Bank licenses are never easy to obtain in Saudi Arabia, especially for foreign banks. But the Industrial and Commercial Bank of China (ICBC) appear to have done just that, opening up a branch office in the country. Most likely ICBC will be offering simple cash management and treasury services to Chinese clients, much like the bank’s branch in Abu Dhabi.
But this article in Okaz (Arabic) suggests that the bank may also replace the middlemen that Saudi buyers use when importing from China. Not sure if I agree.
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In June, while in Riyadh, I heard stories that Indian goods were increasingly popular, at the expense of their Chinese competitors: apparently, the Indian goods were cheaper.
That makes sense given China’s rising labor costs and the fact that the Indian rupee has depreciated 29% against the Chinese renminbi over the past 2 years.
It also helps that Indian expatriates have opened their own retail chain stores across the Middle East: Home Plaza and E-Max Store are two commonly cited examples.
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Only a few years ago, Chinese construction companies were making large gains overseas. But their low-cost and labor-intensive business model is now running into some serious problems.
Let’s start with this article in the Saudi Gazette that reports how a number of Chinese companies have pulled out of the Saudi construction market, unable to meet demands for higher-quality buildings.
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A sharp eyed reader in Jeddah tells me of an increase in the number of Chinese workers in the city, as the local authority apparently try to speed up post-flood reconstruction. His Taiwanese contacts in the city suggest numbers of between 10,000 to 15,000.
The increase contrasts with the opposition to Chinese workers during the construction of the first phase of the Mecca light-rail project. Mecca’s authorities tried to deflect the criticism in 2008 by announcing that 600 of the 6,000 Chinese workers had converted to Islam.
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