Call for greater China-GCC

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Yang: hinted that ICBC will apply for a licence at Dubai International Financial Centre to capitalise on GCC growth

Investment activity between China and the Gulf is more important than ever, due to the global credit crisis and increased protectionism by Western states, according to speakers at the China-Middle East Investment Forum, held in Dubai.

HE Dr Omar bin Sulaiman, governor of the Dubai International Financial Centre (DIFC), said that annual trade between the GCC states and China currently stood at around US$45 bn, but said that this figure was likely to increase once a free trade agreement was finalised between the states.

Abdulaziz Sager, chairman and founder, Gulf Research Centre, said that both regions were extremely liquid, with the GCC holding a cash surplus of $186 bn this year, and China's surplus at $238 bn.

"What is happening, unfortunately, is that we are both sending it to New York," he said.

However, the panel agreed that the credit crisis in the US and European markets was likely to increase activity in Middle East and Asian capital markets.

Dr Nasser Saidi, chief economist, DIFC Authority, said: "We're seeing enormous potential for GCC investors who have tremendous surpluses to invest in China's markets. Both regions face barriers to investment outside."

The speakers agreed that Chinese investment would be crucial in helping Middle East countries develop infrastructure such as transport links and utilities, while China would need oil and gas exports from the Gulf to help fuel its growing industrialization.

Dr Jun Ma, managing director and chief economist for greater China, Deutsche Bank, told delegates that China currently accounts for 8% of global oil demand, but between 2002 and 2008 will account for around 34% of global oil demand growth.

Speaking at the forum, Yang Kaisheng, president of Industrial and Commercial Bank of China (ICBC), the largest commercial bank in China, hinted that the bank would apply for a licence in Dubai International Financial Centre (DIFC).

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