Huawei & Chinamex: Bahraini-Chinese Relationships Evolving – Focus from Chinese Investors on the GCC and Bahrain

October 29, 2015

As Chinese investors are looking to expand globally, they are naturally looking towards the MENA region, and in particular, the GCC, one of the world’s fastest growing regions. Bahrain, with its unique competitive advantages and most diverse economy in the region, has welcomed a number of Chinese delegations over the past year. There has been a marked interest from investors in the Kingdom, who are keen on taking advantage of the Kingdom’s status as the freest economy in the region, with competitive operating costs and a highly skilled national workforce, in order to access the neighbouring Gulf markets.

Already a number of leading Chinese businesses have launched their regional headquarters in Bahrain, including Huawei, Bank of China, who launched their first-ever Middle East office in the Kingdom, and Chinamex, the operating company behind Dragon City, a Chinese-themed shopping mall scheduled to open by the end of this year. Dragon City represents the first large-scale retail project undertaken by a Chinese company in the Kingdom and will host 500 Chinese businesses.
In September 2015 a a Bahrain business delegation, organised by the EDB, visited the People’s Republic of China on a 10-day roadshow which drew much interest from Chinese investors. It led to the signing of 15 agreements, highlighting China’s interest in the Kingdom, and paving the way for further investments.
Mr. Paul Fengnan, Country Manager of Huawei Bahrain commented on Bahrain’s business environment saying: “Chinese investors’ confidence in the economies of the GCC is strengthening, particularly with regards to Bahrain’s diversified economy. The kingdom’s economy, much like the Chinese economy, has recently witnessed major developments in the Manufacturing, Education, Science, Healthcare and Tourism sectors. The latest announcements on plans to invest $22 USD billion in the coming years on infrastructure projects in Bahrain will improve Bahrain’s business environment, making it more attractive and sustainable for the Chinese investors.”
Mr. Fengnan lauded the EDB’s efforts to attract more foreign investment into the Kingdom, and the support they provide to potential investors who are looking to expand their business.
Mr. Fengnan added: “Since China’s launch of the ‘One Belt, One Road’ development strategy, more and more Chinese enterprises are being encouraged to expand abroad and are showing strong interest in international investment. Roadshows, forums and meetings are great points of interaction and events like those organised by EDB have, in the past, encouraged the Chinese business community to understand Bahrain’s open and friendly business environment. We believe additional points of hosted interactions will continue to encourage Chinese enterprises to build bilateral business relations with Bahrain.”
Mr. Fengnan also affirmed that the decision to move Huawei’s regional operations to the Kingdom in 2009 came as a result of the highly competitive operating costs and liberal business environment, as well as potential for 100% foreign ownership in most sectors by international investors, making Bahrain an ideal gateway to the rest of the GCC and the wider Middle East region.  He added: “We also enjoy the quality of life that Bahrain offers its guests living in the country. Over the years we have been able to contribute significantly to the development of the country’s ICT industry.”
“Bahrain and the wider GCC are a strategic growth market for Huawei globally. Led by a vision of building a better connected world, we have adopted a long-term approach to local business development, research, and CSR. In recent years this has included establishing an Ideas Innovation Centre for local customers, as well as participating in and sponsoring local events such as the 2014 Bahrain Air Show, the GCC U23 Football Tournament, and so on.”
“We have also been investing in local talent development through our Middle East IT Competence Center in Bahrain, and are working towards building Bahrain’s ICT talent,” added Mr. Fengnan.
On Huawei’s future plans in Bahrain, Mr. Fengnan revealed: “Currently, developing Huawei’s partnerships with leading telecommunications service providers in the Kingdom is one of our top priorities in order to provide better services. For examples, Huawei is cooperating with ‘VIVA’ to develop wireless networks with exceptional coverage and a great customer experience and we are working with ‘Batelco’ to build a Fiber broadband network. We are also working on providing a range of ICT solutions to customers in government, education, finance, energy, transportation and other vertical sectors.
“Some of the partners that we have enjoyed working alongside include the Bahrain Defense Force, the National Guard, University of Bahrain, NEC B.S.C., and others. We have also been busy expanding our consumer and device lineup. We are now the number one provider of MBB terminals in Bahrain and one of the top three mobile phone consumer brands in the country. Some of our future projects will include enhancing cooperation with Bahraini customers to build a better connected Bahrain, with new technologies and solutions like 4.5G mobile broadband and a host of smart city solutions.”
Mr. Patrick Zheng Shuo, General Manager of the Bahrain branch of Chinamex, stated that work is on track for the grand opening of Dragon City in Bahrain later this year:  “We are constantly striving to provide good services for the local visitors. A platform like ‘Dragon City’ will create a lot of investment opportunities for all related parties, not only in the fields of trading, but also for services, finance and real estate as we seek to attract more investment and business from China and the region.”
Mr. Zheng Shuo hailed the growing cooperation between Bahrain and China in recent years. Mr. Zheng Shuo also commended the efforts by the EDB to further strengthen this relationship, particularly following His Majesty King Hamad bin Isa Al Khalifa’s visit to China in September 2013, which has greatly enhanced relations between the two countries.
Mr. Zheng Shuo also acknowledged Bahrain’s proactive initiative in responding to the “Silk Road” Strategy launched by the Chinese Government, allowing the Kingdom to work closely with Chinese companies on infrastructure project investments (such as Dragon City) to create a new trade hub in the region.
Mr. Zheng Shuo said: “China is becoming more globalised.  More and more Chinese companies and businessmen are expanding their operations worldwide, and the Middle East is one of their favored destinations. I think Chinese businessmen will look carefully into all options, taking into consideration operating costs, market scale, and commercial environment. Bahrain enjoys many advantages, including lower operating costs, a free economy, good financial facilities, and friendly and well-educated people, in addition to outstanding government services and high levels of transparency.
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