Pitching it right for Dubai

Although Dubai is not a huge direct investment destination, it has become a base for many Chinese investments bound for Europe and Africa. Provided to China Daily

The emirate is promoting itself as much more than a great place to spend money

Many Chinese know Dubai from stories in tabloid newspapers: a Dubai merchant bought a dozen seats on a plane for his pet falcons, or a wealthy Dubai man keeps a leopard as his pet and drives it around on the passenger seat of his Rolls-Royce.

But Falcon and Associates, a strategic advisory firm responsible for promotion of Dubai, is trying to tell Chinese people that Dubai is not only a place for lavish spending, but also a good place for investment.

Falcon was established in 2009 by Sheikh Mohammed bin Rashid Al Maktoum, vice-president and prime minister of the United Arab Emirates and ruler of Dubai, with a mission to "drive tangible initiatives and strategic communications to support and enhance Dubai's position on the world stage".

Giselle Pettyfer, deputy chairman of Falcon, says its initiatives target both emerging and established international markets, with a strong focus on China, and involve partnerships with businesses and government departments.

Will Oscroft, Falcon's marketing director, is promoting the city through various sponsorships. Last month it managed to renew its sponsorship of the China national table tennis team.

Oscroft says the perception of Chinese people toward Dubai is that it is "premium", but in reality it is not as exclusive as many people may have perceived. "I admit this is a good place to spend money, but apart from the Burj Al Arab hotel, there are three-star and four-star hotels, the school standard is quite high, and the community is good for family life."

Falcon is trying to convey a message that Dubai also offers many more business opportunities for Chinese investors.

"Dubai is a thriving cosmopolitan city and, especially, an important incubator for entrepreneurs," Oscroft says. "There are various free zones such as media city and Internet city for different industries to allow their business to flourish."

The city's population of 2 million is made up of more than 200 nationalities. Among them are 200,000 Chinese residents.

As a Muslim society, Dubai obviously has mosques but it also has churches and temples and people can practice any religion.

Cong Hongbin, managing director of Falcon and also in charge of its investment promotion, says China is rising quickly in significance in Dubai's economy.

Trade volume between China and Dubai is $36.8 billion, while the India-Dubai figure is $36.9 billion. China also imported $35.4 billion worth of goods from Dubai last year.

Of that figure, 60 percent comes from re-exporting, which means goods from China are transited in Dubai for further export to other destinations.

Dubai customs has a long list of tariff-free goods and the city has special tariff agreements with 150 countries. Therefore many countries use Dubai as a transit port to cut tariff and logistics costs.

But the investment volume is still small, Cong says. Government figures show investment from China was only $110 million last year, against a total volume of $700 million in the United Arab Emirates in 2012. However, this figure does not count the small enterprises that account for the majority of businesses in Dubai, Cong says.

"Actually, trade and investment are much more active than the official data shows," Cong says. "There are at least 2,500 Chinese businesses in Dubai, but only less than 20 state companies. The others are mostly involved in transit business."

Real estate is another sector that attracts many private enterprises, he says. After the 2008 global financial crisis, residential property prices dropped about 50 percent and many Chinese investors came to Dubai to hunt for bargains.

One Chinese investor is in talks with the government about constructing 1,000 villas in Dubai, and at the beginning of this year a Chinese pension fund agreed to invest $1.9 billion in properties near Palm Islands, two artificial islands built on the Dubai coast. Some real estate developers are betting on the 2020 World Expo in Dubai to further boost real estate prices.

Although Dubai is not a huge direct investment destination, it has become a base for many Chinese investments bound for Europe and Africa. So far the Big Four banks in China - Bank of China, Bank of Communications, Industrial and Commercial Bank of China and the Agricultural Bank of China - have all set up offices in Dubai.

"Some companies are hesitant to directly invest in Africa due to safety or logistics considerations, so they set up regional headquarters in Dubai, which can reach one-third of the world's population in a four-hour flight," Cong says.

Now more than half of the Fortune 500 companies have set up regional headquarters in Dubai, he says.

In February this year, UAE newspaper The National published an editorial headlined "UAE's 'unshaken house' looks East", which cited Minister of State for Foreign Affairs Anwar Gargash's comments that the country must invest more in its relations with Asian countries, noting that five of the 16 most important United Arab Emirates embassies are in Asia.

The world's most important economies include China, India, Brazil, the United Kingdom, Germany, Japan and Africa, the report says.

"Relations between China and Europe, and China and India are long-standing, but the Chinese people have really only begun to learn about Dubai in the past five years," Oscroft says. "The Emirates airline has played a big role in profiling Dubai. Every year 200,000 Chinese people travel to or transit through Dubai. A few years ago, there were far fewer doing that."

The businesses that are most talked about in Dubai are aviation, logistics and finance. With one of the busiest airports in the world, Dubai is the gateway to Africa and Europe, Oscroft says.

"Falcon is very specific in its focus, which is China and India. Other organizations such as the Dubai Chamber and Dubai International Financial Center are serving the world."

Unlike many big cities around the world that are putting the brakes on expansion, Dubai is stilling seeking to expand. "By 2020, we plan to have 200 million tourists passing through," Oscroft says.

Besides efforts to attract Chinese investors, Falcon is trying to build a bigger image for Dubai through magazines and short documentaries.

Twice a year it publishes a magazine called Vision which details Dubai's history, culture and daily life as well as business opportunities in China. The magazine appears in major restaurants, hotels, Emirates flights and other places. Another important channel is visiondubai.cn, a website that opens a window on the real Dubai for Chinese people.

"What we are trying to do is create broad brushstrokes of Dubai in the Chinese public's minds," Oscroft says. "Through promotional videos we educate the Chinese people about the true story of Dubai. Hopefully this raises awareness of and affection for the city."

wangchao@chinadaily.com.cn

(China Daily Africa Weekly 05/30/2014 page23)