The container ship Xin Yan Tian, owned by China Shipping Container Lines, sits at Jebel Ali Port in Dubai. Charles Crowell / Bloomberg News
The container ship Xin Yan Tian, owned by China Shipping Container Lines, sits at Jebel Ali Port in Dubai. Charles Crowell / Bloomberg News

New paths on Silk Road open up



China will become an increasingly dominant business partner for the GCC in the next decade, a trend likely to speed up as economies in the West stall.

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The announcement yesterday of the Chinese premier Wen Jiabao's visit to Abu Dhabi for the World Future Energy Summit next year is the latest sign of the closer links between the two.

"The Silk Road is re-emerging," said Alessandro Magnoli Bocchi, the chief economist of Kuwait China Investment Company (KCIC). "The links are moving from oil to non-oil trade and investment."

China is expected to push ahead of India to become the region's biggest trading partner by 2020, according to the Economist Intelligence Unit.

The GCC already supplies about half of China's energy imports and more than a third of its crude oil needs. But the world's second-biggest economy and the GCC are already building business links in other areas.

Saudi Arabia overtook South Korea to become the largest petrochemical exporter to the Chinese textile industry in 2009.

China Railway Construction Corporation, a Chinese contractor, helped to build the US$1.8 billion (Dh6.6bn) railway in Saudi Arabia to transport pilgrim traffic during Haj.Several Chinese banks including Industrial and Commercial Bank of China, the country's largest, are setting up in Gulf states, helping to encourage greater trade and investment flows.

But GCC investment links have yet to develop at the same pace with China or the rest of Asia.

In the five years before the financial crisis of 2008, only 11 per cent of the Gulf's outward investment was directed to Asia, according to a recent KCIC report.

Instead, as much as 75 per cent of GCC savings are invested in the advanced economies of the US and Europe. Investors have considered such markets as safe destinations for their money, while fixed exchange rates to the US dollar have ensured predictability in the value of their oil revenues.

But stagnation in those economies and faster growth in Asia should encourage them to switch their investment focus eastwards, says KCIC. The structural deficits and low growth in the US and UK will in the long run dampen the returns of those investments, it said.

"There's a massive amount of money still being allocated to the West and with low GDP growth and deficits they will only provide low returns," said Francisco Quintana, an economist at KCIC and the author of the report. KCIC says the GCC should invest an additional 10 per cent or $600bn in Asia over the next decade to take advantage of higher returns.

Asia's share of the world's GDP will rise from 25 to 35 per cent by 2020, while the share of the US, Europe and Japan will decline from 48 to 38 per cent, according to KCIC.

"Enormous opportunities will arise for local and foreign companies catering to new Asian consumers in need of infrastructure, health care, education, consumer goods, financial services and leisure activities.

"These opportunities will materialise as the global macroeconomic uncertainty is left behind and fundamentals start playing again, and GCC investors can be part of it via portfolio rebalancing," the report said.

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How to apply for a drone permit
  • Individuals must register on UAE Drone app or website using their UAE Pass
  • Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
  • Upload the training certificate from a centre accredited by the GCAA
  • Submit their request
What are the regulations?
  • Fly it within visual line of sight
  • Never over populated areas
  • Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
  • Users must avoid flying over restricted areas listed on the UAE Drone app
  • Only fly the drone during the day, and never at night
  • Should have a live feed of the drone flight
  • Drones must weigh 5 kg or less
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Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

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Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
  • Drones
  • Animals
  • Fireworks/ flares
  • Radios or power banks
  • Laser pointers
  • Glass
  • Selfie sticks/ umbrellas
  • Sharp objects
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Europe’s rearming plan
  • Suspend strict budget rules to allow member countries to step up defence spending
  • Create new "instrument" providing €150 billion of loans to member countries for defence investment
  • Use the existing EU budget to direct more funds towards defence-related investment
  • Engage the bloc's European Investment Bank to drop limits on lending to defence firms
  • Create a savings and investments union to help companies access capital