Chinese have entered Middle East and are capturing most of the trade there.
Asian dragon storms UAE market
Chinese doing more business in Dubai
K.S.R. Menon
Special to The Daily Star
DUBAI: In the congested bylanes of Murshid Bazaar, Dubai’s old wholesale market, the Chinese traders are setting up shops.
Their numbers are growing – despite the unfamiliar climate and difficulties in communication – as more and more manufacturers and traders from China decide to do away with mostly Indian middlemen and do business direct from the region’s flourishing entrepot, Dubai.
For quite some years now, Chinese products have flooded the markets in the Gulf including the United Arab Emirates and Dubai, one of the seven emirates of the UAE, has been a major re-export center for them.
“The business is good,” said Jing, who runs Hussain Murad Trading dealing in an assortment of bags, cosmetics, plastic items, caps and hats.
The prices are rock bottom, and quality reasonable. The business has to be good to afford the hefty down payment for the shop in the bustling bazaar.
Without much ado, the Chinese have penetrated the Middle East Market. China was way down in the list of countries with which UAE has been trading. But for the last three years China has been the top exporting country to UAE, according to figures available at the Chinese Consulate here.
On the way to the top, China overtook UK, Japan and India, the last being a strong regional player traditionally. UAE’s trade turnover with China in the first six months of this year stood at $2.32 billion, registering a 42.5 percent increase over the figures for corresponding period last year.
But UAE is not an exceptional case.
Saudi Arabia-China trade turnover during the same period was worth $ 3.25 billion, marking a growth of over 54 percent over the previous year and China-GCC (the six Arab Gulf Cooperation Countries of Saudi Arabia, Kuwait, Qatar, Bahrain, UAE and Oman) trade was $7.33 billion, again up by over 50 percent.
Until the year 2000, the Chinese mostly exported textiles, toys, consumer goods and electronics items.
But in 1999 China established the Chinamex Middle East Investment & Trade Promotion Center, in collaboration with Sharjah, an Emirate of the UAE.
Straddling the Dubai-Sharjah border, Chinamex also has a permanent Chinese exhibition center showcasing exhibits covering a wide range in light industry, electronics, household appliances, textile machinery, agricultural machinery, petrochemical engineering, communications, office automation, general applied technology, environmental protection, instruments and meters, hardware and tools as well as other related industries from China.
To acknowledge China’s commitment to the Middle East market, the Chinese Vice Premier Madam Wu Yi visited the UAE last year leading a high power delegation.
“We wanted to cultivate the perception that China can also produce industrial goods and heavy equipment, making a distinction between traditional items and most developed technology based products. We offer quality goods at competitive prices” said Jimmy Ye J.M. Deputy General Manager, Chinamex Center.
Chinamex is now busy with the annual Chinese Commodities Fair to be held from Dec. 6-10. Last year the Fair drew over 40,000 visitors, including 6,500 traders from 65 countries.
“We expect 60,000 visitors this year to the Exhibition, the biggest overseas trade fair for China to date, and more than 600 Chinese companies and businesses are likely to participate,” Jimmy said.
China is also planning to carve out a share in the estimated $150 billion investment in the Gulf region’s power sector over the next two decades.
The Chinese started focusing on the power sector after its export of electrical equipment to the region shot up in recent years to $245 million, the UAE accounting for as much as $87 million in the first four months of 2002.
“Three years ago there were only about 8,000 Chinese in the UAE but the number has gone up to 80,000 though it is difficult to give an exact number,” Jimmy said. “The flights to Beijing and back are almost full.”
He cannot be far off the mark.
The China Southern Airlines, the largest airline in China added a weekly Boeing 757 service between Beijing and Dubai International Airport via Urumqi in October 2003, to meet the increasing demand in the sector.
The new service to Dubai, Middle East’s busiest airport with a total of 16 million passenger traffic in 2002, complements its twice weekly service between Beijing and Sharjah.
The arrival of the Chinese initially hit traditional businessmen who are mostly from India and Iran. But many Indian traders have managed to stay put in business by traveling to China and the Far East to source cheaper goods directly and at more competitive prices.
But some in Murshid Bazaar have felt the pinch. Abdul Jaleel who comes from the Southern Indian state of Kerala saw roaring business at his small cafeteria slump.
“The Chinese do not take our tea, nor do they relish Indian or Arabic cuisine,” said Jaleel who is now struggling to pay the steep $2,000 monthly rent.
One thing remains clear: The Chinese are here to stay.