UAE can play unique role in China-proposed "Belt and Road" initiatives: officials
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E-mail Xinhua, April 14, 2015
The United Arab Emirates (UAE) has recently joined the Beijing-championed Asia Infrastructure Investment Bank (AIIB) as a founding member.
The Gulf Arab state has also been trying to play a unique role in China's "Belt and Road" initiatives by expanding its industrial free zones and markets.
Dubai, rich in business hubs like ports, airports and industrial free zone, is considered the gateway to global trade of UAE's seven sheikhdoms. For years, UAE has been the largest export market for China in the North Africa and West Asia region.
Mohammed Al-Gergawi Fahad Al-Gergawi, CEO of Dubai's foreign direct investment office, said the UAE had itself "perfectly positioned" to be part of the new belt and Road initiatives, which have been put forward by Chinese President Xi Jinping.
"Dubai has a supportive business environment... and that makes the emirate attractive regarding perspective for the new silk road," said Alison Burns, regional head of precious metals for the Middle East and North Africa at ICBC Standard Bank in Dubai. Standard Bank has been a long-time market participant, bringing producers of physical gold in Africa and buyers in Central and East Asia together.
In relation to logistics and transport, Dubai international airport became last year the world's busiest airport in terms of international passengers, catering 71 million people. Its capacities will be expanded this year to serve 90 million passengers.
Some 90 percent of passengers flying to Dubai use the city as a hub for connecting flights as the emirate is located strategically between Africa and Europe on the one hand and central and East Asia on the other hand.
"From Dubai, you can indeed reach two thirds of the global population within two hours flight time," said Paul Griffiths, chief executive of Dubai airports.
Sir Tim Clark, president of Dubai's state-owned carrier Emirates Airline, told Xinhua he would like to fly to more cities in China, Xi'an, capital of Shaanxi province, could be an interesting destination for connecting Dubai to tourism and trade in central China, he said. Xi'an was in ancient times the starting point of the old silk road.
As of now, Emirates flies with an Airbus A380 super-jumbo to Beijing and Shanghai, as well as Guangzhou. Since Etihad Airways from Abu Dhabi started flying to Bejing in April 2008, the state-owed carrier added direct flights to Shanghai and Chengdu to its network, while cargo flights go to Chongqing and Guangzhou.
Data compiled by global aviation body IATA show that in 2015, Middle East air traffic growth in cargo and passengers outperformed global growth mostly because the region's linking function between the continents and as a launchpad for traveling to the Silk road countries and the Far East in particular.
Other UAE projects that link the nations along the silk road are the ports Jebel Ali in Dubai and Kizad in Abu Dhabi. Kizad, which stands for Khalifa industrial zone Abu Dhabi, was opened in the fall of 2012 and is slated to become a vital part of Abu Dhabi's strategic plan 2030, to diversify the economy away from oil and to link Africa with the "Belt and Road" countries.
Dubai's Jebel Ali, on the other hand, harbors the biggest man-made container port in the Middle East as well as the headquarters of Dubai Ports (DP) World, the word's third biggest port operator.
"Expansions currently underway at the port will bring total handling capacity to 19 million TEU in the second half of 2015," said DP World chief operations officer Mohammed Ali Ahmed. He added that Jebel Ali will be able to handle 10 of the giant new generation vessels at the same time, the only port in the region able to do so.
DP World shares are listed on the Nasdaq Dubai, the only international capital market in the Middle East by regulatory standards. The Nasdaq Dubai as part of the financial free zone DIFC aims to play key role in the UAE's shift to the east as well and to build financial bridges between Africa and the road and belt.
The DIFC which harbors 22 of the biggest banks in the world managed to attract the four Chinese bank giants, ICBC, Agricultural Bank of China, China Construction Bank and Bank of China. DIFC governor sees the center perfectly located to catalyze funds to finance projects along the road and belt region, he said.
The DIFC is also home to the Dubai mercantile exchange, the only international exchange for crude oil derivatives. Its strong growth since inception in 2007 is mostly based on attracting oil-related firms from Asia which aim to hedge their assets against fluctuations on the oil market.
The Dubai multi commodities center or DMCC is another free zone that helps serve Dubai's role as a regional hub.
Ahmed Bin Sulayem, CEO of the DMCC, said that the number of registered firms reached almost 10,000, making it the biggest of the over 25 free zones in Dubai.
According to Michel Convers, vice president Africa and Middle East at global logistics firm Brinks, Dubai had "the most advanced storage and logistics facilities in the region for any kind of goods, precious metals.
"That is why we as logistics specialists are very positive about China's Silk road initiative, the AIIB and Dubai's future role" in the "Belt and Road" initiatives, he said.
According to the Dubai customs, China surpassed India as Dubai's biggest trading partner in 2014, when bilateral trade amounted to 175 billion dirhams ( 48 billion U.S. dollars), an increase of 29 percent compared to that of the previous year. Endit
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