Trade corridors between China and the MENA region carry huge economic growth potential for businesses, offering the greatest prospects in the commodity and energy sectors said HSBC at its Middle East and North Africa (MENA) and China Forum held in the UAE today. Emphasising the growth of China as a trading powerhouse, HSBC added that China is poised to become the world’s largest trading nation by 2016 and will account for 12.3% of world trade by 2026.
Outlining the importance of trade relations between China and the MENA region, His Excellency Sheikh Nahayan Mabarak Al-Nahayan, UAE Minister of Higher Education and Scientific Research, Chancellor, Higher Colleges of Technology said at the event: “A maritime, aerial, and electronic Silk Road extends between China and the Middle East and North Africa. That is why you are here today.
“Although economic growth comes from increasing productivity, most increases in productivity result from education, research, and innovation—those activities that mark high-imagination-enabling countries. In particular, we must be HIEs [high-imagination-enabling countries] in regard to sustainability.
“Our new Silk Road extends within a global environment, and at every turn our new Silk Road could threaten that very environment. Our imaginations—your imaginations today—must create new and better ways to keep the road open and keep the environment sound.
“I hope that you will foresee ways for making the new Silk Road an avenue of shared space. We are no longer separate. We can no longer depend on conventional signs and directions. We must respect all travelers for what they are and what they offer. We must ensure that, as in the tenth century, “there is no obstacle between us and China.”
The latest HSBC Trade Connections report, issued in February 2012, highlighted that China is currently the MENA region’s second largest trading partner after the USA. Three out of five of China’s overall top emerging importers are oil importers from within the MENA region: Qatar, Bahrain and Egypt. Each is forecast to grow above 14.00% annually over the next 5 years to 2016.
Commenting on the long term business opportunities in China, David Eldon, Chairman, HSBC Bank Middle East Limited, said at the event: “Whether this is a good time to be looking to China for business opportunities ultimately comes down to one’s perspective. An emerging market, China is a place where patience is and will continue to be required. It offers considerable longer-term opportunities – due to the country’s overall growth potential, due to its expanding and increasing affluent middle class, due to its growing footprint in the global economy.”
HSBC continues to see global connectivity shift to the East and across global Emerging Markets and re-affirms that international trade remains vitally important in part assisting in global economic recovery. Supporting this, HSBC Global Research recently highlighted that by 2050, 19 of the top 30 economies will be Emerging Markets. Faster Growing markets will contribute twice that of Developed Markets to global growth.
Abdulfattah Sharaf, Chief Executive Officer, HSBC Bank Middle East Limited, UAE said: “We are honoured to have His Excellency Sheikh Nahayan Mabarak Al-Nahayan here to support and speak at the HSBC MENA and China Forum. Having him here underlines the ever growing importance of the trade corridor between the two regions. As both MENA and China’s trade grows faster than the world average, there is no doubting the significant opportunities for businesses seeking to take advantage of this trading corridor in the coming years.”
Trade has been strong focus for HSBC regionally and globally. The Group aims to double its trade business in the medium term. HSBC MENA targets are in line with this.
Mr Sharaf added: “At HSBC, we actively promote and facilitate growth through cross border trade as companies increasingly seek to do business internationally. HSBC has been present in China for over 150 years, in the UAE for over 65 years and in the MENA region for 70 years. We believe we are exceptionally well positioned to focus on emerging and faster growing markets, ensuring our customers benefit from our global footprint, rich heritage and extensive expertise.”