The agreement is aimed at accelerating trade between China and the UAE, reflecting China’s ‘Belt and Road’, of which China Pakistan Economic Corridor is the flagship, and the ‘Maritime Silk Road’ initiatives.
Irshad Salim — Five Chinese companies will start operations in Abu Dhabi’s industrial zone with an initial investment of $300 million in a boost for the oil-rich emirate’s economic diversification plans.
The move comes as UAE and China move forward with their joint strategic investment fund worth $10 billion set up in late 2015, financed equally by both countries aimed at accelerating trade between the two countries, reflecting China’s ‘Belt and Road’ and ‘Maritime Silk Road’ initiatives.
The companies, from Jiangsu province on China’s east coast, are involved in sectors ranging from power and metals to natural resources and banking, Abu Dhabi officials said.
Chinese companies are increasingly seizing opportunities in the Gulf as the Asian economic giant seeks to expand overseas with its ambition to rebuild Silk trade routes.
Abu Dhabi Ports has signed a 50-year agreement with the Jiangsu Provincial Overseas Cooperation & Investment Company (JOCIC) to take a lease on 2.2 square kms (0.8 square miles) at the Khalifa Industrial Zone Abu Dhabi (Kizad), Mohamed Juma al Shamisi, chief executive of Abu Dhabi Ports, told Reuters.
OCIC will in turn sign separate agreements with the five Chinese companies, he said.
The firms are Hanergy Thin Film Power Group, Jiangsu Fantai Mining Development (Group) Co Ltd, Xuzhou Jianghe Wood Co, Jiangsu Jinzi Environmental Technology Co and Guangzheng Group .
Abu Dhabi Ports Co manages Kizad as well as the ports in the emirate.
“The foreign direct investment into industry will contribute positively to Abu Dhabi’s non-oil GDP and help in diversifying the economy from oil,” al Shamisi said.
Last year, China’s Cosco Shipping Ports Limited won a 35-year concession to build and operate a new container terminal at Abu Dhabi’s Khalifa Port in the capital of the United Arab Emirates. Cosco, at the time said it planned to invest over $700 million.
According to al Shamsi, the lease agreement is the biggest yet signed at Kizad which has a total area of 100 square kilometers.
Jiangsu province is one of China’s major exporters and the agreement is aimed at accelerating trade between China and the UAE, as the former seeks regional hubs and trading partners in its ‘Belt and Road’ and ‘Maritime Silk Road’ initiatives.
Kizad, which opened in 2012, had attracted investments of around 55 billion $15 billion by the end of last year from countries including Brazil, India, Japan and Britain in industries ranging from food, metals, pharmaceuticals, aluminium and logistics, al Shamisi said.
China is the UAE’s second largest trading partner and the biggest exporter to the UAE. The UAE is considered a gateway to about 60 percent of China’s exports to regional markets and beyond at an annual volume of exchange worth $70 billion, a statement from Abu Dhabi Ports said.