ABU DHABI // Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, will begin a three-day official visit to China on Sunday.
He will meet president Xi Jinping and senior Chinese officials to discuss opportunities to expand trade, economic, social and cultural exchanges.
Industrial and investment relationships are also expected to be on the agenda along with fighting terrorism and stability in the Middle East.
“There is a whole lot to talk about,” said Abdulkhaleq Abdulla, political science professor at UAE University. “This is a good occasion to try to change the Chinese perspective on the Syrian crisis, hoping that China somehow recognises that keeping [Syrian president] Assad and defending him also means keeping and defending ISIL.”
Others said that the UAE played an important economic role for China, acting as a bridge to Middle Eastern and African markets.
“The UAE is keen to develop a deeper partnership with China, soon to become the world’s biggest economy,” said Sabahat Khan, senior analyst at the Institute for Near East and Gulf Military Analysis, a Dubai think tank. “The UAE-China relationship is interesting because both are wealthy countries with development-focused agendas. Both are keen to preserve international stability – politically, economically and financially.”
He believed issues such as the problems in Syria, the Iranian nuclear deal, falling oil prices and global economic growth would also be discussed.
“These meetings will provide a vital opportunity for developing a better understanding of national perspectives and positions, and identifying areas to enhance cooperation,” he said.
“The International Monetary Fund recently inducted the Chinese yuan into its benchmark reserve currency basket, cementing the country’s status as a global economic power – but China wants a global financial system that breaks the monopoly of the US dollar, which is inevitable.”
He said such issues were crucial for the Gulf region in the long term.
“The Chinese are setting up massive funds for international development and are financing a new silk route connecting almost 60 countries,” Mr Khan said. “So China signals opportunity for the UAE, and vice versa, across many shared long-term economic and development goals.”
China also has vested interests in the Middle East, namely oil imports and energy. A research paper on China and the Middle East by Chatham House in October stated that “instability in the Gulf, which supplies half of China’s imports, is a constant concern for Beijing”.
“Increasing oil imports, combined with Beijing’s ambitious foreign policy designs, are paving the way for a deeper commercial and diplomatic engagement,” it said.
Analysts said the UAE was also adopting new approaches to its foreign policy in the region, playing a vital role in the Middle East and creating links with major world powers.
Dr Mohammed bin Huwaidin, UAE University political science chairman, believed as the UAE upgraded itself to the level of a major regional player it would need to coordinate its policy with an international player such as China, which has a great interest in this region.
He said China had repeatedly maintained that its peaceful rise would depend on securing energy from around the world, particularly from the Gulf.
“It is important for their economic development as it provides them with a substantial amount of oil and energy.”
cmalek@thenational.ae
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
SPECS
Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now
Killing of Qassem Suleimani
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
