Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Tags: Insights
Abu Dhabi’s Khalifa industrial free zone (KIZAD) has attracted US$1bn in foreign direct investments from Chinese companies in under a year. According to UAE officials, this is expected to rise when the UAE’s new investment law is implemented, reports Gulf News.
15 Chinese companies have invested in KIZAD in the last year and KIZAD has signed a memorandum of understanding (MoU) with Bank of China in order to provide financing to local, international and Chinese companies setting up operations within the free zone.
This MoU will allow China’s fourth largest bank to provide various financial services such as loans, trade financing, international trade settlement and dirham clearing – all in support of China’s One Belt One Road Initiative (BRI). These Chinese companies and banks are maximising opportunities and leveraging their influence in the Gulf as several routes of the BRI run through the region.
“The UAE is one of the most important countries in building the One Belt One Road Initiative. Both the UAE and China are working together to coordinate their strategies,” said Gao Xiaoming, General Manager of Bank of China, Abu Dhabi, according to Gulf News.
The UAE hopes to implement a new investment law that will allow foreign companies 100 per cent ownership of companies outside of free zones in the UAE. The government hopes to implement this before the end of this year and expects it will encourage more Chinese firms to invest, according to He Song, economic and commercial counsellor, Embassy of China in the UAE. Currently, foreign companies can own only up to a 49 per cent stake in a company in the UAE, but are allowed 100 percent ownership in free zones.
The UAE is China’s largest non-oil trading partner and China is the UAE’s second largest trading partner, as well as the biggest exporter to the country. The UAE is also an important gateway hub for Chinese goods flowing to the Middle East, Europe and Africa, with 60 per cent of Chinese exports to regional markets flowing through the UAE.
This growing investment and openness of the UAE represents the increasing importance of trade and political ties between China and the Middle East.
