Work got under way this week on "Dragon City" in Bahrain, a unique Chinese retail scheme aimed at doubling China’s exports to the Gulf region.
The first phase of will be a $100m Chinese-themed shopping mall that China hopes will increase its exports to the Gulf from $500m to $1bn a year.Â
When finished next summer the mall will be a kind of factory outlet for Chinese manufacturers setting up on the artificial island of Diyar al Muharraq, located off the tiny Gulf state’s northern coast.
This is a megaproject that will boost trade relations between Bahrain and China and establish the kingdom as an important gateway to the Gulf– Abdulhakim Al Khayyat, the chairman of Diyar al Muharraq
The masterplan for the new Chinatown envisages the construction of 700 retail stores and a 5,000 sq m warehouse area. Maher Al Shaer, the chief executive of Diyar Al Muharraq, said later phases of the development would include a themed "Xian dining street where patrons can enjoy a choice of restaurants and food brands within an authentic Asian setting".
The project is being developed by Diyar Al Muharraq, the largest developer in Bahrain, and is being built by local construction firm Nass Contracting.Â
The client for the scheme is Chinamex, a company founded by the Chinese Ministry of Commerce in 2000 as part of its "Go Global" campaign to create multinational Chinese corporations and brands. It has previously attempted to found a business incubator in Atlanta, with mixed success, and has opened an enterprise centre in Amsterdam.
Hao Feng, chairman of Chinamex, in a meeting last year with Abdulhakim Al Khayyat, the chairman of Diyar al Muharraq
This latest scheme is being seen as a way for Chinese firms to up their activity in the Gulf market. Hao Feng, the chairman of Chinamex, told Bahrain’s Gulf Daily News that 300 Bahraini and Chinese companies had expressed interest in being part of the project. The UK property company Cluttons was awarded the contract to handle the leasing part of the scheme.
Abdulhakim Al Khayyat, the chairman of Diyar al Muharraq, said: "This is a megaproject that will boost trade relations between Bahrain and China and establish the kingdom as an important gateway to the Gulf Co-operation Council states."Â
Two large Chinese corporations, the IT firm Huawei and the Bank of China have already opened offices in the kingdom.
However, Dragon City has met with some opposition from Bahraini traders, who signed a petition against the project last year. Bahrain’s Chamber of Commerce reassured traders that their interests would be protected, including requiring that retail units be rented to Bahraini traders, and that they be given soft loans to spend on importing Chinese goods. According to chamber of commerce figures, about 80% of goods in Bahrain markets are made in China.
China is currently the third largest market for Bahraini exports outside the GCC.