Dubai-Linyi link to herald growth
A preliminary agreement signed between Dubai and Linyi could result in about $5bn of projects
A preliminary agreement signed by Dubai Economic Council (DEC) and the city of Linyi, in the Chinese province of Shandong, is expected to generate billions of dollars-worth of investments for the emirate and China.
About $5bn-worth of projects in either Dubai or Linyi have been identified that could benefit from this partnership. Targeted sectors include maritime services, infrastructure and recycling, as well as support for small-to-medium-sized businesses. If successful, the agreement could spawn similar deals with other Chinese business hubs such as Shenzhen, Hong Kong and Beijing.
The memorandum of understanding (MoU) signed last week will also have the backing of the state-owned policy bank, China Development Bank. DEC had signed a MoU with the development lender earlier this year.
The Dubai-Linyi deal is a sign of how important China is becoming as a trade and investment partner for the emirate. Trade between the two cities grew by 19 per cent to AED31bn ($8.4bn) during the first quarter of 2013, compared with AED26bn in the first quarter of 2012.
China is also supporting the construction of an oil refinery in Dubai, following a deal struck in September between China Sonangol – a joint venture of Angola’s state oil company Sonangol and Hong Kong-based New Bright International Development – and the emirate.
Several Chinese banks such as Industrial & Commercial Bank of China and Bank of China, have also set up operations in Dubai.
Demand for investment in the emirate’s infrastructure sector is set to grow in the coming year, especially if it wins the right to host the Expo 2020. China will play a vital role in meeting this demand.