Business

Boost to Chinese presence in Qatar

By Li Xiang (China Daily)
Updated: 2010-11-11 08:04

BEIJING - The Qatar Financial Center Authority (QFCA) is in talks with a dozen Chinese financial institutions including State-owned banks to facilitate the expansion of Chinese companies in the Middle Eastern country, the authority's top executive said on Wednesday.

"We are talking with financial institutions from both the Chinese mainland and Hong Kong in sectors including asset management, banking and insurance," Shashank Srivastava, QFCA's acting chief executive officer, said at a press briefing in Beijing.

Srivastava said the authority will offer favorable investment policies to Chinese financial companies including 100-percent ownership of subsidiaries and full repatriation of profits.

Established by the Qatar government in 2005, QFCA is designed to attract international financial institutions and multinational corporations to conduct business in the country.

The move was part of Qatar's strategy to build a world-class financial hub in the Gulf region and to diversify its economy that relied heavily on the oil and gas industry.

Srivastava said the QFCA is focused on three key sectors - asset management, reinsurance and captive insurance. The authority currently grants foreign companies five different licenses with the top one allowing banks to take deposits and make loans. But he said the retail banking sector remained closed to foreign financial institutions.

Industrial and Commercial Bank of China, the world's largest bank by market value, established a branch in Doha, Qatar, in 2008. It was the first time that a Chinese bank was allowed to conduct business in the Gulf region.

Srivastava said there is a "tremendous" amount of interest from Chinese financial institutions to set up subsidiaries in Qatar, given the country's massive $140 billion infrastructure investment over the next five years which could generate huge opportunities for Chinese companies.

Qatar has invested $2 billion to $3 billion in the asset management sector to boost the country's financial services industry, according to Srivastava. The Qatar Exchange has also partnered with the New York Stock Exchange to strengthen the capability of its capital market.

Investment and trade between China and Qatar have increased steadily over the past years. The most prominent deal has been the Qatar Investment Authority's $2.8 billion investment in the initial public offering of Agricultural Bank of China in July.

PetroChina Co, China's largest oil and gas producer, also signed an agreement with Qatar Petroleum in May to explore natural gas in the Middle Eastern country.

"Traditionally, we see most of the investment come from the West," Srivastava said. "Now the trend is shifting and our investment relationship with the East and North Africa is getting closer."

China Daily