Chinese state-owned financial services firm to open in Abu Dhabi's financial hub
Industrial Capacity Co-Operation Financial Group to begin operations at ADGM by year-end
A state-owned Chinese financial services firm will set up in Abu Dhabi's financial hub to offer lending facilities to Chinese companies operating in the emirate's industrial zone, amid a slew of UAE-China business deals announced this week.
Industrial Capacity Co-Operation Financial Group (ICCGC) will begin operations by year-end at the Abu Dhabi Global Market, according to a statement from the ADGM on Friday during Chinese President Xi Jinping's visit to the capital. Owned by the Jiangsu provincial government, the firm will provide strategic investment and credit to the Chinese firms in the Khalifa Industrial Zone of Abu Dhabi (Kizad) and support the internationalisation of the renminbi.
"The company is the first of its kind in terms of a Chinese state-owned company wanting to set up in Abu Dhabi offering a financial services platform to meet the needs of Chinese investors in Kizad," Richard Teng, chief executive of ADGM Financial Services Regulatory Authority, told The National.
Last year Abu Dhabi Ports signed a 50-year agreement with the Chinese Jiangsu Provincial Overseas Cooperation and Investment Company (JOCIC) that will attract investments of Dh1.1 billion to the Khalifa Port Free Trade Zone. JOCIC will develop about 23.7 million square feet of the free trade zone for companies from the Chinese province of Jiangsu.
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The space that will be occupied by JOCIC's new company, the China-UAE Industrial Capacity Cooperation (Jiangsu) Construction Management, represents about 2.2 per cent of the available free zone space in Kizad's Khalifa Port Free Trade Zone. Kizad, an industrial park, is owned by Abu Dhabi Ports.
"The new firms setting up in the region will need funding, credit facilities, insurance and financial services," Mr Teng said. "They will work with financial institutions in China to work and explore together how to tap financial opportunities in this region."
The presence of Chinese companies in Kizad is in addition to a $738m investment by Cosco Shipping Holdings, the world's third-largest container operator. In addition to its current capacity of 2.5 million TEUs (20-foot equivalent units), the deal signed with Cosco will boost the port's annual capacity to 6 million TEUs.
Earlier this year, ADGM opened its representative office in Beijing. The selection of China as the destination of its first-ever overseas foray is a significant move by ADGM, which aims to attract more financial services firms from the Asian economic powerhouse. ADGM, the capital's financial free zone, is trying to establish itself as an offshore centre for renminbi to support internationalisation of the Chinese currency.
"The ICCFG will support the anchoring of more Chinese enterprises in Abu Dhabi seeking commercial opportunities along the Belt and Road route including the MENA region," Ahmed Al Sayegh, chairman of ADGM, said. "ADGM remains committed in enhancing the cross-border connectivity and creating new opportunities between the two economies.”
The ICCFG intends to scale up its services and presence in other Belt and Road-related industrial capacity zones in the "near future," according to the statement.
The agreement was made in the presence of Mr Xi and Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, in Abu Dhabi. The agreement was signed by Mr Bin Wang, chairman of China Jiangsu International and Ahmed Al Sayegh, chairman of ADGM.
Updated: July 21, 2018 04:22 PM