China International Capital Corporation (CICC), a Chinese partially state-owned multinational investment management and financial services company founded in China in 1995, plans to have closer ties, figuratively and literally with Saudi and the UAE deepening economic interests in the Gulf region.
Barry Chan, Managing Director, Head of Asia & Australia, Head of Investment Banking CICC said that the investment bank already has two offices set up and is working to obtain the licenses necessary to perform financial service activities, according to Bloomberg.
Chan added CICC wants to establish professional relationships with countries in the Arab world, a region, he explained, that was relatively new, large, and untapped market for Hong Kong financiers.
China has been strengthening bonds with regional players such as when Saudi’s Cabinet approved a decision in late March to join the Shanghai Cooperation Organization or the UAE-China first ever-yuan-settled energy deal that involved some 65,000 tons of Emirati LNG.
Read: Saudi strengthens strategic relations with China
Green investments
China’s green investment is expected to increase $2.32 trillion over the next five years, according to recent CICC estimates
Chinese businesses are engaging with China’s “dual carbon” goals which aim to peak carbon dioxide emissions by 2030 and achieve carbon neutrality before 2060.
As far as green bond issuances, China has become the world’s second-largest issuer in 2021, just behind the US, according to a study by MSCI in 2022.
According to CICC, green credit accounts for 90 percent of China’s total financing of green finance, while green bonds and green equity only account for 7 percent and 3 percent respectively.
China has introduced legislative policies on green financing, supporting eligible green enterprises to list on the stock market for financing and attract capital to fund green innovation.
This is all important because these aims create synergy with low and zero-carbon pledges enacted in the UAE and Saudi and CICC has invested in more than 450 green and low-carbon projects valued at $3.6 billion over the past decade.
The UAE Net Zero by 2050 strategic initiative is a national drive to achieve net-zero emissions by 2050 and aligns with the Paris Agreement, which calls on countries to prepare long-term strategies to reduce greenhouse gas (GHG) emissions and limit the rise in global temperature to 1.5 C compared to pre-industrial levels.
Saudi, the world’s biggest oil exporter, has pledged to cut its carbon emissions to net zero by 2060 and Saudi Crown Prince Mohammed bin Salman said the Kingdom would invest more than $180 billion to reach the goal.
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