UAE can play banker to China’s growing overseas ambitions, says Stanchart

China plans to invest US$1 trillion in infrastructure projects in countries along its main trade routes over the next 10 years

The Nanjing Yangtze River Bridge. Chinese companies are bidding aggressively to develop infrastructure overseas, such s in the Middle East and Africa – and the UAE wants to take part in those projects’ financing. Liu JianhuaShow less

The UAE can play a key role as a financial hub in China’s US$1 trillion One Belt, One Road strategy, according to a senior Standard Chartered executive.

The economic strategy unveiled in 2013 aims to boost trade and productivity between China and Eurasian economies extending into East Africa and Europe.

Stephen Priestley, the head of the lender’s regional corporate banking division, said the UAE was well positioned to benefit from being a conduit for trade flows between China and other economies, including many ­African nations.

“On the east coast of Africa, there are Chinese companies building railways, building roads, bidding on port developments and bidding to build power,” said Mr Priestley at an event held as part of the bank’s roadshow promoting the initiative. “But it’s quite early days. Our belief over the next two years is that you are going to see numerous examples of infrastructure developments led by Chinese companies.

He said that China is planning to invest about $1tn in infrastructure along these trade routes over the course of the next decade.

“Financing trade flows through the UAE using renminbi and the Chinese banks based here is something we expect to build over the coming years,” he said.

In September, Standard Chartered began direct trading between the UAE dirham and the renminbi, also known as the yuan. It also initiated trading between the renminbi and the ­Saudi riyal.

Henry Zhang, Standard Chartered’s head of corporate and institutional banking for China, described One Belt, One Road as “the next stage” of China’s growth plans after a 30-year per­iod of developing capital and knowledge of infrastructure benefits in its home markets.

“Many of these countries along the belt and road have a strong demand and urgency agenda to develop infrastructure,” he said. “They need expertise and they need money.”

Mr Priestley said that “every country on the belt will have a different reaction” to the initiative, but that in the Middle East he also foresaw considerable Chinese participation in ­Saudi Arabia’s 2030 Vision and its National Transformation Plan (NTP), as well as reciprocal ­Saudi investments in China.

“The 2030 vision talks a lot about privatisations and building more capacity in power plants, in ports. Our anticipation is that you are going to see a lot of Chinese contractors looking to bid aggressively into that whole 2030 Vision and the NTP,” he said.

There is already some evidence of substantial Chinese investment proposals into Middle East countries. Last month, China Fortune Land and Development (CFLD) said it would build a new 70 square kilometre industrial city in Egypt’s new admin­istrative capital.

The project, which is reportedly worth $20bn over 10 years, will involve the firm designing, building and managing the new city. It is expected to start on site next year, and be the first of a number of new industrial cities planned by CFLD under One Belt, One Road.

It also has agreements in place to develop industrial cities in India and Vietnam.

Zhao Hongjing, the president of CFLD International, said the deal was “of great significance to deepening China-Egypt industrial capacity cooperation and promoting regional economic development”.

CFLD's deal followed a 50-year agreement signed in Oman in May for a new, $10.7bn indus­trial city in Duqm. It is being built by a public-private consortium of firms from China's Ningxia region.

Follow The National's Business section on Twitter