ABU DHABI (Reuters) - Five Chinese companies will start operations in Abu Dhabi’s industrial zone with an initial investment of $300 million in a boost for the oil-rich emirate’s economic diversification plans.
The companies, from Jiangsu province on China’s east coast, are involved in sectors ranging from power and metals to natural resources and banking, Abu Dhabi officials said.
Chinese companies are increasingly seizing opportunities in the Gulf as the Asian economic giant seeks to expand overseas with its ambition to rebuild Silk trade routes.
Abu Dhabi Ports has signed a 50-year agreement with the Jiangsu Provincial Overseas Cooperation & Investment Company (JOCIC) to take a lease on 2.2 square kms (0.8 square miles) at the Khalifa Industrial Zone Abu Dhabi (Kizad), Mohamed Juma al Shamisi, chief executive of Abu Dhabi Ports, told Reuters.
JOCIC will in turn sign separate agreements with the five Chinese companies, he said.
The firms are Hanergy Thin Film Power Group, Jiangsu Fantai Mining Development (Group) Co Ltd, Xuzhou Jianghe Wood Co, Jiangsu Jinzi Environmental Technology Co and Guangzheng Group.
Abu Dhabi Ports Co manages Kizad as well as the ports in the emirate.
“The foreign direct investment into industry will contribute positively to Abu Dhabi’s non-oil GDP and help in diversifying the economy from oil,” al Shamisi said.
Last year, China’s Cosco Shipping Ports Limited won a 35-year concession to build and operate a new container terminal at Abu Dhabi’s Khalifa Port in the capital of the United Arab Emirates. Cosco, at the time said it planned to invest over $700 million.
The UAE and China also set up a joint strategic investment fund worth $10 billion in late 2015, financed equally by both countries.
The lease agreement is the biggest yet signed at Kizad which has a total area of 100 square kilometers, al Shamisi added.
Jiangsu province is one of China’s major exporters and the agreement is aimed at accelerating trade between China and the UAE, reflecting China’s ‘Belt and Road’ and ‘Maritime Silk Road’ initiatives.
Kizad, which opened in 2012, had attracted investments of around 55 billion dirhams ($15 billion) by the end of last year from countries including Brazil, India, Japan and Britain in industries ranging from food, metals, pharmaceuticals, aluminum and logistics, al Shamisi said.
China is the UAE’s second largest trading partner and the biggest exporter to the UAE. The UAE is considered a gateway to about 60 percent of China’s exports to regional markets at an annual volume of exchange worth $70 billion, a statement from Abu Dhabi Ports said.
Reporting by Stanley Carvalho; Editing by Saeed Azhar and Adrian Croft