I’ve been arguing for a while that we will start to see more Chinese investment in the Middle East. However, the evidence so far is limited. For instance, I met last week with the Beijing Furniture Manufacturers Association. Their director, Yu Xiusu, had just returned from a trip to the Middle East. But mainly to look for potential buyers. She wasn’t so keen on investing, worried about the lack of raw materials. (Fair enough, there’s not so many pine plantations in Egypt).
So I was pleased to read that Gatoson, a Hong Kong holding company, will develop an economic zone near the Syrian city of Hama, according to the Syria Economic Report. The company has apparently signed a land development contract with Salim Altoun, CEO of the Altoun Group and head of the Syrian-Chinese Businessmen Council. Importantly, the economic zone is pitched towards Chinese investors and targets eight sectors, raw building materials, decorative building materials, petrochemicals, heavy industries, food processing, information technology and mass media.
Now, a contract signed isn’t an economic zone built. But it’s a start. I’ll be chasing up Gatoson in the coming weeks to find out more details.
A lot has been written on Dubai in the past few months. Some are fans. Others are critics. But few offer an idea of what the city might look like in a decade from now.
I was in Singapore last week and was struck by the amount of construction taking place. The number of cranes on the skyline reminded me of Dubai. Now, Singapore has its problems. Its economy is contracting. Its construction sector is suffering. But this isn’t the first time the city took a hit. It was also shaken by the Asia crisis in 1997, and its experience then offers a way to think about Dubai’s future today.
Here’s the most important lesson. It’s the construction sector that will take the biggest hit. In 1997, Singapore experienced a Dubai-like boom in its property market. The resulting crash was spectacular and the construction sector has only just recovered. In fact, it was only last year that the country started spending as much money building residential apartments and shopping malls as it did during the mid-1990s.
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I was chatting with an Egyptian friend last week, a twenty-year resident of Hong Kong, and was struck by a remark she made: “I had lunch at the Shangri-La hotel last weekend, and the waiter showed me which dishes had pork and which dishes didn’t. It’s the first time that’s happened in twenty-years”.
The story is an example of Hong Kong’s free-market at its best. My friend wears a Hijab and is easily identified as a Muslim. In the past, the waiter might have overlooked this. But not anymore. Why? Because Muslim tourists are Hong Kong’s latest big spenders.
In fact, it’s now common to hear the Arab Gulf dialects spoken in Hong Kong’s air-conditioned malls. The number of Saudi Arabian tourists, for instance, has soared from a low 5,000 in 2000 to 19,000 in 2007. (The numbers have since dipped modestly as a result of the economic crisis).
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“Nationalism” is on the rise and it is bad news for the Silk Road.
I’m reminded of the risks by events in Syria. I recall Syrian friends praising China a few years ago―the arrival of “Made-in-China” goods to the streets of Damascus meant the middle-class could afford to buy the type of high-end consumer goods, such as digital cameras, which were once unaffordable.
But the tone has since changed. Mohammed Sharabti, the head of the Aleppo Chamber of Industry, alleged earlier this year that Chinese clothing imports have flooded the market. A number of textile manufacturers in Aleppo, the country’s second largest city, have closed. (You can’t afford to buy “Made-in-China goods if you don’t have a job). The Syrian government has responded by imposing tariffs on Chinese textile imports.
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