A New Silk Road
August 3rd, 2009
The financial journal The Daily Reckoning had an interesting piece on developing trade relations between the Middle East and China. American and European stonewalling of visa requests as well as oil revenues are increasingly driving Arab buyers to China – and vice versa:
The number of Arab visitors to China surged as a result, filling up flights between Dubai and the main Chinese cities of Guangzhou, Shanghai, and Beijing.
The economic crisis has only intensified the trend. It’s no wonder. The Middle East’s imports from China are still growing, albeit in low single-digit figures, even as the United States imports from China collapse at near twenty percent rates relative to last year’s levels. And Chinese manufactures are searching for new markets in the Middle East as a result. It is just one more sign of the change in demand.
Take Yang Linshan, for example, a fabrics manufacturer in the coastal province of Zhejiang. The Middle East now accounts for almost twenty percent of his exports. He is looking to set up a branch office in Dubai. Other manufacturers like Yang are meanwhile scouting for locations in the Middle East to build factories even as production costs at home rise. Egypt, with its low-cost workforce, is a particularly attractive investment destination.
