Dubai and Chinese officials have begun talks on cooperation between their state investment agencies even as China readies a vehicle that could wield as much as $200 billion. An executive of Dubai World told Reuters on Wednesday that senior officials from both sides have already spoken about possible tie-ups, which could involve asset swaps.
"We are starting to talk. The Chinese will be looking at investments that we already have in the Middle East and in Western regions of the world," Yu Lai Boon, chief investment officer at state-holding company Dubai World Group, told Reuters on the sidelines of a property conference in Singapore. "We will be looking at things within China itself. Whether it's asset swaps or tie-ups, we will consider it."
"At the highest level there is already a connection. But the next step is going to be at the various business-entity levels," he said, adding that Chinese Vice Premier Wu Yi had already visited Dubai.
Yu said the financial sector would probably be the first area of cooperation between the two sides as China was keen to see its state-owned banks play a larger role in the international capital markets.
"(The Chinese banks) will be interested in proposing investments to us or funding our investments because they want to have a bigger stake in the capital markets," Yu said, without elaborating.
Dubai World, the investment holding company of the Dubai government with a multi-billion portfolio that includes British ports operator P&O to New York luxury retailer Barneys, last year bought a 2.7 percent stake in Asia-focused bank Standard Chartered. "(The market) is now dominated by American investment banks but the Chinese banks will be the next force to be reckoned with," Yu added.
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