In July 2014, not long after Malta had signed a wide-ranging memorandum of understanding with China, the president of the General Workers’ Union, Victor Carachi, expressed his dismay at the public reaction.

He could not understand why people were afraid “that China was some sort of dragon ready to devour us”.

He is not the only one perturbed by this reaction. The Chinese Ambassador to Malta, Cai Jinbiao, also longs to improve the perception of China, believing it is based on very outdated information.

“In the past four decades China has opened up and achieved considerable progress, economically, socially and in its exchanges with foreign countries,” he said, sipping his herbal tea on the cream leather sofas in the formal reception room at the embassy in St Julian’s.

The embassy has outgrown its premises and is planning to move as soon as possible to a much larger site in Pembroke. The move comes at a time when Chinese involvement in Malta is growing rapidly, after a period of relative inactivity under the previous government – certainly when compared to the investments made in the 1970s and 1980s.

Shanghai Electric Power (SEP) has taken an active stake in Enemalta’s future and the MoU signed last summer covers a multitude of infrastructural projects, from the building of a breakwater in Marsamxett to aircraft maintenance bases. But there are frequent comments in the media implying that the money being offered comes with strings attached.

Mr Cai blames this on a myopic view of China, which fails to take in the considerable progress made.

“Over the decades, achievements spread from the countryside to the coastal areas, where industrial zones were set up, providing preferential policies to foreign investors. We went from labour-intensive projects and ‘assembled in China’ products to very rapid development. The average growth rate was about 10-12 per cent.

“We also made significant progress in environmental protection, people’s livelihood and human rights. Now we have reached the stage where we are looking from an economic point of view at quality rather than speed and quantity, and the National People’s Congress recently heard Premier Li Keqiang signal the ‘new normal’, which would put more emphasis on quality, growth and innovation, rather than size and speed,” he said.

“Over the years, state-owned companies and private companies developed and are now very capable of taking up projects in China and overseas. It is against this backdrop that Shanghai Electric Power wanted to go international. Ten or 20 years ago, if you invited a Chinese company – say in the energy sector – to tackle an overseas project, they would not have been able to do that,” he said.

It is widespread – if controversial – practice that intergovernmental deals are based on assistance leading back to contracts for the donor government’s companies. In the case of China, the same principle seems to have been applied to many of the projects listed in the MoU. But Mr Cai stressed that in many cases, this is what the Maltese government wanted.

Take Covec, which was asked to do the feasibility study for a monorail – and then get the construction contract if the government decided to go ahead with the project. The ambassador stressed that Covec, which has wide experience in this field, would be quite happy as one of many bidders for the project – but stressed that this was not what the Maltese government had asked for.

Another infrastructural project whose feasibility study was entrusted to a Chinese company was for the bridge to Gozo – the first project the Maltese government wanted to rope China into soon after it was formed, he said.

The China Communication Construction Company (CCCC) has concluded its report but the Chinese government is well aware that public opinion is still mixed on whether there should be a bridge, a tunnel or neither.

“CCCC was also only tasked with the feasibility study. The government has not really got to the stage of asking anybody – either CCCC or another foreign company – about the construction of the project. It is still far from that. Obviously, this company is happy to provide assistance to the department concerned to see whether it is possible to build it. Technically, the distance and depth of water and other practical conditions are good for a bridge. But whether people like it is really for the Maltese side to decide,” he said tactfully.

For SEP, the formula for cooperation was mutually agreed upfront. He explained that SEP chairman Wang Yundan came to Malta for a short visit in summer 2013 and after meeting government officials, the two sides started to talk about the possibility to cooperate on upgrading Malta’s electricity generation.

“The government went there, saw the facilities and saw how they performed, especially with regards to electricity losses, which were much higher in Malta.

In this era of globalisation, no country can achieve full economic development without cooperating with other countries

“After much talk, the two sides decided SEP would be a minority shareholder in Enemalta and would forge a joint company as a service centre to both manage and service projects here and possible projects in the region. Also SEP would help upgrade the Delimara Phase III power plant. These were the elements of the project.

“This is a commercial contract. On behalf of the Chinese government, we always encourage our capable companies to use their investment and managerial skills to enter foreign countries. So it is under this backdrop that SEP negotiated with Enemalta,” he said.

“SEP has other investments in other European countries. So if there is a regional service centre here, it will not only service the Delimara plant but also take care of the management of the other projects. And the two sides can also explore the possibility of making full use of solar energy here as if they combine forces, they could come up with better ideas.

“Recently, I read a report that the percentage of renewable energy in Malta is a bit low but if they can work together, the level of renewable energy could rise,” he said, adding that so far, there had not been any talk of manufacturing PVs in Malta.

The MoU with Malta is a small part of a much greater attempt to revive the Ancient Silk Road of 200BC. China would like to revive the spirit of this major trading route. It was first mooted in 2013, when Premier Xi Jinping travelled to Kazahkstan and Indonesia and proposed to build a Silk Road Economic Belt and a 21st century Maritime Silk Road.

“The idea is to have better connectivity. In China we have a slogan that ‘better roads lead to a better life’. In this era of globalisation, no country can achieve full economic development without cooperating with other countries.

“The idea is not only to trade but to have more cooperation in infrastructure building, more people-to-people exchanges. Along these two ‘roads’, over 60 countries are involved and so far we have over 50 of them expressing interest ­– including Malta. Malta is interested in the Maritime Silk Road because it occupies a very strategic position in the Mediterranean.

“But the concept is inclusive, not exclusive. Any country on the road or near it that has any interest in it is welcome to talk to us. Any ideas can be brought up for either a bilateral or a multilateral project,” he said.

In order to facilitate these two ‘roads’, preparations for an Asian Infrastructure Investment Bank have already started with dozens of committed members – including the UK and possibly Australia, to the dismay of the US which is questioning its corporate governance.

A Maritime Silk Road Fund was also set up with $40 billion to finance future projects.

“This is a key area for our foreign policy, for our diplomatic corps to explain the meaning of the Silk Road and to get countries to come up with projects and make full use of the future preferential funding terms.”

In spite of all the optimism relating to present and future projects, one past issue that still hasn’t been fully sorted out is granting visas for Chinese wanting to visit Malta. There has been progress since the entire system was clamped down following cases of abuse, and it now takes around two weeks. However, tourism arrivals fell from over 6,000 in 2011 to under a thousand the following year, slowly climbing back up to 3,200 in 2014.

Mr Cai pointed out that the facilitation of travel was very important.

“China has already reached agreements with a great number of countries on visa exemptions for diplomatic and service passports or ordinary passports. And with the United States and Canada, we agreed to provide multi-entry visas for businessmen for as long as 10 years, and as long as five years for students,” he said.

He acknowledged that Malta might not be able to reach such bilateral agreements because of its EU membership but he said sooner or later, the EU would also have to talk about visa exemptions. In the meantime, however, he suggested that ways should be found to speed up the process.

“In the past two years, the efficiency of visa application reviews has speeded up. According to EU regulations, certain information should be provided during the application but in the future, that could be simplified.

“The Chinese Embassy in Malta is quite efficient at issuing visas to Maltese officials, businessmen and tourists. We should do things reciprocally. I see progress but I feel more measures could be taken to encourage people to come to Malta. If we can get more people who travel to London, Paris and Rome, for example, to come to Malta, then it would drastically increase tourism revenue,” he said, noting that outbound Chinese tourists broke the 100 million mark in 2014 for the first time.

The lack of a direct flight is clearly a deterrent but Mr Cai revealed that talks were already under way – and that his original scepticism over whether there would be sufficient demand to sustain capacity had been overcome.

“Recently I learned that managers from Hainan Airlines came here to do a feasibility study and the two sides could start talking about a charter airline first and then have a regular airline,” he said, but declined to be drawn on whether the other side was the Maltese government or Air Malta.

“The information I got was that Malta would not be the only destination. If they can strike a deal, a plane can come from any city in China to Malta and then connect to other major cities in Europe and then come back to China.”

A look at Hainan’s route map shows how strategic a fit Air Malta’s route network would be. Hainan is the largest privately-owned air transport company and the fourth largest Chinese airline in terms of fleet size – but its 500 domestic and international routes only reach a few European countries. Would Hainan be interested in taking a stake in Air Malta? Mr Cai insisted he did not have any details about the talks, and had only heard about them from the Maltese ambassador in China.

“When I talked to him I found that there is the possibility [of direct flights] because they have already identified an airline in China and the two sides have already met and talked,” he said with a coy smile.

Relations have been overshadowed in recent months by allegations of abuse at Leisure Clothing. The court recently found that there was enough evidence for two directors to be tried for human trafficking and the exploitation of Chinese and Vietnamese employees.

Mr Cai has taken a personal interest in this case, and is still sceptical about the claims.

The company was set up in the late 1980s, but the textile industry has been facing huge challenges with rising labour and textile costs. To remain competitive, a few years ago it took on Chinese and Vietnamese workers.

“Last July, three Vietnamese of these tried to illegally smuggle themselves into Sicily but were stopped by immigration. This was a breach of your laws and should be dealt with. But they then started to accuse the factory of not paying them well and came up with a story about their living and working conditions.

“I visited the factory and talked with the workers and they are all happy with their job there. There are more than 10 Vietnamese workers but only three have this problem. The others are happy with their pay and work. And the working and living conditions are not as poor as mentioned by some corners of the media.

“I heard from people who know the factory well that the living conditions of the workers are better than 25 per cent of the housing conditions in Malta. Of course, there is always room for improvement. I understand that in recent months, the company already did its best to provide higher salaries and better conditions, and they shortened the hours at the weekend. They even organised events to mark the Spring Festival and took them to Sicily and places of interest in Malta. But I can absolutely assure you that this is not a case of human trafficking,” he said.