East China’s Jiangsu Province has signed a $300m investment cooperation agreement with Abu Dhabi Ports of the United Arab Emirates to strengthen its economic ties in the free trade zone area in Khalifa port, as part of China’s One Belt One Road initiative.
The deal comes amid efforts by Abu Dhabi to diversify its economy by boosting industry and relying less on revenue from hydrocarbons.
Jiangsu Provincial Overseas Cooperation and Investment Company Limited, JOCIC in short, will develop about 23.7 million square feet of the free trade zone for companies from the Chinese province of Jiangsu.
The space that will be occupied by JOCIC's new company, the China-UAE Industrial Capacity Cooperation Jiangsu Construction Management, represents about 2.2 per cent of the available free zone space in Kizad's Khalifa Port Free Trade Zone. Kizad, an industrial park, is owned by Abu Dhabi Ports.
“We have worked hard to make Kizad not only the largest free zone in the region, but also one of the most sophisticated free zone areas in the world, particularly for the industrial and manufacturing sectors," said Sultan Al Jaber, the chairman of Abu Dhabi Ports and the Minister of State.
Five Chinese companies - Hanergy Thin Film Power Group, Jiangsu Fantai Mining Development Group, Xuzhou Jianghe Wood, Jiangsu Jinzi Environmental Technology and Guangzheng Group - have already announced plans to invest in the leasing space. Such a move will bring the companies closer to the customers they serve in the region.
These companies will be the first to take advantage of the vast benefits of such a lucrative economic opportunity. The agreement serves to strengthen ties between the UAE and China, after China’s reinvigoration of the ‘Silk Road’ initiative and the ‘Belt and Road’ initiative. The agreement complements the common desires of both nations to speed up economic advancement and attract more industrial investment, as well as build upon trade relations.
The agreement comes amid deepening ties between the UAE and China in the wake of a three-day official visit to China in December 2015 by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.
During that trip, Abu Dhabi's Mubadala said it would launch a joint fund worth US$10bn with two Chinese state institutions to invest in sectors with strategic importance for the UAE and China.
China is the UAE's second biggest trading partner after India and the UAE is the gateway to about 60 per cent of Chinese exports to regional markets.
The land lease includes an option for China-UAE Industrial Capacity Cooperation Jiangsu Construction Management to establish and develop a further 107,639,100 square feet of free zone at Khalifa Industrial Zone Abu Dhabi Area B to meet additional demand by Jiangsu province businesses.
The agreement also saw the establishment of a 50-year Musataha Agreement signed by Abu Dhabi Ports with Jiangsu Provincial Overseas Cooperation and Investment Company Limited.
The UAE is considered a gateway to about 60% of China’s exports to regional markets at an annual volume of exchange of $70bn.
Huang Lixin, executive vice governor of Jiangsu and head of the Jiangsu delegation stated: “We will work together with Abu Dhabi to build the UAE-China Industrial Capacity Cooperation Demonstration Zone into a landmark program of the ‘Belt and Road’ initiative and a beacon of UAE-China exchanges and cooperation.”
Captain Mohamed Juma Al Shamisi, CEO of ADP, said “the agreement plays a pivotal role in the Abu Dhabi government’s plans to strengthen the infrastructure and transport sectors in Abu Dhabi, in line with the Abu Dhabi Economic Vision 2030.”
