Dubai capable to host RMB clearing hub

DUBAI -- Dubai has the potential to host a clearing hub for the Chinese currency, and seeks to attract additional Chinese financial firms to invest in the emirate, head of a local free trade zone said on Wednesday.

Essa Kazim, chairman of the free zone Dubai international financial center (DIFC) authority, said the DIFC could become a clearing hub for the Chinese currency renminbi. Earlier in April this year, Qatar established the first renminbi clearing hub in the Middle East in Doha.

The 2004-founded DIFC harbors branches of the 21 of the 25 biggest banks in the world, among them the top four lenders are from China, including the ICBC, Agricultural Bank of China, Bank of China and China Construction Bank.

"We are currently in talks to attract a number of new financial firms from China which have expressed interest to set up an office in the DIFC," said Kazim.

Earlier in the week, ICBC, the world's largest bank, listed a $500 million bond, the first dollar bond by a Chinese lender in the Middle East, on the Nasdaq Dubai, the international capital market which is located in the DIFC.

Zhou Xiaodong, general manager ICBC Middle East, told Xinhua he hopes for more Chinese firms to follow and to list bonds on Dubai in order to create a liquid market in Dubai as a financial link between the Middle East and East Asia.

In recent years, the DIFC authority regularly held roadshows in China. Kazim and his team will travel to China this coming September for roadshow in Beijing and Shanghai, where they will talk to local firms and officials, particularly in the financial sector.

The DIFC head said for the free trade zone aims to triple the number of registered financial firms from the current 362 to 1000 companies by 2024.

As of 2014, financial services contributed 12 percent to Dubai' s gross domestic product (GDP) to 18 percent by 2024. Less than two percent of Dubai's GDP is based on oil.