Abu Dhabi: The UAE is set to play a big role in China’s Silk Road initiate — also known as Belt and Road project — due to the good infrastructure available in the country, a senior official from the Ministry of Economy said.
“We have more sophisticated infrastructure that’s why China uses UAE as a hub for their goods to other regions. This will also help their initiative (Belt and Road) to move through the UAE,” said Juma Mohammad Al Kait, assistant undersecretary for foreign trade affairs at the UAE’s Ministry of Economy, while speaking to Gulf News.
The comments come following China and the UAE signing of a memorandum of understanding (MoU) for joint cooperation on the Silk Road Initiative and the 21st Century Maritime Silk Road Initiative to boost investment and trade to coincide with the three-day visit of Chinese President Xi Jinping to the UAE which ended on Saturday.
Elaborating further he said, “We are not just talking about road, sea transport to increase trade but we are also talking about air. China established a strong presence in Al Maktoum airport for the transport of goods to other regions. We are also talking about how to develop this initiative in digital sphere.”
He also said more than 22 per cent of Arab-Chinese trade is coming to the UAE and 30 per cent of China’s exports to the Arab world goes through the UAE.
The Belt and Road Initiative announced by the Chinese President Jinping in 2013 is an ambitious strategy designed to drive trade and capital flows between the east and west.
The project aims to connect cities in more than 65 countries across Europe, Asia and Africa via two trade routes — an overland route connecting Europe and the Middle East to China by way of Central Asia and a maritime route that connects China, South East Asia, India and Africa.
The routes alone represent approximately 4.4 billion people, or about 63 per cent of the world’s population and 29 per cent of global GDP, HSBC said in a report.
China is also inviting other countries to join the project including Latin American and Caribbean countries.
Kyle Boag, Regional Head of International Subsidiary Banking, HSBC MENAT said that Belt and Road initiative will benefit the UAE and the region in boosting investment and trade.
“The UAE and China are already significant trading partners, with around $53 billion (Dh194.51 billion) of trade between the two countries. A lot of that is then re-exported into Europe and Africa. The President’s visit and MoUs signed reaffirms the importance of the relationship and of the UAE in the region.”
Not only does the UAE present a significant amount of opportunities for businesses, but it is also seen as a gateway into other countries, he added.
“It is a strong financial hub and is very business friendly. There are a number of initiatives around the country and the region where Chinese businesses can collaborate and showcase their strengths.”
Meanwhile, Dubai International Financial Centre (DIFC) announced on Saturday that it has signed a Memorandum of Understanding with China Everbright Group to collaborate opportunities related to Belt and Road Initiative.
Abu Dhabi Global Market (ADGM) also approved the first Chinese state-owned financial services firm to be established in the financial centre to provide strategic investment and financial support to Chinese enterprises as part of the Belt and Road project.
The state-owned financial services firm, known as the Industrial Capacity Cooperation Financial Group Limited (ICCFG), is the first of such Chinese financial services firm to be approved by the Financial Services Regulatory Authority of ADGM, to conduct the regulated activities of providing and arranging credit via the ADGM platform.
In a separate announcement, DP World said it signed an agreement with the Zhejiang China Commodities City Group to jointly construct a new ‘Traders Market’ at Jebel Ali Port and Free Zone in Dubai on a total build up area of three million square metres to provide further impetus to China’s Belt and Road Initiative.
The market will include clusters of traders from all over the world, offering a wide range of products at one site.
“We look forward to working with the Zhejiang China Commodities City Group and will continue to support China’s Belt and Road initiative and innovate for mutually beneficial development,” DP World Group Chairman and CEO, Sultan Ahmad Bin Sulayem said.