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Malta: China’s satellite state in Europe

Chinese President Xi’s first phone call to a European leader in 2022 was not to Boris Johnson, nor the EU’s unofficial head Emmanuel Macron, it was not even his ‘old friend’ Vladimir Putin. The man on the receiving end of Xi’s invitation to visit China later this year was George Vela, President of the Republic of Malta.

The call marked 50 years of Malta and China’s blossoming relationship, but why do China hold a small island nation with a population the size of Manchester in such high esteem? The answer lies in a shady combination of money and power. Look hard enough and a blood-stained paper trail appears from the sunny shores of Valletta stretching back to Beijing.

Over the past half century, China has found an unlikely but invaluable ally in Malta. A geopolitical gem, Malta is China’s window of influence into the European Union, the United Nations and the Commonwealth. In 2020 it was even alleged by Belgian intelligence services that Malta’s embassy opposite the European Commission’s headquarters in Brussels was in fact being used as a Chinese ‘spy tower’.

In return, Malta receives a prosperous and keen source of foreign investment with roots stretching back to the 1975 Beijing funded Red China Dock – which remains the largest drydock in the Mediterranean. More recently Malta reaped the rewards of being one of the first European members of the Belt and Road Initiative.


Aside from the Chinese vanity projects, such as the first of its kind ‘China Cultural Centre’ in Valletta and a 5 storey embassy greenlit for construction in 2020, Beijing has pumped money into clean energy ventures including ambitious plans for the island of Gozo.

The Chinese state-owned ‘Shanghai Electric Power’ has held a third of Enemalta, Malta’s only domestic energy supplier, since 2014. This deal came back to bite the Maltese people back in 2020 as China’s sizeable stake prevented Malta’s government from slashing its energy tariffs at the height of pandemic. However, with bilateral trade rising by almost 60 per cent last year despite the impact of Covid, feelings of public discontent have been overlooked.

Malta has repeatedly gone out to bat for China on the international stage in recent times. In June 2021, Malta was one of four nations to refuse to condemn China’s human rights abuses in Xinjiang. President Vella’s call with Xi resulted in a pledge to back China in dealings with the UN which will prove vital if tensions flare up over Taiwan.

Of course, China will never publicly acknowledge the advantages gained from any back door influence as showcased by the innocent-sounding propaganda that appears in the Maltese media. Just this week a Times of Malta OpEd penned by Yu Dunhai, China’s Maltese ambassador, offered reassurance that “China would always be there when a friend needs help, without reservation, self-interest or strings attached.”

Malta’s political system is beset with issues of corruption and unsurprisingly Chinese fingerprints can be found all over it. The controversial ‘golden passports’ scheme, devised to sell citizenship to wealthy foreigners, is heavily favoured by Russian and Chinese oligarchs. The appropriately named ‘Shanghai Overseas Chinese Exit-Entry Services’ is a firm warranted by the Maltese authorities to sell these ‘golden passports’ into the EU. Malta is effectively prostituting itself to foreign powers looking to increase their benign influence in Europe.

The most shocking case of Chinese corruption was displayed to the world in 2017.

Daphne Caruana Galizia was an investigative journalist on the scent of Chen Cheng, a Chinese businessman who negotiated deals between Malta and the aforementioned ‘Shanghai Electric Power’. Chen also has links to Mao Haibin, who operates China’s end of the ‘golden passport’ scheme.

Galizia was fast uncovering a series of corrupt dealings between Cheng, Keith Schembri – the Chief of Staff to then Maltese Prime Minister Joseph Muscat, Konrad Mizzi – a government minister, and Yorgen Fenech – who ran a Dubai based firm used for money laundering. She was assassinated by a car bomb in October 2017.

Fenech is now on trial for ordering her assassination. Keith Schembri has been charged with corruption, while the US state department has placed a travel ban on Mizzi. Cheng has not been directly accused of involvement.

A rotten apple under the thumb of foreign entities, Malta will make little progress fighting corruption under these self-inflicted conditions. Locked in the iron embrace of Eastern superpowers, a total overhaul of the current political system is perhaps the only escape route.

Prime Minister Robert Abela has done little to unravel the country’s shroud of corruption. The opposition Nationalist Party has dubbed Malta a ‘mafia state’ and have tried to implement the reforms recommended by the inquiry into Galizia’s murder. This was shot down by Abela’s ruling party.

With rumours swirling of an election in March, we could yet see a change in government will by no means lead to a reset in Chinese relations. Opposition leader Bernard Grech also harbors Chinese sympathies having met with Yu Dunhai as recently as last year.

An immediate fix feels hopelessly out of reach.


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