Over the past two years we have spent a lot of time here at Rogue Money talking about the significance and growing influence of the Russian Eurasian Economic Union (EEU), and the Chinese led Shanghai Cooperation Organization (SCO). And as a corollary to this are the BRICS nations as well as the rising Eastern European economies labeled as the ‘emerging markets’.
But there is another region of the world that is also going through a Renaissance of sorts, and that is in the Middle East where the days of OPEC domination are quickly fading away, and individual countries are working towards transitioning their old energy based economies into something better geared for the future.
And while Iran slowly appears to be slowly shifting towards an eventual invite into the EEU, there is one Middle Eastern destination that is accelerating their shift towards China, and they are appearing more and more to becoming the next main portal along China’s Silk Road project.
Dubai's Multi Commodities Center, the largest free trade zone in the United Arab Emirates, has seen a strong surge in the number of Chinese companies as the Belt and Road Initiative drives new business opportunities.
Registrations of Chinese companies at the DMCC have grown by an average of 46 percent annually over the past five years.
"The number of Chinese companies setting up in Dubai and DMCC is on the rise," said Chief Executive Officer Gautam Sashittal. "But it is still a small portion of our 13,500 registered companies in total".
Located in the middle of the Maritime Silk Road, the zone has attracted around 150 Chinese companies since its establishment in 2002.
He said he believes the Belt and Road Initiative will drive the growth even more rapidly and provide new opportunities for small and medium-sized companies and startups in the trading and services sectors.
"With the increased digitalization of trade, international commerce will grow by $29 trillion over the next decade, bringing about 350 million new businesses into international trade," he said. "And that's where we are keen to grow trade relationships." – China Daily
Unlike Saudi Arabia and most of the older OPEC countries, Dubai has been reborn as a completely modern and cosmopolitan destination that is extremely inviting to businesses from all around the world. And while both London and Frankfurt battle it out to try to be the primary banking hub for China along the European section of the Silk Road, there is no competition for Dubai as they have already established themselves as the primary banking center for the Middle East.
In addition Dubai is also seeking to become the region’s new gold center as recent changes to Sharia Financial Laws have opened the door for Muslims around the world to invest in, and own physical gold for the first time ever outside of a currency or as jewelry. And earlier this month the Dubai gold exchange signed onboard with the Shanghai Gold Exchange to establish a new futures contract that will be denominated in RMB, and provide a way for customers to acquire physical gold from China in large quantities.
The DGCX last week announced commencement on trading in Shanghai Gold Future. Trading in financial products linked to India and China, two of the largest Asian economies.
The DGCX last week announced commencement on trading in Shanghai Gold Future. Trading in Indian gold and currency is a major hit on the DGCX platform with volumes in currency pair rivaling that of the Indian bourses.
The yuan-denominated gold contracts on DGCX marks the first-ever usage of the Shanghai Gold Benchmark Price in international markets. The launch of the DSGC was officially announced at the Dubai Precious Metals Conference (DPMC) last week. – The Daily Economist
So while the U.S. flails around trying to re-write and re-negotiate 20 year old trade deals with Canada, Mexico, Europe, and Asia, China and Russia are moving forward with the creation of something completely new, and are attracting economies no longer interested in dealing with most Western governments. And one of the biggest country’s that is jumping on board their new paradigm for the 21st century is that of Dubai, where in just a short amount of time they have quickly taken dominion over the financial affairs of the entire Middle East region.