ABU DHABI, 20th July, 2018 (WAM) — As the first Gulf country to forge a strategic partnership with China, the UAE has enjoyed a prosperous financial cooperation with China over many years.
The bilateral economic and financial relations between the two countries are also expected to create further opportunities for cooperation between Gulf countries and China, according to the China News Agency, Xinhua.
In December 2015, the UAE and China launched a US$ 10-billion joint investment fund, which focusses on traditional energy, infrastructure development and high-end manufacturing industries.
The fund, whose first phase saw an investment of $4 billion, represents progress in the economic cooperation between the two countries. It is also helping to promote Sino-Arab relations and facilitate global cooperation in manufacturing.
The fund has further enhanced the close ties between the UAE and China, said Dr. Sultan bin Ahmad Sultan Al Jaber, UAE Minister of State.
As a founding member of the Asian Infrastructure Investment Bank, AIIB, the UAE supports China’s “Belt and Road Initiative,” and is working with China to promote trade along the initiative’s route, to boost local economic growth, he added.
The Industrial and Commercial Bank of China, ICBC, the China Construction Bank, CCB, the Agricultural Bank of China, ABC, and the Bank of China, BOC, have all established branches in the UAE, to provide financial support to China investments and local enterprises.
The ABC established its RMB clearing services in the UAE while the ICBC has become the largest bond issuer in Nasdaq Dubai.
The Dubai Gold and Commodities Exchange is the first foreign market to use the new yuan-based gold fix, the Shanghai Gold Benchmark Price, to develop derivative products.
The Silk Road Fund, founded in December 2014, has been financing major infrastructure projects in Dubai, including the $100 million “Dubai Hassyan Clean Coal Power Project,” which also received an investment of $50 million from China’s Harbin Electric Corporation.
The project has also been financed by an international consortium of banks with $2.5 billion, in which Chinese banks contributed about 78 percent.
The power plant, the first of its kind in the Middle East, will start operating in 2020, to support the World Expo in Dubai. It is expected to be fully completed by 2023.
The project is proof that Chinese enterprises and banks can compete in the international high-end market, said Xu Jiaji, Deputy General Manager of BOC Dubai.
As a regional hub of trade, finance, logistics and tourism, and with its advantageous location and policies, the UAE now leads the Gulf region in seeking closer cooperation with China.
The UAE is China’s second-largest trading partner and its largest destination of exports in West Asia and North Africa while China has been the UAE’s largest trading partner for several consecutive years.
In 2017, their bilateral trade reached a value of $41 billion, a 1.06 percent increase from the previous year.
In 2016, the UAE invested over $2.1 billion in China, topping the list of Arab countries. At the end of 2015, China’s foreign direct investments in the UAE reached a value of $4.6 billion.
The UAE has signed several agreements with China, including a currency swap deal, and is involved in the “RMB Qualified Foreign Institutional Investor Scheme.”
The number of Chinese visitors to the UAE exceeded 1 million in 2017. In January this year, the UAE became the 11th country to sign a mutual visa-exemption agreement with China for standard passport holders.
He Song, Economic and Commercial Counsellor at the Chinese Embassy in the UAE, said that the UAE and China can further strengthen their industrial and financial cooperation, with the support of the Silk Road Fund and other funding and insurance programmes.
Major infrastructure, energy and industrial projects will also encourage future bilateral cooperation, he added.