As the mutually beneficial partnership between China and UAE goes from strength to strength, the diversified economy of Sharjah, the country’s center of trade and industry, is attracting increasing numbers of Chinese investors eager to enter the region
Although economic diversification has been high on the agenda of all governments of the Gulf region in recent years, the Emirate of Sharjah leads the pack, with no single sector accounting for more than 20 percent of GDP. This not only provides a buffer against external shocks, but also creates a multitude of investment opportunities not otherwise found in the region.
“Sharjah’s key advantage is its low dependency on oil-related investments, with the oil and gas sector comprising less than six percent of Sharjah’s GDP,” says Mohamed Juma Al Musharrkh, CEO of Invest in Sharjah, the emirate’s foreign direct investment (FDI) office. From leisure and tourism, environment, healthcare and logistics to light manufacturing and financial services, Sharjah’s economy is one of the most developed in the Middle East when it comes to offering investment opportunities in non-oil sectors.
As a result, investment into the emirate is booming. While UNCTAD figures show that FDI fell globally last year by 16 percent, Sharjah bucked the declining trend with an increase of 102 percent to $1.62 billion, with China as one of the emirate’s leading sources of investment. Almost 700 Chinese companies now call Sharjah home, and their number is quickly growing.
“We are so pleased with the extent of Chinese investment in the Emirate of Sharjah and the increase in the number of activities involving Chinese investors, as seen through the four-percent growth of license renewals in 2017,” says Sultan Abdullah bin Hadda Al Suwaidi, chairman of Sharjah Economic Development Department (SEDD). He highlights key recent developments in the emirate’s economic infrastructure, such as new investment facilities and specialized free zones that cater to the specific needs of Chinese investors and business owners, enabling them to operate in a favorable fiscal environment while receiving ongoing support from Sharjah’s government.
While Chinese investment is visible in almost every sector, industry and logistics are a major draw: the number of industrial licenses for Chinese investments also increased by four percent in 2017, reflecting the growth in trade between the two sides. And as Sharjah’s popularity grows, so too does demand for residential and commercial developments, with the government now seeking investment into real estate, shopping centers and hotels.
The UAE is ranked third among countries due to benefit from China’s Belt and Road Initiative, and Sharjah is keen to capitalize on its unique position as the only emirate with ports on both coasts of the country: the Arabian Gulf and the Gulf of Oman. The recent entry of Chinese companies COSCO and Hutchison Ports into the emirate’s ports looks set to cement its status as a major transshipment and re-export center, paving the way for yet further Chinese investment.
Today, investors in Sharjah benefit from an attractive and continuously improving national investment environment, the integration of government and private sector organizations, and transparent rules and regulations. In the World Bank’s 2017 ease of doing business index, the UAE ranked 21st out of 190 countries, up eight places from the previous year. Meanwhile, in the World Economic Forum’s Global Competitiveness Report 2016-17, the UAE ranked 11th out of 138 countries.
“When it comes to investments, we are here to change how people look at Sharjah. We are here to create a future for our youth. We are here to create opportunity for investors,” explains Marwan bin Jassim Al Sarkal, executive chairman of Shurooq, the Sharjah Investment and Development Authority.
Today, Chinese individual and corporate investors are very nearly spoilt for choice, with available projects in almost every industrial sector. Coupled with a pro-business regulatory structure and strong human capital, Sharjah has become a promising alternative for Chinese investors looking for a base in the MENA region.
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