Qatar And Chine Bilateral Relationships Have Potential To Expand And Deepen

Posted on by w2master
17 Jun

Doha Bank hosted an interactive virtual client conference  titled “Bilateral and Synergistic Opportunities between Qatar and China” on 16th June 2021. The Speakers at the event include Madam Sara Sada, Counsellor, Embassy of the State of Qatar in China, Ms.Liu Chun, Vice President, China Chamber of Commerce for Machinery and Electronic Products Import and Export (CCCME), Mr. Liu Yao, Secretary General of the Chinese Business Council in Qatar and the General Manager of the Corporate Finance Department at Bank of China QFC Branch and Mr. Henry Wong, Partner, M&A and Private Equity Tax, KPMG Advisory (China) Limited.

Mr. Peter Lo, Chief Representative Officer, Doha Bank Shanghai Representative office gave the Welcome and Introductory note.

Dr. R. Seetharaman thanked H.E Mohamed Al Dehaimi, Ambassador, and Embassy of the State of Qatar in Beijing, China and H.E Zhou Jian, Ambassador, Embassy of the People’s Republic of China in the State of Qatar for valuable cooperation to conduct the conference successfully. He gave insight on Global & Chinese economy. He said “According to World Bank June 2021, the Global economy expected to grow by 5.6% in 2021. The Advanced economies are expected to grow by 5.4% in 2021 and Emerging Market and Developing economies are expected to grow by 6% in 2021. According to World Bank June 2021, China economy expected to grow by 8.5% in 2021. In May 2021, China took measures to pull back the yuan from a three-year high. The People’s Bank of China stated that financial institutions will need to increase the ratio of their foreign exchange deposits. The central bank set the yuan’s midpoint fix weaker against the U.S. dollar.”

Dr. R. Seetharaman gave insight on Qatar economy. He said “The Qatar banking sector witnessed a lending growth of more than 5% in the first 4 months of this year. Qatar’s fiscal 2021 had earmarked QR 194.7bn for spending. This year Qatar has come out with ambitious expansion plans on the LNG segment. In Dec 2020, Qatar Central Bank launched new currency notes. The easing of the 3.5-year-old regional dispute since Jan 2021 will improve trade, tourism and logistics. The normalization of relations between Qatar and its neighbors would help Qatar’s non-oil economy, with a resumption of travel links eventually lifting tourism inflows and greater interest of regional buyers in Qatar’s real estate market. In April 2021, Qatar Cabinet had announced support to private sector which was closed to COVID-19 precautionary measures. Qatar’s trade surplus had tripled YOY in April 2021.The promising investment sectors in Qatar include Fintech, Advanced Manufacturing Sector, Healthcare, Logistics and Education.” 

Dr. R. Seetharaman gave insight on Qatar – China Bilateral relationships. He said “In March 2021, the State of Qatar and the People’s Republic of China signed the protocol amending the agreement for the avoidance of Double Taxation and preventing financial evasions concerning income taxes between the two countries’ governments. In May 2021, Qatar Petroleum has signed 10 year LNG deal with China. Qatar will supply China’s Sinopec with 2 million tonnes per year. China is ready to work with Qatar deepen cooperation in the joint construction of the Belt and Road Initiative (BRI) as well as in fighting the COVID-19 pandemic. China’s full support to Qatar in hosting the 2022 FIFA World Cup. China an attractive destination for Qatari investors, in the areas of shipbuilding, manufacturing, petro-chemical, high-tech, hotel services, tourism, and financial services, etc. More than 200 Chinese companies in Qatar. The PPP law and Investment law will provide opportunities. The 2 tier residency program has encouraged participation in Qatar property market. Qatar Free Zone Authority had unveiled $3bn development and foreign direct investment fund in 2019 for SMEs. A draft law has come into effect in April 2021, allowing 100% foreign ownership in Qatari listed companies and provides opportunity for global investors. Many Qatari Banks had come up with Bond issuances in 2021. Qatar stock exchange has recovered to pre- COVID-19 levels. In April 2015 Qatar opened the Middle East’s first center for clearing transactions in the Chinese Yuan. China can explore relationships in SME and Contract sector. Trade finance and investment opportunities also exist.”

Madam Sara Sada, Counsellor, Embassy of the State of Qatar in China gave insight on Qatar – China relationships and trade ties. Since 1988 the diplomatic relationships begins and gradually progressed across all spectrum of areas.  She gave insight on political visits between Qatar and China. In 2014 we witnessed strategic partnership after witness of HH Sheikh Tamim bin Hamad Al-Thani visit to china. In economic area they are working to promote trade. Bilateral trade is mainly on LNG and chemicals. China is second largest of buyer of LNG. Demand of LNG growing in China. There are number of measures to build financial cooperation, currency system and financial system in Asia, establishing currency swaps and bond markets in Asia. Qatar needs technology and experience of Chinese Companies. Qatari Govt promoting partnership with China. It should include Built and Road initiative in its National Plan. The economic relationships have potential to expand and deepen. Cultural relationships have become another area and plan to expand in coming areas. Qatar has seen potential in China Tourism industry’s-operation between Qatar and China during 2020 is an example of International cooperation and friendship.

Ms. Liu Chun, Vice President of CCCME gave insight on “bilateral & synergistic opportunities between Qatar and China”. In recent years, China and Qatar relations have developed comprehensively and rapidly.  In 2020, bilateral trade volume between the 2 countries recorded as USD 10.9 billion. China’s main export items are machinery and equipment, electrical and electronic products and metal products.  China’s main import items are LNG, crude oil, polyethylene and other energy products.  We see increasing Chinese companies participation in various Qatar key projects like Water Strategic Mega Reservoirs, Lusail Stadium, Hamad Port, telecommunications network and others.

Mr. Liu Yao, Secretary General of the Chinese Business Council in Qatar spoke on the topic “Entrepreneurship: Prosperity and Success in Qatar”.  Liu highlighted the key attractions about doing business in\with Qatar.  These include Qatar’s stable political position amongst Middle East countries, top tier GDP per capita, fast growing economy and others.  China has competitive edge in IT technology and equipped with leading skills in infrastructure construction.  Also, Chinese entrepreneurs are quick to react to fast changing market conditions and efficient in cost control.  This will enable Chinese investors to succeed in the Qatari market.  The China Business Council in Qatar could provide valuable market information and organize business trips to both Qatar and China.  The ultimate objective is to further promote bilateral trade and investment flows between the 2 countries.

Mr. Henry Wong, Partner, M&A and Private Equity Tax, KPMG Advisory (China) Limited presented those common topics of concern (from tax perspective) on cross border investment.  These include appropriate holding structure, onshore legal entities selection, financing and profit repatriation.  A high-level comparison between Qatar and China on regulatory framework, form of company structure, foreign exchange control and accounting policy was also presented to the participants.  Henry also covered details of various tax (corporate income tax, individual income tax, value added tax, stamp duties, real estate tax, consumption tax Customs duty and others) applicable in the two countries.  Finally, Henry gave a brief summary of key tax treaties between the two countries.