The fourth annual China Homelife Dubai exhibition, held over three days last week in Dubai’s World Trade Centre, is symbolic of the rise of both China and this country as trading nations – and of the deepening trade links between the two.
The exhibition, which showcases Chinese-made homeware goods from more than 1,000 manufacturers, attracted approximately 6,000 attendees and was presided over by high-ranking officials from both governments.
Sheikha Lubna Al Qasimi,the Minister of Development and International Cooperation, officially inaugurated the event on Tuesday, hosting a high-level Chinese delegation that included Tang Weibin, the consulate general of the People’s Republic of China, and Zhang Yi, the commercial counsellor of China’s economic and commerce department.
At this year’s event, exhibition space was increased by 150 per cent on last year, with exhibitor numbers up by 60 per cent, as buyers from the Middle East and beyond flocked to sign contracts with Chinese goods manufacturers.
The show’s expansion is a mirror of the rise in Chinese trade over the past years. The country overtook the United States last year to become the world’s largest trading nation, with its trade in goods hitting US$3.87 trillion during the year.
Similarly, the increased number of exhibitors at the show represents both this country’s growing status as a re-export hub and its importance to China’s export growth. It is estimated about 60 per cent of China’s total foreign goods trade passes through the UAE before being re-exported on to Africa, Europe and beyond.
Trade between the two countries has increased 10-fold over the past decade, according to Standard Chartered. Bilateral trade grew to US$15.6bn last year, a year-on-year growth of 10 per cent.
The Dubai Chamber of Commerce is also looking at establishing a representative office on the Chinese mainland, according to its chief executive Hamad Buamim.
“It is in the plan for 2014,” he said. “We are looking specifically at Beijing and Shanghai.”
“Through this office we want to bring our members closer to the business and investment opportunities in China and help enhance bilateral business and trade ties.”
Dubai Chamber currently has 2,560 Chinese member companies. Non-oil trade between China and Dubai stood at Dh115 bn in 2012, a year on year increase of 15 per cent, the chamber said.
The country’s banks have been proactive in seeking to cash in on such growth, with both Emirates NBD and National Bank of Abu Dhabi opening branches in mainland China late last year.
Banks are also increasingly looking to offer renminbi products in the UAE, given the rapid rise in trade settlement in the currency. Since its launch three years ago as an international trading currency, yuan settlements grew to 5.53tn yuan (Dh3.32tn) last year.
The global transaction services provider Swift said last week the currency had overtaken Europe to become the second-most popular currency in international trade finance behind the US dollar.
Mashreqbank, Emirates NBD, and HSBC are among local banks to offer renminbi accounts to their domestic clients. HSBC, which first launched yuan accounts to its business customers in 2011, has rolled out a further range of yuan accounts and term deposits this year and is looking to launch structured products focusing on Chinese equities in the near future.
Despite the rapid growth in trade between this country and China, the trade relationship between has not always been without its hiccups. In January last year the two countries signed a 35bn yuan currency swap agreement, China’s first such agreement in the Middle East, to be valid for a period of three years.
Almost two years on, however, the swap agreement has yet to bear fruit here. Despite ongoing negotiations between the two countries, the requisite account for the funds at the Central Bank has yet to be opened, a senior Central Bank official said last week, on condition of anonymity.
Also taking its time is development of a mooted free trade agreement between China and the GCC.
In September, the Chinese premier Xi Jinping called for negotiations to be restarted, following a meeting with Hamad bin Isa Al Khalifa, the king of Bahrain, in Beijing. Given negotiations on the agreement first started in 2004, investors do not expect a final agreement to be reached any time soon.
But international hopes for more proactive and forward-looking Chinese economic policies were raised last month by positive pronouncements from China’s Third Plenum of the 18th Party Congress in Beijing.
The reform plan published in the wake of the top-level closed-door government meeting, described as one of the biggest policy shifts in the past 30 years, contained numerous references to allowing market forces to play a greater role in stimulating the economy, and urged the lifting of investment restrictions.
Such intentions, if even only partly followed up, are likely to mean good news for businesses here.