BY MOHAMMAD SHOEB
DOHA: China has immense potential for foreign investments. Its thriving sectors, the so-called ‘local Afghan caves’, including oil refinery, Shale gas, Islamic banking and insurance, ICT, biotechnology and desert greening technologies are offering tremendous investment opportunities for the Qatari and GCC capital. Investment in these sectors can ensure a vibrant trade relationship with high returns in future, says a Beijing-based Persian American scholar.
“Private and public equity investments in several distinct industries including infrastructure, city and township development, energy, desert greening technology and other resource-base sectors can ensure significant returns,” said Farzam Kamalabadi (pictured), President of Future Trends Group, in an interview with The Peninsula recently.
He added that among the world’s most strategic geo-political regions such as North America, South America, Europe, Asia, Africa, Australia and others, China and greater Far-East plus the Middle East have the highest potential for mutual benefits, but there is least cooperation between the two. There is a great possibility for establishing a “New Silk Route Corridor”.
There have been instances of China’s flow of services in Qatar in the field of oil and gas, infrastructure and construction sector, but he calls it “underutilised”. Farzam believes that the problem is not the lack of will. The problem lies in the lack of enough exposure.
Advocating to change the “inertia and the habit”, he advised not to look for a “comfort zone” while making investment decisions.
“Thinking that the US has more transparency and China doesn’t have transparency, we don’t know their culture and who makes the decisions. This is an invisible China wall which is not physical but mental. All these barriers need to be taken away,” he reiterated.
He also highlighted about the importance of understanding the huge potential between the two regions for economic diversification.
There is a great potential for Islamic banking system in China. China is not aware about the content, spirituality, technical and commercial aspects, style and significance of an Islamic banking system.
“There is a big room for Islamic banking in China, but very little effort has been made in this regard,” he said. Asked if China, being a communist country, has room for a product based on Shariah, he said: “China has transformed into a country where there is not a totally closed door and also not a totally open door. It depends how you edge yourself in.”
He also advised that Islamic banking system should not be introduced in China as a religious banking service or product. “I don’t mean we should go only as an Islamic banking system to the Islamic regions of China. We should go to the main stream to the highest level to the central bank to explain it as the best system for risk diversification.”
According to Farzam China has a lot of solutions and harsh-weather resilient plants for greening deserts.
“There is a leading entrepreneur Wang in Ordos city, Inner Mongolia, in northern China. He has created a miracle by greening 5 sq km of desert, which is very much in view of United Nations,” said he.
Wang, with the support of the Mayor of Ordos city and Party Secretary, Un, and Vice-Mayor Thoe, has developed a 7 star hotel just like the Arab style in the middle of that desert. And now he is planning to expand the green area up to 20 sq km.
He has grown plants and herbs that require less water and they are more resilient to the wind transfer of sands. And the by-products of those plants are being used to produce medicines.
Over the last 40 years, he said, the 85-year old Wang has collected nearly 30,000 varieties of bacteria that are used to develop naturally home-grown bio-fertilisers to replace chemical fertilisers. “Out of four main patents, the US has one and they have three,” he said.
China’s upstream energy sector is closed and has limited scope for foreign investments. But shale gas and other related technologies have high-end opportunities, according to Farzam.
About China’s refinery sector, he said that it is also a good area for foreign investment. Nearly 30 percent of the refinery is owned by the private sector.
There are nearly 80 private refiners of small and medium sizes. And all of them put together have the installed capacity to refine nearly 120 million tonnes of raw materials. But all of them face shortages of raw materials such as crude oil and natural-gas condensate.
“China’s private oil and gas sector is approximately a $2tn industry. But these are fragmented markets that need to be integrated. I use the analogy to refer them as ‘local Afghan caves’. Investors from GCC and Qatar can come and play a significant role,” he said.
Farzan cautioned that the region will fall behind if it continues to believe on misconceptions about China. China became the number one destination for foreign direct investment (FDI) surpassing the US, 10 years ago.
“There are no holding corporations from the GCC and Qatar. This is the time to form a Qatar-China Holding Corporation to capture the mega-wave of growth.”
The Peninsula
