I was speaking at the Emirates Towers in Dubai last week. A soft-spoken manager for a large Dubai company waited until the end of my presentation before speaking up. “The Chinese banks are hungrier than the Western banks these days”, he said. “They are prepared to lend when others are not”.
I wonder if they will still have the same appetite after Dubai World’s announcement this week that it will delay payment on its $37 billion worth of debt?
No doubt, there will be concerns, and I expect that Beijing’s bankers are scrambling to assess their exposure to Dubai World. But the Chinese banks aren’t lending to the Middle East for necessarily the same reasons as are the Western banks. The difference is important and will determine the response.
I have heard a number of stories in the past week, in both Dubai and Abu Dhabi, suggesting that Chinese banks prefer to lend to projects contracting Chinese companies. It’s part of a full service package in which China provides the cement, the workers, and the bank loans. A good deal for all.
