Made-in-China products change industrial patterns in Middle East

By Xie Jun Source:Global Times Published: 2018/5/16 18:23:40

Consumers shop in Dragon City, the Chinese shopping mall in Bahrain, on May 9. Photo: Xie Jun/GT

Made-in-China products, once considered cheap and of low quality, are slowly becoming an indispensible part of consumer life in the Middle East. And they are even changing the local industrial landscape of some countries in the region, including through the regulation of commodity prices.

One of those countries is Bahrain, an island kingdom in the Middle East and a promising market for Chinese traders.

On the evening of May 9 at around 7:30pm, Dragon City, a Chinese product shopping mall in Bahrain, was brightly lit and crowded with local customers. Located in a city called Diyar Al Muharraq in the northeastern tip of Bahrain, Dragon City, opened in late 2015, is now home to more than 1,500 stores. That means it is now 100 percent let, Patrick Zheng Shuo, Middle East regional president of Chinamex Middle East Investment & Trade Company, which runs Dragon City, told the Global Times.

Decorated with traditional Chinese elements like red lanterns, Dragon City in its appearance is similar to a typical small domestic commodity shopping mall, like the ones you usually see in Yiwu, East China's Zhejiang Province, only neater, shinier and more stylish.

The mall's shops sell a wide range of products from furniture and jewelry to cosmetics and fabrics.

Huang Shan, a native of Central China's Hubei Province, opened his first shop in Bahrain's Dragon City in 2015 selling toys. Gradually, his business expanded, and now he owns about 20 shops in the mall that sell a range of goods including daily necessities and handbags.

The products sold in his shops are imported from places like Yiwu and Chenghai of South China's Guangdong Province.

Before leaving China, Huang said he weighed up his options in the Middle East and finally chose Dubai in the UAE. But then he found that doing business in Bahrain was "much simpler."

"For example, people here love to settle deals with cash, instead of with credit cards like what often happens in China, which I think is good for business," he told the Global Times on May 9.

According to Huang, the profitability of each of his shops differs. "But in general, if you do business seriously, it's not hard to make profit here," he said.

Bahrain's Dragon City was the second that was built in the Middle East, with the first one opening in Dubai in 2004.

Kingdom of opportunities

According to Zheng, about 7 million customers visited Bahrain's Dragon City in 2017, with about half of them being Bahrainis and about 40 percent being Saudis.

"Saudis don't always stop by here, but when they do, it is a special visit, as transportation is still not convenient around the mall," he said.

This demonstrates that Made-in-China goods are becoming more and more popular among local customers, not only because of bargain prices, but also because of improving quality, Zheng said.

"In the past, local customers often thought that all Chinese products were cheap in nature, now they are slowly changing their minds about this," noted Zheng. "We are showing them that if they want cheap stuff, we have it, and that if they want quality goods, we have them also."

Bahraini Aqeel Abbas told the Global Times that he is very fond of Made-in-China products.

"Price is one reason. For the same product, the price of it outside Dragon City is almost double. Also, the quality of Chinese products is fine as well. I have a television whose screen was assembled in China. I've had it for about eight years and it still works well," he told the Global Times on May 8.

He also said that he often prefers to buy Made-in-China products online, despite the fact that shipping takes a couple of weeks.

'Side effects'

According to Zheng, now that China-Bahrain trade has boomed, local commodity prices have lowered as a "side effect."

Miho Saito, deputy managing director at Chinamex Bahrain Management Co, said that she once saw a toy that was being sold both in a local store and in Dragon City. At first, the toy cost about 100 dirham ($27) in the local store and about 66 dirham in Dragon City. But after about two weeks, the price of the toy slumped to about 60 dirham in the local store.

"Generally, Made-in-China products only have a limited impact on small local merchandisers, while the businesses of big local traders aren't affected at all," Zheng said.

Furthermore, local land prices have been driven up as a result of the construction of the Chinese shopping mall. According to Zheng, the average land price around Dubai's Dragon City surged to 500 dirham per square meter from just 1 dirham after the shopping mall was established.

"Also, when we first entered the land that would soon become Bahrain's Dragon City, it was like a desert, now it is somewhat like a commercial landmark," Zheng said.

Huang also said that there are now even villas, apartments and a warehouse near Bahrain's Dragon City.

Open policies

According to Huang, companies in Bahrain's Dragon City and the Dubai Multi Commodities Center allow overseas investors to have a 100 percent stake in them, a major pull factor for Chinese investors like him.

"In other countries in the Middle East, locals can have a 51 percent stake in overseas-invested companies almost for free, and they get to have a share of the companies' profits," he said, adding that although some investors secretly sign contracts with locals that ban them from intervening in the company's business, whether those contracts hold any weight in real disputes is hard to say.

Khalid Al Rumaihi, chief executive of the Bahrain Economic Development Board, said that Bahrain firmly supports globalization.

"The world is growing smaller, and we want to make it easier for overseas products to be exported here. If we make it difficult, we are hurting the consumers. We believe that globalization is ultimately going to help the US and China and smaller countries like Bahrain," he told the Global Times.

But Huang said that the overall trade environment in the Middle East is not all like the situation in Bahrain or Dubai. "For example, in some China towns in other Middle Eastern countries, Chinese traders engage in vicious price competition," he said.

Zheng said that in countries like Saudi Arabia, the transportation infrastructure network is not complete and therefore it is hard to trade big-sized goods like furniture there.

Newspaper headline: Bankable Bahrain


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