Arif Amiri, Chief Executive Officer, DIFC (Dubai International Financial Centre) Authority, explains why Dubai and China’s investment and development ambitions are increasingly interlinked the Belt and Road initiative provides a consummate opportunity for Dubai and China to strengthen an already robust engagement
China’s top four state-owned banks have a presence at DIFC. Why is it so important for them to have a presence in the freezone?
The DIFC is the natural choice for Chinese banks who want to do business in the Middle East, Africa and South Asia region and access the South-South trade corridor. We are the most established Financial Centre in the region and our clients appreciate a number of things that make it easy to do business. These include, a network of over 1,500 companies some of which may provide new business to the Chinese banks, the common law legal system that we have and the infrastructure that is conducive to doing business across multiple geographies.
We understand the Chinese market and the needs of Chinese clients. We have signed MoUs in China to increase the ease of doing business between DIFC and Chinese institutions, important for maximising opportunities and areas of working together.
What is DIFC’s value proposition – especially in relation to Chinese finance houses?
Let me start by saying that we are truly client focused. In developing the DIFC’s value proposition, we closely looked at creating a great environment to do business, committed to demonstrating innovation in developing the financial sector, creating a world-class infrastructure and are attracting the best human capital. Additionally, Dubai has a strong reputation for ease of doing business. We’ve been operating for over a decade and know that companies, including those from China, value these things.
When choosing the DIFC, they aren’t taking a risk – we are tried and tested. Independent rankings, such as the Global Financial Centres Index highlight our strengths and consistently give us the highest ranking for the region.
We can provide access to trade corridors for Chinese banks. Dubai is considered a gateway to approximately 60 per cent% of China’s merchandise exports to the Middle Eastern and African regional markets – some of the fastest growing and most dynamic in the region.
According to DIFC’s full-year results, Chinese banks in DIFC have doubled their balance sheets in the last 18 months. What is behind that growth?
Chinese banks are expanding rapidly, in part thanks to the development of the One Belt, One Road (OBOR) [also known as Belt and Road] initiative. Infrastructure, healthcare, education, transport, energy, construction and technology developments in the region are helping drive through new investments.
The ability to issue bonds on the DIFC markets and listings are also helping to raise new capital for investment into the region.
Chinese banks have been behind much of those various developments as well as investments into the broader region, where healthcare, education, consumer spending and massive government restructuring programmes from government are ongoing., which These demand capital, risk management and professional expertise.
How important has the Belt and Road initiative (and resulting infrastructure projects) been in encouraging greater activity by Chinese financial institutions on DIFC’s global financial exchange?
It is incredibly important.
Inspired by the OBOR initiative, Chinese financial firms continue to be active on DIFC’s global financial exchange. Just recently, the Hong Kong branch of China Construction Bank, which has a large branch in DIFC, issued a US$600m bond on Nasdaq Dubai. Four Chinese banks to date have raised such bonds on the financial exchanges in DIFC, contributing to the over US$11bn worth of bonds listed in Nasdaq Dubai alone.
Infrastructure, including transport, energy, construction, maritime services and aviation have been important areas for financing and expert support but we also have an increasing focus on the economic belt element of the strategy which looks at manufacturing and the development of other supporting services. DIFC is well positioned to support in this regard.
Connectivity, networking and partnerships are also an important part of the initiative and something DIFC and its financial exchange is perfectly set up to do as a dynamic ecosystem covering all areas of financial and professional services.
DIFC has aligned its South-South strategy with China’s One Belt, One RoadBelt and Road initiative. What does that mean and how will it help DIFC attract more Chinese institutions over the next decade?
Our 2024 strategy and focus on South-South trade corridors links directly to the One Belt One Road initiative.
Just consider that Dubai is considered a gateway to approximately 60 per cent of China’s merchandise exports. These exports go to Middle Eastern and African regional markets. By having a presence in the DIFC, it will become easier for Chinese businesses to manage their clients and exports in these markets and hopefully capture more business.
Chinese institutions should be confident that we will continue to build on our proven capabilities by cooperating further on regulation and standards, deepening networks and thought leadership in key sectors on behalf of our firms and finding more ways to do business in these markets.
How important is the Chinese financial community for DIFC’s own long-term ambitions?
China is a key market for the DIFC. We can help Chinese companies to prosper and in turn that will support the growth of the DIFC.
Banks, asset management companies and capital markets are an area of focus. There is also enormous potential for fintech, law and insurance firms to grow their presence here.
I should point out that the DIFC isn’t just for fFinance and professional services companies. Oil giant PetroChina International (Middle East), CMEC Thar Mining Investments Limited, ZTE Corporation and Shanghai Electric Investment make up the rest of the eight Chinese firms based at DIFC, making this an important hub for all industries interested in the Middle East and African markets.
The ‘One Belt, One Road’ initiative provides an unparalleled opportunity for China and the UAE to deepen their all-round engagement. The DIFC is pleased to be supporting this initiative and the economic growth of both China and the UAE.