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Financial ties grow between China, Gulf states

By Hu Xiaocen | July 19, 2013, Friday | Online Edition


THE financial ties between China and the Gulf Arab states are growing stronger along with the rise in bilateral trade between the world's second-biggest economy and the oil-rich region, according to Doha Bank.

The six Arabian states are known as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

"More Gulf banks are coming to China to support their clients' operations here. And as the yuan goes global, there are growing opportunities for Chinese corporations and entrepreneurs to come to the Gulf states," Dr. R. Seetharaman, group chief executive officer of the Qatari bank, said in Shanghai yesterday.

Seetharaman said Doha Bank was the first bank from the region to set up a representative office in China. However, the bank has no plan yet to bring the office into a fully licensed branch.

Doha Bank opened its office in Shanghai in 2007. Other Gulf lenders such as the National Bank of Abu Dhabi, Emirates NBD, and Qatar National Bank also have scrambled to establish an office in the city since last year.

Top Chinese banks also have established their operations in the Gulf states to facilitate bilateral trade.

China's biggest lender, the Industrial and Commercial Bank of China, established operations in Dubai and Doha in 2008. The nation's biggest foreign exchange bank, the Bank of China, also has a local incorporation in Dubai.

Trading between China and the Gulf states expanded from US$92.5 billion in 2010 to US$155 billion last year. Saudi Arabia was the biggest contributor in trade followed up by UAE and Oman, according to Doha Bank.

"The use of yuan for trade settlement has been increasing in recent years. With bilateral trade expanding, we can expect the usage of yuan to reach 20 percent of all trade settlement transactions between China and the Gulf," Seetharaman said.


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