Chinese banking assets grow as trade with UAE deepens

08 March 2018
Dubai in particular has been keen to position itself as part of Beijing's One Belt One Road initiative

Chinese New Year was widely celebrated in Dubai this year. With Chinese families traditionally heading home for Chinese New Year, the festivities were largely aims at the resident Chinese population in the UAE.

The growing Chinese population in the UAE reflects the increasingly important role that Chinese companies are playing the local economy. Dubai in particular has been keen to position itself as an important destination on Beijing’s One Belt One Road initiative as its expects outward investment from China to play an important role in the global economy in the future.

Today, large state-controlled construction companies are tackling some of the UAE’s largest projects, such as the Hassyan power station scheme in Dubai, while an even larger number of smaller privately held companies are engaged in almost every sector of the economy – supported by recently signed agreements for Chinese enterprise zones in Dubai and Abu Dhabi.

These companies not only ply their trade in Dubai. They also serve the rest of the GCC and the broader region, which includes Africa.

These Dubai-based operations need financial support and Chinese banks are using the Dubai International Financial Centre (DIFC) as a base. Since 2014, the assets held by Chinese banks in the DIFC have grown from $11bn to $33bn and this trend is expected to continue.

The upward trajectory will help the DIFC achieve its growth targets of tripling the size of the financial free zone by 2024, and as Chinese trade with the UAE increases it is set to become an important driver for future economic growth.

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