Economy

UAE looks to lure Chinese companies

By Lan Lan (China Daily)
Updated: 2011-06-07 13:19

TIANJIN - The United Arab Emirates (UAE) is striving to diversify its economy by attracting more businesses from China and other Asian nations to invest in its newly launched industrial zone.

Chinese manufacturers, such as aluminum and steel companies, are being welcomed to invest in the Khalifa industrial zone in Abu Dhabi, the UAE's capital, said Khaled Salemeen, executive vice-president of the zone.

China is a major importer of aluminum, and the nation's enterprises will take advantage of the UAE's abundant aluminum resources to manufacture products in the industrial zone and export them to China, he said.

"We are an importing country and we don't export that much, so enterprises set up in Abu Dhabi can export more. That's a main advantage for the enterprises," said Salemeen, adding that between 60 and 80 percent of the products made in the industrial zone will be exported.

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Other advantages include access to the local market and the preferential tax policies. The industrial zone will levy zero-level corporate and individual income taxes, as well as sales tax and capital gains, but energy costs such as electricity and natural gas are similar in the UAE and China, he said.

Industries such as aluminum, steel, petrochemicals, chemicals, logistics and transportation are the main sectors the zone aims to attract. Salemeen said he has had discussions with many Chinese manufacturing companies, but declined to provide names at this stage.

Chinese enterprises are the target investors of the industrial zone, along with investors from India, South Korea, the United Kingdom, Germany and the United States.

The six target countries were chosen after market analysis conducted by the industrial zone through March to September 2010 through interviews with 720 CEOs from all the G20 countries.

"So far CEOs in the East have shown a greater appetite than their Western counterparts, their knowledge of business is deeper and the speed of making decisions are total different," he said.

The zone will cover 417 square kilometers, about two-thirds the size of Singapore. With total investment of $7.2 billion, the first phase of the project will be completed in 2012.

"We are not attracting labor-intensive enterprises, we are looking for high-value machinery and technology-based companies," said Salemeen, adding the zone's aim is to raise the city's GDP.

According to the plan, the industrial zone is targeted to contribute about 15 percent of the city's economy by 2030 and increase its global competitiveness.

Salemeen said the company is currently focusing on the construction and marketing of the first phase. Phase two is in the planning stage, and will depend on the occupancy level and market response for the phase one.

China was the UAE's second-largest trading partner in 2010. Bilateral non-oil trade hit 81 billion yuan ($12.46 billion).