Malta will be the first EU country to sign a medium-term cooperation agreement with China when the Prime Minister flies to Beijing on Tuesday.
According to the government, the five-year memorandum of understanding announced on Thursday has already sparked interest from other European countries seeking to tap similar deals.
We have been approached by four other European countries
“We have been approached by four other European countries asking what this deal will entail to see how they can follow suit,” a government spokesman said when contacted.
However, it is not yet clear what benefits the agreement will contain. Nor is it known what revenue it will generate or if Malta is expected to give up anything in return.
Prime Minister Joseph Muscat will be meeting Chinese Premier Li Keqiang and the agreement will be signed in their presence in Beijing on Wednesday. Chinese Vice President Li Yuanchao is also expected to be present.
Dr Muscat will also attend the Eco Forum Global conference in Guiyang, the capital of southwest China’s Guizhou Province.
The government said it is optimistic this agreement will provide the legislative framework to facilitate reciprocal investment in both countries.
It also believes the agreement will provide a platform to assist Maltese companies wishing to invest and supply the Chinese market.
The energy sector is an important cog in the agreement following the deal signed last September between Shanghai Electric and Enemalta to form two joint venture companies: the first to invest in renewable energy projects in Europe with a target to have 300MW over the next five years; the second to be an energy service centre to service the power plants Shanghai Electric will have in the region.
“We have been working on signing this deal for the past year,” the spokesman said.
Dr Muscat has described this agreement as a “blueprint for multifaceted cooperation... over the coming five years”.
The aviation industry is another area where potential investment between the two countries is being tapped.
With China building a number of airports, Malta is seeking to improve legislation and make it more favourable for Maltese companies through advantageous tax incentives to lease aircraft to the Chinese.
However, it is not clear if Air Malta will feature in discussions with the Chinese.
The memorandum of understanding is the second major deal the government has signed with China in less than a year after it sold a 33 per cent stake in Enemalta and the Delimara power plant to Shanghai Electric for €320 million.
However, Dr Muscat has assured that the government would not be putting “all its eggs in one basket” but seeking similar agreement with other countries, particularly the Gulf States.