Data Dominance: In Cyprus, A Chinese Outpost Inside the EU

In October 2015, two years after a banking crisis left Cyprus in desperate need of new financing, President Nicos Anastasiades visited China on a charm offensive, touting the Mediterranean island’s low tax rates, its European Union membership and its readiness to take part in China’s Belt and Road Initiative, BRI.

The floodgates opened, but there was nothing sporadic about the Chinese outlay.

Today, money from Chinese state-owned or state-linked corporations has penetrated the core of just about every key Cypriot sector, from real estate to natural resources, transport to aviation, all in the name of a transcontinental infrastructure project linking countries along the route of the old Silk Road.

Thanks in part to the BRI, China is set to surpass the United States as the world’s leading economy by 2028 and become the standout superpower heading into the ‘Fourth Industrial Revolution.’

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In Cyprus, according to BIRN’s findings, China now dominates the 5G networks and the island’s wider tech ecosystem, creating a key Chinese outpost inside the EU with potentially far-reaching consequences for data security and the independence of Cypriot – and by extension EU – foreign policy.

It is a state of affairs that contradicts US and EU recommendations and the island’s own claims to be pursuing a multi-vendor strategy.

5G underpins power grids, transportation and water supplies, and, in the future, will enable military tools including artificial intelligence, said Carisa Nietsche, associate fellow for the Transatlantic Security Program at the Washington-based Centre for a New American Security.

“In extreme cases, analysts suspect China could pull the plug on the network, gather intelligence from data pulsing through the networks or cut off a 5G-enabled energy grid,” Nietsche told BIRN.

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