Gulf states urge China to 'reconsider its position'


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ABU DHABI // The Arabian Gulf states yesterday again urged China to reconsider its stance on Syria.

At the first Sino-Gulf strategic dialogue forum last year both parties agreed to consult before any action was taken on the issue.

But Beijing has three times vetoed United Nations Security Council resolutions on Syria.

"We strongly hope the People's Republic will reconsider its position on Syria and come in line with historical Chinese positions towards Arab issues," Dr Abdel Latif Al Zayani, secretary general of the Gulf Cooperation Council, said yesterday.

Dr Abdul Aziz Al Uwaisheq, assistant secretary general for negotiations and strategic dialogue at the GCC, said the council had been surprised by China's use of its Security Council veto.

"We had an implicit agreement that the strategic dialogue would include discussion about the Syrian cause and we had tackled the subject and agreed to consult. However, after the Security Council position taken, we have not met for further dialogue because we could not continue without resolving that issue," he said.

The Chinese government attempted to explain its position in a letter to the GCC, Dr Al Uwaisheq said. "We received a letter from the Chinese government but did not feel that the reasons given conformed with what we have agreed to before."

During the UN General Assembly in New York this year, a meeting took place with China's foreign minister Yang Jiechi, but this also brought little progress on the issue. As a result, a strategic dialogue forum scheduled for November 7 in Beijing was delayed by the GCC.

"As you know, it is difficult for the GCC countries to continue the strategic dialogue unless we solve this problem," said Dr Al Uwaisheq. "The GCC countries will not be able to have any stake in issues relating to China unless they deal with the Syrian cause."

Responding yesterday, the chairman of the Environmental Protection and Resources Conservation Committee of the National People's Congress, Mao Rubai, said China does not interfere in the internal policies of other nations.

"China-GCC relations are improving and we pay great attention to them, as we have increased visits between the two blocs, but China respects the internal policies of other nations, and respects and supports the work by the UN, the Arab League and the African Union to solve the regional and international problems," he said.

His position echoed a statement last month by Chinese foreign ministry spokeswoman Hua Chunying, who said: "China believes that political dialogue is the only right way to resolve the Syrian crisis and the political transition process led by the Syrian people should be launched and promoted at an early date."

The Syrian issue was raised at the China-GCC Sustainable Development Forum in the capital yesterday. Since a free-trade agreement was signed between China and the GCC in 2002, trade between the two has increased 13 fold.

Dr Al Zayani said trade this year reached US$131 billion and continued cooperation would create "a formidable relationship between the two rising forces of the 21st century".

The financial crisis, climate change, food security, energy security issues and the new regional conflicts pose challenges were also on the table at the one-day forum.

Wang Zhizhen, vice chairwoman of the National Committee of the Chinese People's Political Consultative Conference, told the forum: "We have to have place our efforts in the highest levels to strengthen mutually beneficial cooperation and friendly relations among nations to build a secure and harmonious world."

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”