Talks are ongoing to attract two more Chinese banks to Dubai International Financial Centre (DIFC) as the financial services hub reaffirmed its commitment to supporting China’s ‘One Belt, One Road’ (OBOR) initiative, it has been confirmed.
The unnamed banks would join China’s top four state-owned banks – Bank of China, Agricultural Bank of China, ICBC and China Construction Bank – which have upgraded their licences at DIFC to Category 1, expanding their presence from subsidiary to branch status.
DIFC said it has seen exponential growth in the presence of Chinese financial firms and state-owned banks in recent years.
According to its 2015 full year results, Chinese banks in DIFC have doubled their balance sheet in the last 18 months.
Inspired by the OBOR initiative, Chinese financial firms were increasingly active on DIFC’s global financial exchange in 2015.
Bank of China (BOC) listed a two billion yuan bond ($322 million) on Nasdaq Dubai in July 2015 to support cross-border trade and infrastructure activities, while Agricultural Bank of China (ABC), listed a 1 billion yuan bond ($163 million) in 2014.
Commenting on the growing importance of Chinese firms at the DIFC, Arif Amiri, CEO of DIFC Authority, said: “On our first visit to China this year, we are committed to building long-lasting partnerships with the emerging Chinese market. Contributing to a large portion of our business activity, we envisage an increasingly significant role for Chinese firms as we seek to become a leading global financial hub.”
As part of its 2024 growth strategy, DIFC has refocused its growth to encompass the latent potential of the fastest-growing emerging markets in the MEASA region and stimulate trade and investment flows along the South-South economic corridor.
With the objective of attracting more Chinese firms in the next 10 years, DIFC has aligned its South-South strategy with China’s OBOR initiative.
Asian firms continue to be an engine for growth accounting for 11 percent of the financial services companies within DIFC and 80 percent of the its incremental business activity.
Amiri added: “As China continues to invest in emerging economies across the MEASA region, DIFC’s conducive and supportive framework acts as a gateway for companies looking to expand their business interests and investments in these markets. Linking Asia to Africa and Latin America, Dubai is emerging as a crucial hub along China’s New Silk Road.”
In December 2015, Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, held official talks with President Xi Jinping to bolster strategic bilateral cooperation.
In addition to signing nine agreements, the two leaders witnessed the launch of a $10 billion UAE-China joint strategic investment fund, further contributing to OBOR’s objective of improving connectivity and cooperation with regional partners across Europe and Asia.
The bilateral trade between China and the UAE in 2015 was slated to reach $60 billion compared to $47.6 billion in trade volumes in 2014.