Friday, March 2, 2018

Kuwait eyes cut of China's trillion-dollar Silk Road project

Oscar Rousseau

Saturday، 3 March 2018

China and Kuwait are “eager to collaborate” on construction projects as the former pumps billions of dollars into its Belt and Road initiative.

China wants to work with Kuwait on infrastructure projects, including the construction of Al-Harir City and the development of five uninhabited islands off Kuwait's eastern coast.

Both countries expressed a desire to work together on construction, energy, infrastructure, and mass communication projects after a meeting in Beijing on 1 March.

No formal agreement were struck. But the fact that both countries expressed an interest in closer collaboration could be significant; it may herald the start of a rise in Chinese-backed investment into Kuwait projects, including construction.

READ: Can 'New Kuwait' plan overcome market challenges?

One project in Kuwait attracting Chinese interest is the former's five islands’ development project. This is a plan  to build up five uninhabited islands in Kuwait. It is also part of China’s gargantuan effort to revive the old Silk Road trading route that once connected Europe to Asia. Called the Belt and Road Initiative, China is rebuilding a vast network of trading hubs around the world to increase regional trade and economic cooperation. 

The Asian Infrastructure Investment Bank (AIIB), Silk Road Fund, and the New Development Bank have already committed $1.1tn to develop infrastructure networks under the Belt and Road Initiative, according to HSBC.

This trade network will stretch to five the islands in Kuwait that represent 5% of the country's landmass.

Building up the five islands is expected to create thousands of jobs, attract international investment, and significantly boost Kuwait’s gross domestic product.

The plan was created by His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, who wants to transform Kuwait into a financial and commercial centre. The project falls under the government's Kuwait 2035 infrastructure strategy.

China and Kuwait established diplomatic relations in 1971. Two-way trade between the countries is valued at over $9bn, much of which is derived from China’s demand for oil imports from the Arab world

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