Developing Economic Ties With China Takes Centre Stage at DIFC



“Developments Along the New Silk Road - Venturing with and Investing in Chinese Companies” hosted in collaboration with Latham & Watkins

The Dubai International Financial Centre (DIFC), the financial and business hub connecting the region’s emerging markets with the developed markets of Europe, Asia and the Americas, today hosted “Developments Along the New Silk Road - Venturing with and Investing in Chinese Companies”, a high-profile conference in collaboration with Latham & Watkins. The event, held in partnership with Falcon Associates and Financial Times, took place in DIFC’s Conference Centre on Tuesday, 6th December 2011. It discussed the two-way trade & investment routes between the Middle East and China, and the means to deepen financial and economic relationships between the two regions.

The UAE is one of China’s top two trade partners in the Middle East, with bilateral trade expected to reach US$ 100 billion by 2015. Around 4,000 Chinese companies are operating in the UAE, utilizing the country’s favourable business environment to tap into new markets across the Middle East and Africa, while Dubai is home to 150,000 Chinese residents.

Opening the conference, Abdulla Mohammed Al Awar, CEO of DIFC Authority, said: “As the west decreases as a global superpower and primary consumer, new trade and capital market connections is seeing the emergence of a New Silk Road, led by China. This new road could see trade between Asia, Middle East, and Africa eclipse trade between developed nations and emerging nations, or even among developed nations.”

He added: “With the shift of global power to the East, I believe that DIFC is in a unique position to continue to contribute to the strong trade and investment links between Asia and the Middle East. We have been connected for centuries, let us revive the old and also start something new!”

Dr. Nasser Saidi, Chief Economist at DIFC, said: “The timing for such an event couldn’t be better. From the Great Financial Crisis a new global economic & financial geography is emerging. Today, the Middle East is the biggest exporter of crude oil and China is the biggest importer. , Over the past decade China has become the major trade partner of the GCC countries. A number of strategic initiatives are required in order increase the economic and financial integration and partnership between the GCC and China for the benefit of both parties. In particular, we need to re-orient our banking relationships towards Asia and China and the MENA and GCC countries need to prepare themselves for the coming of the Redback as a third global currency.”

Financial experts from leading regional and international companies discussed investments in China’s most promising sectors and the main drivers of China’s massive investments in the Middle East and Africa, and also debated whether China will take the necessary steps to allow the globalisation of the Renminbi. As part of the discussions on this topic, Dr. Saidi issued DIFC Economic Note 18, titled “The Redback Cometh: Renminbi Internationalization and What to Do About It”.

He added: “Despite the growing economic & financial international role of China, its currency, the Renminbi (RMB) remains largely a domestic currency. There are increasing calls for the RMB to become an international payment, investment and reserve currency. However, the move towards internationalisation necessitates the development of an onshore capital market complemented by domestic policy reforms leading to a changed financial structure, with lower dependence on bank financing”.

A separate session at the conference looked into China’s global leadership in the green energy sector, and the opportunities for Middle East companies to joint venture with China on renewable technologies.

Private equity firms were also able to get valuable insights on how to get deals done in China through a dedicated session by leading industry professionals. In addition, the conference shed light on China’s long-term prospects, its potential transformation from an export and investment-driven to a consumer driven growth model and the underlying challenges it could face.

The conference also highlighted the UAE’s position as China’s gateway to the Middle East and Africa, and looked at Dubai’s role as a regional hub and what it really means to Chinese firms.

Speakers at the event included David Miles, Chair of Asia Practice, Latham & Watkins, Hong Kong; Abdul Kadir Hussain, Head of Asset Management, Mashreq; Marios Maratheftis, Head of Research, Standard Chartered Middle East; Xiaodong Zhou, General Manager, Abu Dhabi Branch, Industrial and Commercial Bank of China (Middle East) Limited; Rowland Cheng, Office Managing Partner, Latham & Watkins, Shanghai; William Chen, Managing Partner, DT Capital Partners; Olivier Glauser, Co-founder, Board Member, CFO, Shankai Sports; James Kralik, Chief Executive Officer, Linden Street Capital; Matthew Miller, Managing Director, Peach Tree Far East Advisory; Mark McFarland, Emerging Markets Strategist, Emirates NBD; Villiers Terblanche, Office Managing Partner, Latham & Watkins, UAE & Qatar; Aaron Bielenberg, Senior Associate, Latham & Watkins, Dubai, and Co-Founder, Clean Energy Business Council ─ MENA; Faisal Rabee Al Awadhi, Director Demand Management, Supreme Council of Energy; Vahid Fotuhi, Director, BP Solar; Robin Mills, Head of Consulting, Manaar; Ian Zhu, Principal – China Environment Fund, Tsing Capital; EAllen Wang, Office Managing Partner, Latham & Watkins, Beijing; Chih Cheung, Managing Partner, C2 Capital Limited; Francis Killory, Vice President – Development in Asia Pacific, Jumeirah Group; Bryant Edwards, Chair of Middle East Practice, Latham & Watkins, Dubai; Stanley Chow, Partner, Latham & Watkins, Hong Kong; Nicholas Levitt, Head of Commercial Banking, HSBC Bank Middle East Limited.

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