JEDDAH, 28 November 2004 — China is teaming up with the United Arab Emirates investors to bolster its business presence in the Middle East. Sinosure, a Chinese government agency, has signed an investment cooperation agreement with Dubai International Capital (DIC), the recently formed Dubai-based investment company. The agreement covers a wide variety of activities that will assist the Chinese government in encouraging its top companies to expand and invest internationally — particularly in the Middle East region.
The agreement was signed by the executive vice president of Sinosure, Liang Zhidong and the chairman of Dubai International Capital, Mohammed Al-Gergawi.
The Chinese government, with one of the fastest growing economies in the world — over 9 percent annually for the past 20 years — is looking for global expansion opportunities. For the last several years the State Council has made it a priority for Chinese companies to go abroad and develop international markets. There are a number of Chinese companies that have expanded successfully internationally, and the Chinese government would like to continue this trend through the agreement with DIC.
Overall, Chinese exports in 2003 stood at $440 billion and have been growing by more than 20 percent annually for the past seven years.
Sinosure, established in 2001, already has insured Chinese transactions of more than $6 billion and continues to grow. International benchmarks, which indicate that traditional export credit companies can insure around 10 percent of a country’s exports, suggest that Sinosure should be able to grow by over eightfold in the coming years.
Sinosure has been mandated by the Ministry of Finance and the State Council to actively seek to increase China’s export potential through local and international expansion.
China is seeking to leverage Dubai’s status as the business hub of the Middle East-North Africa Region (MENA) as well as India and the subcontinent.
As part of the agreement, DIC will have a first look at qualified Chinese companies seeking to expand internationally. As well, Sinosure will set up an office in Dubai to explore opportunities for Chinese companies interested in the region. DIC will have unprecedented access to top Chinese companies that are looking to expand globally. Sinosure and DIC also will explore setting up a dedicated fund for such opportunities in the near future.
Although, only 3 percent ($72 million) of China’s overseas investment is dedicated to the Middle East region, Sinosure intends to increase this exponentially in the near future. Areas of particular interest include trade, natural resources and manufacturing.
Through cooperation with DIC, Sinosure will encourage its enterprises to invest and operate in the Middle East and other regions internationally in areas where Chinese enterprises can create sustainable and consistent value for both sides.
“We view this as the beginning of a long-term, multi-faceted relationship between Dubai and China” Al-Gergawi said. “This agreement is indicative of the vision of Sheikh Mohammed to make Dubai one of the leading cities in the world of business, trade, tourism and overall quality of life.” “Dubai International Capital is excited about the opportunity to investigate prospective investments in China and in Chinese companies seeking to address the Middle East region and beyond,” said Sameer Al-Ansari, CEO of DIC. “We will work closely with the Chinese government to ensure that all our interests are aligned in this endeavor. “Dubai International Capital has agreed to assist the Chinese government in these activities to bolster the relationship between the two regions as well as source attractive investment opportunities from which both can benefit,” he said.
