ASEZA seeks to boost Chinese investments in Aqaba

Jordan being eyed as part of ‘Belt and Road’ initiative

(Photo: Jordan News)
AMMAN — The head of the Aqaba Special Economic Zone Authority (ASEZA) Nayef Bakhit met with Chinese Ambassador to Jordan Chen Chuandong Monday to discuss ways to increase and promote Chinese investments in various sectors of Aqaba’s Special Economic Zone.اضافة اعلان

During the meeting, Bakhit reviewed ASEZA’s financial incentives and economic opportunities with the envoy, and noted that the arrival of Chinese investments to Aqaba is evidence of the governorate’s ability to attract foreign investments, while reminding attendees that China is one of Jordan’s most important trading partners.

Ambassador Chen praised the investment environment in Aqaba, calling it “one of the most secure environments in the Arab region”.

Bakhit pointed to the need to strengthen ties between Jordan and China, through enhancing mutual cooperation in the Jordanian tourism sector, which could be done by boosting marketing strategies that would promote Aqaba as a tourist attraction to Chinese visitors. He also emphasized the economic potential of attracting Chinese tourism to the Jordanian “Golden Triangle”, which encompasses Wadi Rum, Aqaba, and Petra, and that this could be done through “low-cost or chartered airlines”.

In 2018, the flow of China's direct investment in Jordan reached a record high of approximately $85.62 million, and the stock amounted to approximately $312 million in 2019. Bilateral trade reached a record $4.11 billion in 2019.

Former vice chairman of the Amman Chamber of Commerce Musa Saket told Jordan News, “Chinese investments in Aqaba are not a new phenomenon.” The Aqaba International Industrial Estate (AIIE) has been internationally recognized as one of the world leading projects of its type. It was recently ranked 10th out of the MENA “free zones of the future” in a list compiled by the FDI Intelligence Magazine, put out by the UK’s Financial Times.

PBI Aqaba, Shenzhen Chamber of Investment, and Aqaba Development Corporation signed a memorandum of understanding in 2017 for the development and marketing of the AIIE expansion area as a Shenzhen Aqaba Industrial and Logistics Estate. The estate is in the southern area of Aqaba Special Economic Zone near the new Aqaba Port Development. The estate will occupy an area of about The Shenzhen Aqaba Estate will be managed as an expansion of the AIIE. The new Shenzhen Aqaba Estate is planned for an additional $700 million investment and should create an additional 2,500 jobs. The Shenzhen Aqaba Industrial Estate will be the first Shenzhen-based project of its type outside China, according to MarcoPolis.

“There are some Chinese investors who are key stakeholders in some manufacturing companies located in Aqaba, which produce LED lights,” Saket added. “Jordan is attractive to Chinese investors, partly because of Jordan’s involvement with the Greater Arab Free Trade Area (GAFTA), as well as ... the (US-Jordan) Free Trade Agreement,” he said.

Because there are no FTAs between China and the US, Chinese investors have been aiming to seize lucrative opportunities to get involved in garment exports to the US, through Jordan’s trade agreement with the US. This is why some Chinese companies have been investing in garment and LED light companies based in Jordan. “Through Jordan’s GAFTA membership, these same foreign investors aim to boost their garment exports to the Gulf region, by benefitting from Jordan’s free trade agreements with the Gulf states,” Saket said.

Former minister for state of economic affairs Yusuf Masur told Jordan News, “it is possible for Aqaba to be a part of China’s well known Belt and Road Initiative in the future, and as such an expansion would be gladly welcomed by China.” He also said that “China could be a useful trading partner for Jordan in the future, although I do not believe that Chinese investment into Aqaba will harm Jordanian-American relations.”

Similarly, economic expert Wajdi Makhamreh also expressed skepticism towards the idea that Chinese involvement in Aqaba may cause a setback to Jordanian-US relations. “I do not believe that the US will consider an economic collaboration between Jordan and China to be highly problematic. The idea of Jordan achieving an economic renaissance, is a goal that matters for the US,” he said.

Makhamreh added that “we must not forget that the Jordanian government is looking for financial contributors to the National Water Carrier Project, which involves water desalination. China can possibly play a role in this regard,” he said. “Chinese investments into Jordan can also lead to an increase in Chinese tourists arriving to the Kingdom, and it can partially solve some of Jordan’s unemployment issues by creating jobs. The fact that Aqaba has many tax incentives is bound to be financially attractive for Chinese investors,” he concluded.

Political analyst Labib Kamhawi told Jordan News that “generally speaking, Jordan’s political relationship with China is a secondary one, not a primary one. The US is the country that Jordan has a primary relationship with. However, China has historically attempted to be involved in the Jordanian electricity sector, as well as getting involved in Jordanian infrastructure projects.”

The fact that Jordan has welcomed Chinese investments especially in Aqaba, most likely indicates that the US does not view such a measure to be detrimental towards Jordanian-US relations, Kamhawi said.

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