MIDDLE MEN BETWEEN EAST AND MIDDLE EAST
A growing volume of Arab capital has been finding its way into China -- either through direct joint-venture investment or indirectly through equity holdings in Hong Kong financial institutions with China connections. And the Chinese have not been slow in responding to Arab overtures.
It is telling that the first, and so far only, bank with foreign equity incorporated in China involves substantial Arab capital. An Arab bank was also among the first four foreign banks given permission, late last year, to operate a branch in the People's Republic. And in March, the Chinese announced the setting up of an Islamic bank.
It will operate in the autonomous region of Ningxia in the north of China where the population is predominantly Moslem. It is a joint venture between the Ningxia Islamic International Trust and Investment Corporation and the Faisal Islamic Bank of Egypt. An agreement was signed in March and the bank, with a capital of $40 million, is expected to be doing business by the end of the year.
Arab interest in China has visibly been on the increase since a soft loan by the Kuwait Investment Office to the special economic zone of Xiamen in 1983.