MoU between Malta and China expected to boost financial services

A Memorandum of Understanding between the MFSA and the China Securities Regulation Commission - which will open up Malta's financial services sector to one of the world's largest pools of private capital - is expected to be signed soon, The Times Business has learnt.

The signing of the MoU is the result of negotiations which began in 2008 and places Malta's funds industry at the same level with the major funds domiciles, particularly in the European Union.

The purpose of the MoU is to facilitate business by financial institutions in Malta and China in either country.

China's financial services industry has undergone major reforms over the past decade. Economists expect China to overtake Japan as the world's second largest economy in 2010 and within a decade to become the world's most powerful financial centre.

Malta and China have enjoyed cordial political ties ever since the two countries established diplomatic relations in 1972. Economic ties have not been spectacular but have improved over the last decade. Imports from China have increased from €60.3 million in 2000 to €106.8 million in 2008, while exports to China increased from €347,968 in 2000 to €24 million in 2008. In October 2008 Prime Minister Lawrence Gonzi visited China where he had talks with President Hu Jintao.

Infrastructure, Transport and Communications Minister Austin Gatt led a government delegation to Beijing in February last year where he promoted the Malta shipping flag, the Malta Freeport and Malta's port facilities.

Initiatives have also been taken to promote Malta as a tourist destination for the Chinese market with particular emphasis on Malta as an English language centre.

Increased business by Maltese and Chinese financial institutions has the potential to greatly strengthen economic ties between the two countries.