China Strengthens Financial Cooperation with Arab Countries

China and Arab countries in the field of financial cooperation, especially under the Belt and Road Initiative, with cooperation in multiple areas such as infrastructure construction, energy, and the digital economy. The article emphasizes that financial cooperation between China and Arab countries has not only deepened bilateral relations

 

November 2023, the People's Bank of China and the Saudi Arabian Monetary Authority signed a bilateral currency swap agreement, with a swap scale of 5 billion RMB/26 billion Saudi Riyals, with a validity period of 3 years, renewable upon mutual consent. The People's Bank of China stated that the establishment of a bilateral currency swap arrangement between China and Saudi Arabia would help strengthen financial cooperation between the two countries, expand the use of local currencies between China and Saudi Arabia, and facilitate trade and investment between the two sides.

 

 

In addition, in October 2023, the China Exim Bank and the Bank of Africa of Morocco signed a cooperation agreement. The two sides will actively promote trade and financial cooperation through project financing, parallel financing, trade financing, and other methods, while strengthening information sharing and personnel exchange, and jointly exploring the use of renminbi loans.

 

China's Ambassador to Saudi Arabia, Chen Weiqing, stated that since last year, the China Exim Bank and the Saudi Arabian Monetary Authority have successfully landed the first cooperation of renminbi loans, and the Industrial and Commercial Bank of China and the Bank of China have opened branches in Saudi Arabia. This reflects the high recognition of each other's financial supervision and investment environment between China and Saudi Arabia, which will provide stronger support for bilateral trade and investment, further promote the development of the comprehensive strategic partnership between China and Saudi Arabia, and serve the construction of a China-Arab community with a shared future in the new era.

 

 

Infrastructure financing has reached a new level

China actively encourages and supports enterprises and financial institutions to deepen cooperation with Arab countries in the fields of railways, highways, ports, aviation, electricity, and communications, gradually expanding the scale of project operations and cooperation, and helping to improve the level of infrastructure in Arab countries.

 

 

Not long ago, the 2023 Seatrade International Maritime Awards Ceremony was held in Shanghai, where the COSCO Shipping Ports Abu Dhabi Terminal won the "Innovation Award for Port Terminals." According to Chen Yuping, General Manager of COSCO Shipping Ports Abu Dhabi Terminal Co., Ltd., the terminal was jointly built by COSCO Shipping Ports and Abu Dhabi Ports, and was supported by the Silk Road Fund. Since its opening in 2018, it has established direct connections with 65 ports worldwide, with a container throughput of over 1 million TEU in 2022. Mohammed Al-Shehhi, CEO of Abu Dhabi Ports, stated that COSCO Shipping Ports Abu Dhabi Terminal is the most trustworthy partner of the group. The cooperation potential between China and the UAE is huge, and the prospects are broad.

 

 

The cooperation results in the field of infrastructure finance between Egypt and China are equally impressive. On October 30, 2023, the China Development Bank completed the full disbursement of a 7 billion RMB loan agreement with the Central Bank of Egypt.据统计, as of the end of the third quarter of that year, the China Development Bank had disbursed more than 6.48 billion USD in loans in Egypt, focusing on supporting the 1 billion USD credit of the Central Bank of Egypt, the National Bank of Egypt and the Bank of Egypt's African SME special loans, the 500 kV transmission line project in Egypt, and the China-Egypt·Teda Suez Economic and Trade Cooperation Zone, among other projects.

 

Around energy infrastructure, multiple financial cooperation projects have been carried out between China and Arab countries. On October 9, 2023, the China Export and Credit Insurance Corporation (Sinosure) underwrote the first medium and long-term risk new energy power financing project, providing medium and long-term export buyer's credit insurance support for the Oman Manal No. 2 500 MW photovoltaic power station project. In the same month, the No. 4 unit performance test of the Dubai Hassyan Power Station project was successfully completed, marking the commercial operation of all four units of the power station. The power station was jointly invested in by the Silk Road Fund, Harbin Electric Group, and UAE investment institutions, and it is also the first investment of the Silk Road Fund in the Middle East. After all units of the Hassyan Power Station are operational, they can provide 20% of the electricity energy for Dubai, helping the local area achieve diversified energy development.

 

 

Mariam, Minister of Climate Change and Environment of the UAE, said that China is vigorously promoting the development of renewable energy and actively cooperating with the international community, reducing the global cost of renewable energy utilization, and effectively promoting the development of renewable energy worldwide.

 

Expanding new spaces in the field of cooperation

At present, Middle Eastern Arab countries are vigorously promoting energy transformation and actively advancing the development of manufacturing, technology, "Internet+", and other fields. China and Arab countries continue to explore financial cooperation in new energy, digital economy, and other innovative fields.

 

Recently, the Industrial and Commercial Bank of China held a bell-ringing ceremony for the listing of green bonds on the NASDAQ Dubai Stock Exchange. The green bonds issued this time were simultaneously listed on the stock exchanges of Hong Kong, China, Dubai, UAE, Singapore, and Luxembourg, with a total issuance scale of about 2 billion USD. Luo Wei, Head of the Dubai Branch of the Industrial and Commercial Bank of China, stated that the bank plans to add 1 billion USD in various businesses related to green and sustainable development in the next 3 years, actively supporting cooperation in the fields of energy-saving and environmental protection industries, clean energy industries, ecological environment industries, and green upgrades of infrastructure.

 

 

In November 2023, the Shanghai Stock Exchange and the Dubai Financial Market signed a Memorandum of Understanding on cooperation. The two sides plan to jointly explore the development of ESG (Environmental, Social, and Governance) and sustainable development-related products, as well as cross-border indices, exchange-traded funds (ETFs), and other financial products. Hamid Ali, CEO of the Dubai Financial Market and NASDAQ Dubai, stated that this cooperation marks an important step for both sides in strengthening international cooperation and promoting cooperation in key areas of capital market development.

 

Xue Qingguo, Professor at the School of Arabic Studies, Beijing Foreign Studies University, stated that the deepening of financial cooperation between China and Arab countries is an important achievement of all-round cooperation between China and Arab countries. The two sides continue to promote pragmatic cooperation in finance and other fields to new heights, providing continuous and powerful momentum for bilateral relations and promoting the high-quality joint construction of the Belt and Road Initiative to move steadily and far.

 

Hasan Daja, Professor at the Hussein Bin Talal University in Jordan, stated that the deepening of China-Arab financial cooperation reflects the high level of trust between the two sides and the desire to strengthen trade, economic, and investment cooperation, providing more opportunities for pragmatic cooperation between China and Arab countries, and also helping to make global financial governance more balanced and diverse.