so, it would either have to raise taxes or reduce spending on other sectors – or both.

“Unfortunately, if a private investor comes in, all too often this just generates accusations of favouritism. But the reality is that the private sector can do things more efficiently. That is really the only option.”

EY used the conference to launch its Attractiveness Survey, which showed that Malta was ranked as attractive for FDI by 84 per cent of respondents in Malta, compared with 79 per cent last year.