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Tue 6 Oct 2015 03:27 PM

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Exclusive: Bahrain to create China-focused logistics hub

Plan follows trio of investment deals between Bahrain and Chinese companies last month

Exclusive: Bahrain to create China-focused logistics hub

Bahrain’s inward investment agency has signed three deals with Chinese companies to establish operations in the kingdom.

One agreement in particular could facilitate the creation of a new logistics hub for Bahrain adjacent to the under-construction Dragon City scheme, a 15,000 square metre Chinese-themed shopping mall in Muharraq, Arabian Business has learned.

The Bahrain Economic Development Board (EDB) signed a letter of intent with China’s Worldwide Logistics to establish a presence in Bahrain, during a business trip to the Far East last month.

Worldwide Logistics Group is headquartered in Shanghai and provides shipping and logistics services, including sea, air and rail transportation, customs brokerage, warehousing, terminal handling, shipping agency, freight and cargo handling.

The group has 30 branches across China but no global offices at present, according to its website.

In an interview with Arabian Business last week, EDB chief executive Khalid Al Rumaihi said that, either way, the move would open up an opportunity to build a major new logistics zone targeting Chinese companies seeking to tap into the fast-growing Gulf market.

“There are around 1,000 Chinese expats living in Bahrain at present, around 6,000 are expected by the end of next year and more living further afield in the Gulf. This is potentially a large market to tap into,” he said.

It has yet to be decided if the new zone would be aimed solely at assembling and distributing Chinese products in the Gulf, or manufacture them in Bahrain, too.

Already 500 retailers have signed leases at Dragon City ahead of its official opening in December. However, it is understood that World Wide Logistics will monitor the success of the new mall before making a final decision on whether to open up in Bahrain.

Meanwhile, the EDB is in early talks with the Bahraini landowner of the site adjacent to Dragon City over future redevelopment plans.

Two other letters of intent were signed during the delegation to China last month – with Jinlou Water, a utilities firm based in Shandong Province, and Baoshang Bank, an ‘A’ level credit rated bank headquartered in the Chinese industrial city of Baotou.

The two companies are now in discussions with the EDB over plans to establish a presence in Bahrain.

Al Rumaihi said in a statement following the trip: “Huge opportunities can be made possible by closer cooperation between China and the GCC, two of the world’s fastest growing emerging markets.

“Bahrain has some of the most competitive operating costs in the region, minimal restrictions on foreign investment and ownership and a tried and tested regulatory environment, all of which has created a highly favourable environment for international businesses.

“The EDB looks forward to assisting many more Chinese companies to set up in Bahrain and take advantage of the benefits on offer here.”

A report by KPMG last November found that the cost of doing business in Bahrain is substantially lower than in both Dubai and Qatar – specifically, 35 percent and 46 percent less respectively.

Bahrain also has no restrictions on foreign ownership of companies in the kingdom.