Will the visa-on-arrival facility for Chinese visitors to the UAE lead to a surge in Chinese investment in the country?
Presently, the UAE is China’s second largest trading partner and the largest export market in the Middle East and North African (MENA) region. There are over 4,000 Chinese enterprises operating in the country with trade volumes totalling billions of dirhams.
The relaxing of visa restrictions is expected to have a resounding effect on numerous industries such as tourism and real estate. More than 500,000 Chinese tourists visited the UAE in 2016. Further, the first half of this year saw the arrival of close to 267,000 Chinese tourists at the city, marking a huge year-on-year rise of 11 percent.
As for the impact of Chinese investment on the property market, it is known that Dubai real estate is an important investment option for Asian expats. Chinese expats were the seventh biggest investors in Dubai real estate in 2015, investing around 460 million dollars. In the first half of this year, Asian investors comprising Indians and Chinese nationals grabbed top spots for real estate investment in Dubai, according to Dubai Land Department estimates. The Chinese real estate market has been characterised by low rental yields, low interest rates, accelerating prices and low capital gains. Faced with this scenario, Chinese investors are globalising their property portfolios and have found the UAE real estate market to be a rewarding investment option.
Importantly, the new visa rules are also expected to encourage more Chinese companies and investors to explore business opportunities in the UAE, set up operations and use the country as a hub for foreign investment and to access other markets in the MENA region. This will boost ties between China and the UAE and open up investment flow into the UAE from China.
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