Now that nominations have been received for all the top EU jobs, and our Prime Minister is not among them, perhaps we can reflect on his abortive ambition to become the next President of the European Council instead of Donald Tusk.

The cherry on the cake is that he has no Damocles sword over his head and can settle down to continue his term until the next election. This gives us all a sigh of relief and a sense of continuance.  Muscat had promised to leave the helm of the Labour Party before the next general election but has been facing pressure to stay on by party supporters.  Malta can look forward to three years of his brinkmanship.  

At this juncture, one may stop to recall the ambitious agreement entered into with China last year.  The agreement was signed by Foreign Affairs Minister Carmelo Abela in the presence of Prime Minister Joseph Muscat and He Lifeng, the chairman of the Commission for National Development and Reforms. This agreement will provide a framework for future investments, projects and cooperation in commerce, tourism and financial services between the two countries.

Malta and Italy are amongst the first European states with which China has made such an agreement. Critics said that this was no milestone. It was a renewal of a previous one signed five years ago and encapsulates the wishes of China in its unique policy to trade and negotiate more business with other countries. Party apologists differ. They laud the historical trade agreement signed in Shanghai, a city which, since the fourteenth century, was rapidly developed into a world financial centre and now boasts the largest container port in Asia.  Malta and China agreed to strengthen bilateral cooperation in both banking and insurance and, from the Chinese side, the MoU encourages Chinese financial institutions, namely banks, insurance companies and companies operating in the Fintech sector, to establish offices in Malta.

Given the recent closure of three small banks and the warning by the MFSA to the Bank of Valletta to reform its risk profile, one concurs that there is never a better time to strengthen our banking platform. Such expansion in the banking sector by Chinese investors has already been functioning successfully in both Ireland and Luxembourg. So Malta can think big and sharpen its tools to reform its banking infrastructure.

Another area in which collaboration with China can flourish is the logistics sector. So far, it has acted as a transportation hub and an intersection between East and West. Other areas to watch are blockchain and artificial intelligence, where Malta started to be seen wanting to jump on the bandwagon of these technologies.  It was last year that saw it legislated to regulate the DLT sector.

Can this be a David and Goliath syndrome, since Malta is too small to research such expensive ventures and has a modest degree of its own R & D history? Not so fast. Muscat has often remarked positively that his vision is to embrace cutting edge technology - his government is taking a proactive role.  On entering the digital era, he solemnly proclaimed that, as from next year, robots will be assisting Maltese doctors and surgeons during surgery on Maltese patients.  

Back to the 'one belt, one road agreement'. This comes at an opportune time, with China expeditiously building its own version of Silicon Valley in Shenzhen, located near the Pearl River delta.  China is pouring millions into this technical hub to lure talented people to team up as start-ups aided by venture capital and subsidised laboratories looking into cutting-edge robotics, AI and related technologies. Be that as it may, Muscat proudly announced Malta's pioneering task to regulate Blockchain development and later to focus on exoteric matters related to AI. He said: "There are problems and great challenges in such a development. Malta is proposing regulations and regularisation and as a country we will have a framework on this".  

A little background on China's latest initiative to expand trade can be opportune. China's policy over the previous centuries helped to establish the Silk Road, a network of trade routes that linked China to Central Asia and the Arab world.  The name came from one of China's most important exports - silk.  

In 2013, China's president, Xi Jinping (see picture), proposed establishing a modern equivalent, creating a network of railways, roads, pipelines and utility grids that would link China and Central Asia, West Asia and parts of South Asia.  This initiative aims to create the world's largest platform for economic cooperation, including policy coordination, trade and financing collaboration, and social and cultural co-operation.  To revive trade, President Xi Jinping has allocated a massive sum of $900 billion to fund a global initiative and one hopes that this treasure chest will be generating a positive multiplayer effect in a number of countries.  

This begs the question - how can Malta stand to gain in this Chinese initiative?  Can Malta succeed in attracting Chinese investment to set up an extension of their R&D initiative into Europe following the renewal of the MOU signed in Shanghai? This is not a self-centred pipe dream. Just consider how Malta attracted substantial investment through Shanghai Electric to convert the ageing Delimara power station to run on modern technology using LNG.

The news that tenders will be issued for the commencement of a 13 kilometre subsea tunnel comes at a propitious time. It is rumoured to be broadly linked to an island-wide land reclamation policy. The resource of a million tons of debris excavated as a result will provide the building material for extending man-made islands in strategic places. Such reclamation attempts were frequent in the past but now the need for spatial living space is becoming more pressing.  Naturally, such projects need to be self-financing - that is they are sustainable for attracting inward investment.  

In conclusion, can our country, albeit small and lacking indigenous materials, rise to the occasion and surf gloriously over the tide to seize this opportunity?  Perhaps, following the misadventure lashed at him during the EU top job nominations, Muscat can grasp the nettle and exploit opportunities that the Silk roadmap is offering. Think big - never look back.

George Mangion is a senior partner of audit and consultancy firm PKF Malta, and has over 25 years' experience in accounting, taxation, financial and consultancy services. His efforts have seen that PKF Malta has been instrumental in establishing many companies in Malta and has placed the firm at the forefront of professional financial service providers on the island.