17 Oct 2019
BRI Agreement Set to Boost Chinese Firms in Abu Dhabi Industrial Zone
Agreement between Abu Dhabi Ports and China's ICBC and JOCIC takes BRI co-operation in the emirate to a new high.
The Jiangsu Overseas Cooperation Investment Co Ltd (JOCIC) and the Industrial and Commercial Bank of China (ICBC) recently signed a five-year agreement with Abu Dhabi Ports to support Chinese companies operating in the Khalifa Industrial Zone (KIZAD) in Abu Dhabi, as part of the ongoing Belt and Road Initiative (BRI).
One of 11 ports and terminals run by Abu Dhabi Ports in the United Arab Emirates, KIZAD functions as an integrated trade, logistics, industrial and free-trade zone. Under the terms of the new agreement, the three organisations will work together to simplify application processes for foreign-exchange services, financial consultancy services and project finance, as well as to speed up the processing of documents, including those used to grant land rights within KIZAD.
The agreement also reinforces the strategic position played by the emirate (and KIZAD) in relation to the other major overseas trade hubs that have evolved within the framework of the BRI. Commenting on the development, Falah Mohammad Al Ahbabi, Chairman of Abu Dhabi Ports, said: "Abu Dhabi's strategic location and commitment to the BRI has placed the emirate in an advantageous position on the global trade map."
The agreement follows the roll-out of a US$13.6 billion economic stimulus package last year, with the emirate having reduced business fees for foreign investors while looking to create more jobs for UAE nationals and improve its overall standard of living. The agreement now sees ICBC designated as the preferred banking partner of both Abu Dhabi Ports and JOCIC, with the latter also committed to introducing other companies to the bank and helping tailor its portfolio of products and services in order to simplify start-up procedures within the zone.
In exchange for its favoured status, ICBC will encourage its global client base to consider setting up within KIZAD's 2.2 sq km China-UAE Industrial Capacity Cooperation Demonstration Zone, a facility established last year under the terms of 50-year agreement. Constructed and managed by JOCIC, the zone is one of the country's landmark BRI projects and, by July this year, had already attracted $1.7 billion in investment from at least 20 Chinese firms.
Among the confirmed investors are the Hanergy Thin Film Power Group, Jiangsu Fantai Mining Development (Group), Xuzhou Jianghe Wood, Jiangsu Jinzi Environmental Technology and the Guangzheng Group. Another sign-up is Chinese tyre manufacturer Roadbot, which is committed to developing a tyre manufacturing facility at a cost of about $600 million.
The opening of the Demonstration Zone coincided with a $700 million BRI-related investment by Hong Kong-listed Cosco Shipping Ports (CSP), one of the world's largest container operators. This has been earmarked for extending the existing terminal capacity and for constructing a container freight station at the nearby Khalifa Port.
The new terminal forms part of an ambitious plan for Khalifa Port, which replaced Abu Dhabi's 1960s-built Port Zayed as the emirate's primary container port in 2012. The port currently has a capacity of five million TEUs (twenty-foot equivalent units), but with the CSP terminal now confirmed, that could expand to 9.1 million TEUs over the next five years. Furthermore, the investment has resulted in Abu Dhabi establishing itself as the regional hub for Cosco's global network of 36 ports.
Ongoing BRI-related collaboration between China and Abu Dhabi has also been reconfirmed at the very highest level following a meeting between Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, and Xi Jinping, the Chinese President, in late July. It is believed both leaders pledged to boost the comprehensive strategic partnership already in existence between the two countries. In addition, Xi called on both sides to strengthen the alignment of their development strategies in order to ensure that the Khalifa Port Container Terminal Two and the China-UAE Industrial Capacity Cooperation Demonstration Zone establish themselves as models for other initiatives to follow.
Geoff de Freitas, Special Correspondent, Abu Dhabi