Page 6 - Layout 1

News
China expected to make inroads on The Rock
and [the previous personal contact] carries amazing weight and importance, rather than being from someone just pitching up; the Chinese look at things with a long term relationship and for them Gibraltar is very strong and stable - the fact that it is an over- seas territory and, in old fashioned-speak, a British Crown colony, we have remained British for 350 years and we are not here today, gone tomorrow”, he emphasised.
“Alot of what I do is Gib plc. It takes a lot of time, dedication and effort to achieve things in these territories; the timeline is much greater than it is in western Europe or the US, for example, because their outlook on how things happen is totally different to ours.” Callaghan revealed: “I am looking to employ a couple who speak Mandarin in Gibraltar.”
In September 2014 Gibraltar entered into a MoU with Shell, related to the possible supply and storage of liquefied natural gas (LNG) in Gibraltar. The purpose of the MOU was to allow Shell to undertake a study into establishing an LNG storage facility on the Detached Mole with a view to supplying the new Gibraltar Power Station at the North Mole, and this is now progressing.
Now there is speculation the Chinese may be involved in other development. At end-September, the government revealed its intention to build over 1,500 affordable homes on three new estates from mid-2019 until end 2021. No financing details were given, nor the total expected cost – Fabian Picardo, Chief Minister, invoked the confidential tender process from late this year until at least August 2018. Some cite £200m as the likely total cost.
The first flats, Hassan Centenary Terraces, will be on part of a near-700,000 m2 plot of reclaimed land on Gibraltar’s east side and where Cameron Holdings planned a £1.1bn low-energy, mixed-use development that required a total of nearly £87m to be paid upfront to the government by September 2015.
The Blue Water project – the second planned there since 2006 – was to provide 1,147 co-ownership government homes in six blocks, but these latest flats, subject to planning, will be in a different part of the site to “provide spectacular aesthetics at the entrance to the East side development”.
Chinese firms have invested heavily in infrastructure projects in target countries, including Europe, but some jurisdictions have taken a more cautious approach fearing undue influence in their local economies.
Ray Spencer
A concerted behind-the-scenes effort over the past two years to win Chinese investment and encourage companies to set up in Gibraltar is expected to reap dividends shortly as part of the Far East nation’s “one belt, one road” (OBOR) overseas expansion initiative
about its intention and Gibraltar’s government, when asked by Gibraltar International, to confirm the extent or existence of the MoU, simply replied: “The government will make an announcement about any relationship it has with any commercial entity when it is ready to do so.”
The Chinese are believed by many to be looking at potential projects on the Rock. One Chinese official is said to have bought an apartment to serve as a base from which to conduct business negotiations. A bank with Chinese connections is understood to be on the verge of gaining a license in on-line banking.
Alicia Bowry, a leading member of the 3 year old Chinese Association of Gibraltar, said: “It is a really good thing that a Chinese organisation is interested in Gibraltar, because
that sometimes leads to a Chinese competitor deciding also to take a look at the possibilities being offered. See also “prospecting for business”, p10
“The typical way for Chinese to approach a new territory is to first get to talk to people in the local community” – there are around 200 Chinese living on The Rock, mainly working in gaming and financial serv- ices, and there are four or five people heavily involved in the Association. “I met the Chinese ‘introducer’ – a sort
of agent – who wanted advice from myself, as an accountant, and my husband [Richard] a lawyer, about how things are done here and what opportunities there might be”, Bowry told Gibraltar International.
Although she had no direct knowledge of the MoU, she confirmed that BECGI would have “first wanted to be quite certain that it could gain business in Gibraltar before signing”.
“Chinese companies are looking at different European opportunities, because they are outward-looking and successful and are cash rich”, Bowry said. She believed finance “would not be a problem”.
A Gibraltar insurance broker, Bruno Callaghan) with history of chasing Chinese business first visited Beijing in 1992 as part of the jurisdiction’s first and only trade mission. “Last year was the first time I had gone back
Map illustrates China’s ‘one belt, one road’ economic initiativeive
It is understood that after several visits over two years by Chinese State and business officials, a Memorandum of
Understanding (MoU) was signed in September between the Gibraltar government and Beijing Engineering Construction Group International (BECGI), a Chinese state- owned enterprise (SOE).
A MoU is a formal agreement indicating an intended common line of action between two or more parties; although MoUs are not legally binding, they carry a degree of seriousness and mutual respect (particularly in Chinese culture), stronger than a gentlemen’s agreement.
BECGI’s European headquarters has since 2013 been based at Manchester’s Airport City, where the Chinese firm invested £800m; a year ago it started work on a large Salford residential and commercial development.
Xing Yan, is managing director of BECGI, an international property developer and construction company that is focused on growing its global presence by “bringing projects to life through strategic partnership, investment and relationship building”.
BECGI did not respond to enquiries
6
Gibraltar International
www.gibraltarinternational.com