China & UAE in the New Tech Economy

[Music] how I'm very happy to be here at the China UAE investment Summit as we heard from Dr Sai this is the place to be and of course we have to take a close look at the bilateral relations between both countries it's absolutely a thriving relationship and lots of Investments and business to be done that's why we are here today gentlemen and let's put things into perspective to kick things off a little bit Leong you are based between Beijing and here the UAE you see the bilateral relations um eye to eye very closely of course tell me a little bit um what your business focus is right now with Choy Global uh between China and the UAE here yes thank you for having me uh I am particularly happy to be here because exactly one year ago during Abu Dhabi Finance week we announced we will set up a venture Fund in Abu Dhabi and bring Chinese technology companies to Abu Dhabi and so it's the right time to turn in our report C for the year and we are a venture capital firm for the past 20 years we invest in China Mobility Technologies and innovative consumptions and in the past N9 years we deploy over $2 billion in China Market starting about four years ago we began to look Eastward to um the Middle East and evaluated the regional markets and for all the good reasons the prior speakers or the panels yesterday mentioned we decided to set up our Fund in Abu Dhabi it's the best gateway to the Middle East and Africa market so here we are a great strategic decisioning in Abu Dhabi in that case we heard the uh Chinese perspective bonjo masimo let's go to you now to have the Abu Dhabi investment office perspective from the West to the east tell me what are your key priorities this year in terms of Investments and then maybe also looking ahead at 2025 ababi investment office is uh an agency a government agency focused to attract inward Investments and facilitate Investments like what we have here in order to ensure that the Investor's journey is acceptable satisfactory and also where all the investors might find an Abu Dhabi satisfaction for their business plans so our major focus is to facilitate the uh introduction within the Emirate mostly we do this with financial and non financial support um it's a unique way to connect the investors to the environment uh let me just focus a little bit regarding the financial support that we use to provide to the investors uh when there is an investment of course there are some might be some cost Associated such kind of Investments but if there is a contribution to the Emirate GDP employment and of course and there is a high contribution in terms of amortization we are very happy to support investors to come here and we provide them we participate to some of their cost through rebates but of course many times we have been asked by investors to enjoy the presence in Abu Dhabi to say but we want to be connected to the local opportunities and this is also where adio which is the short I mean acronymous of abudhabi investment office our years to call AD you connect the investors and their businesses with the local procurement uh and this is exactly one of the key role of adio to support especially with government procurement and we prepare a list of golden products that we consider favorite and preferred in order to ensure that whoever invest in Abu Dhabi can have immediate edge of their business plan but it's not only that there is also something more in that and which is just recent of adio it was announced in July of this year in order to support the companies not only to attract but also to scale up after they've been registered and the Emirate what we do we have moved all the enablement activities from the Department of Economic Development like the industrial Bureau the industrialization trade Commerce and digital economy into adio in order to provide programs to support investors and reward them that they decided to stay in Abu Dhabi Dominico I don't know why we have such a heavy Italian presence here on the panel today but bonjour to you as well um you are from the aib so let's take things back to uh Beijing again um with the II elu with the one Bel and Road uh initiative of course uh this region has seen an increasing significance and importance as well in terms of Investments and and business um tell the audience where your key priorities and business focus is uh this year next that's right thank you Martina yes Italian but happily living in Beijing Global C where our headquarter uh is I represent Asian infrastructure Investment Bank uh which is the uh newest uh established multilateral Development Bank headquartered uh again in China uh we uh um we have 110 uh member countries uh joining uh aib including UAE you uh the United Arab Emirates actually we consider a regional member in the in the terminology of aib to to emphasize uh you know the closeness uh between these two regions uh and we have done uh uh already U several investments in the in the area in GCC in particular uh and also Beyond uh in Africa aib in a nutshell is about infrastructure is it's in our name and so there is a lot there is going on both in China and in this part of the world that connects uh the two the two uh entities uh together so we say that uh one of our priorities is infrastructure for tomorrow uh and uh uh that's what we are doing so we are trying to uner uh Investments that are technology driven and infrastructure driven so that's what we do quite a big portfolio as well Patrick I see you at a lot of financial events last time was at a business conference uh in Saudi um you live also between London and Hong Kong all over the place we could meet elsewhere but always in this region and it seems everything is happening here so tell me where your um where you see opportunities here between football and ambassador's clubs and everything that you're doing you have such a big portfolio just like like aib on a smaller scale maybe thank you Martina good afternoon everyone uh my name is Patrick I'm the chairman of sangs grw where family office uh headquartered Hong Kong I've been spending a lot of time in the UAE since 2003 uh very active in the last few years um sec we're we're focused on Innovation and technology so we typically invest into um technology and then take the companies public um we've set up a family office in the UAE also have an asset management arm in adgm and um this is like the right time where UAE and China have the best possible trade the platform the next 5 10 years in Abu Dhabi itself is very um exciting and um lot of sectors including AI gaming green energy and you know digital infrastructure are are projects that we're looking at here let's now uh dive a little bit deeper into the specific areas Leong from AI to Smart infrastructure uh Green Technology sustainable agriculture as you know such a big ticket investor also there especially do you see the opportunities here yes I think all the macro factors stated uh quite well and for us out of the 100 portfolio startups we invested in China we are only selecting about 5 to 10 companies with our first fund and then the very strong theme is decarbonization and what we want to pick the Technologies with there two criterias one is very relevant to the economic and also um social developments here here secondly is that they would require high level localization meaning that there not one siiz fits all approach and one good example is that one of our early investment that we did 9 years ago Neo the electric vehicle maker recently announced with its ababi investor c5n to set up the R&D Center in Abu Dhabi and also produce a localized product vehicle and likely to uh produce in Egypt um so where we see it's really the latest technologies that can be coupled with the thriving Local Economic growth yeah China ranks as the uae's third largest source of FDI forign direct investment of some 6.3 billion US dollar uh in 2020 2 and is also uh the largest trading partner in the Arab world in terms of non oil trade um for China what's your outlook for the future well it's very promising I mean for in order to achieve the Falcon economy that you have seen and you heard announced also during the abudhabi finance week uh the relationship the economic development relationship between China and specifically Abu Dhabi are very important uh we can identify some important key drivers so far uh the the economic partnership has been driven as of now through two major drivers the first one was to be part of a belt one road and in order to ensure that we have a proper logistic facilities there were investment in the ports and in the logistic facilities the second one was to announce trade and you have seen from the figures which has been shown before by Professor Nasser uh $82 billion has been achieved now the trade between the two countries but now emerging opportunities are coming thanks to the Falcon economy specifically in Abu Dhabi so what we're doing in Abu Dhabi we are trying to build the new economy and we are prioritizing 13 prioritized clusters two of them have been already announced and launched where China can play a very important role one is the smart and autonomous vehicle industry where all the AI and the technology which can come from China can be really an enabler in order to boost and grow such kind of new Mobility New Mobility which is linked to be more smart in the cities and so logistic and smart cities are exactly one of the key drivers that we see important another one which has been launched has been uh recently launched is called AGA it's agrotech and water abundance cluster so even in agrotech we have seen a lot of opportunities coming from China many many investors are coming here in the Clusters and they want to set up in order to ensure you know for especially UAE is very important the food security so having the opportunity to build uh Agro food through new and unconventional techniques is something that we are absolutely interested to welcome so these are two major drivers it all sounds absolutely great but Dominico there must be challenges as well as such a huge lender with the aib which are some of the headwinds that you might face Maybe specifically in of new tech economy the name of our panel here yeah as a as a multilateral Development Bank that operates across multiple jurisdictions we do get involved in in uh large complex uh infrastructure uh Investments That span crossboard so these are projects that uh can easily run into trouble uh both for implementation reasons but also for economic financial reasons uh one of the one of the things that we are uh of course uh uh living right now is changing macroeconomic and um you know monetary uh economic conditions particularly in the dollar space where we have most of our U lending activities so we have a huge portfolio and growing portfolio uh uh of loans and most of them uh are in uh uh in US dollars so when you when you look uh at this type of Investments which are also long-dated Investments they span more than 10 12 15 years years in duration you can you can come across uh uh during the the various Cycles with uh financial difficulties uh so one of the things that uh for example we are looking at is um to uh expand more uh so what we call local currency uh lending so going into different jurisdictions uh and uh and and try to uh uh facilitate uh borrowers uh by lending in their own uh in their own Cur uh currency so that's uh uh that's one of the things that uh that we are doing regulation is definitely a key challenge uh across different jurisdictions Patrick um you have been active in so many IPOs and m&a transactions and so on what kind of activity do you see especially in the technology area what kind of what sorry activity or deal flow do you see now between especially thee and and China I think as I said before the there's a record high of uh bilateral trade between UAE and China it's the biggest uh trade of all the Arab countries um one of the sectors I believe that's a great opportunity is um uh decarbonization yes uh which was mentioned before I think solar is a big thing here only 78% of um both Saudi and the UAE is uh using fossil fuels only 2% is um green energy so I think solar panels is growing every year that um UAE is buying from China uh also geopolitical reasons that China's been hit by not being able to sell a lot of the solar panels to uh Europe and the US uh we've seen a lot of uh big um announcements recently um the China UAE Exchange Trade Center which was set up uh a few days ago where it'll promote trade science Innovation education uh mazas Mazda the the Clean Energy company here in Abu Dhabi has um will co-invest with um the silk fund from China to look at green energy funds outside the UAE which makes this truly Global so I think that the reason why we are here today in Abu Dhabi shows us that Abu Dhabi is the road leading globally not just to the Mina region I'm sure Abu Dhabi will be pleased to hear that um Leong um you have a long experience uh between uh both uh countries traveling back and forth um you have also been a VC investment firm with a Choy Global for the past 25 years so really long experience and set up a joy glob adgm as well uh to invest specifically in UAE but also the wider Gulf um Arab region what has been your experience so far and what kind of advice can you share with your audience uh yes we have our own experience and um uh I would like to share a few things uh one is that the I shall mention that the uh the reason we could quickly obtain the financial license and have our three four portfolio Companies Incorporated in adgm owing to good colleagues at adio and also adgm and so for the past two years these two buildings are probably the most frequently visited by myself and my colleagues so that is very positive and uh what I would like to point out the fact is that we during the whole week and yesterday and today and more when we talk about the call ations and Investments often time people focus on Dual level project level Investments we as a VC take a portfolio approach the reason for that is that to mitigate the risk and also to grow the ecosystem and we would like to do a portfolio approach and in a way similar to growing a forest instead of hunting for a single prey so by that way we hope this is a longer and sustainable approach going forward secondly is that we also raise money from regional and local investors and take companies public locally here and if we think the previous globalization is for the ultimate shareholders value We Believe going forward People Like Us will take globalization in creating local value and also benefit local societies so that's what we want to benefit and also work with the local community on a much longer sustainable uh process and one thing one positive experience that I would like to share with the regulators and also friends here is that in China we do work with local and Regional government funds in China we call guidance funds to systematically invest in a basket of portfolio companies for a local uh uh economy and result is very positive uh you can you can uh look into it give you one example uh we invested our Aon investment is in a company called lucking coffee the largest coffee chain in China today three times of Starbucks in China we actually relocate their head quarters from a very big city to a much smaller City so today Starbucks in six years grow into a franchise that serve 90 million customers every quarter and they actually bought half of Brazil's exported coffee beans so that City benefits enormously and also becomes our hub for food and beverage in consumption perform companies you've definitely done a great job here at masimo and I also read recently that you're among Forbes Middle East top 100 CEOs in the Middle East so did you know that all right um talk to us a little bit about your incentives here in Abu Dhabi you know at the um adio what kind of new plans do you have to attract even more uh Chinese Capital so incentive component uh it's uh it's uh important to uh absorb a little bit of the initial cost of investors in order to ensure that they cannot reach the brick even in a very shorter time um we changed the logic on giving such kind of incentives at adio and it this happen exactly this year uh under the leadership of his Excellency bad arama the director General we decided to do something which was more a rewarding incentive rather than to be a grant or a subsidy so our incentives have a different nature than you find in other countries so the incentives are provided based on reward on achieving some Milestone results this because the role of a government is not to subsidize the economy yeah but is to create an environment where the private can invest and flourish and by doing that we have seen a lot of uh much more interest on the on such kind of financial incentives we do production based we do on revenues we do on export because another key point that you have noticed that many many times investors were coming to Abu Dhabi and considering Abu Dhabi the destination of their project actually we what we want them to look at Abu Dhabi as the starting point not the Final Destination that's why if from here they use Abu Dhabi as a platform to export towards the three continents that Abu Dhabi easily reach thanks to its connection thanks to the cooperation economic partnership agreements done which give access to 2.2 trillion of potential consumers of goods and services well this is something that we wanted to stimulate and incentivize that's why some incentives are also linked to this exports yeah Patrick I read that you are the first member from Hong Kong to join the Emirates Family Association so that was kind of a big step right a milestone to open the the doors as well to more uh family office Corporation and also you're planning to launch the Hong Kong ambassadors Club here in the region tell us more about those plans so the Hong Kong ambassadors Club is a NGO in Hong Kong which we started almost two years ago uh we're trying to bridge Hong Kong to the rest of the world the two main regions that we're focused on is the Middle East and Southeast Asia so in uh last year we we LED seven delegations to the UAE Saudi Arabia Qatar Bahrain and Kuwait uh and this year in September we hosted our first year anniversary business Forum which was the guest of honor was the chief executive John Lee of Hong Kong Kong and also we managed to get adio to be the sponsor uh we had a big delegation from ABAB coming to Hong Kong uh we're now in discussions to hopefully uh host a forum in Abu Dhabi at some point next year and hoping to um bridge and connect business people investors from Abu Dhabi Hong Kong and the rest of the world to create more business and um collaboration between the two Nations Dominico for the aib uh do you see expansion here in the g a region and UAE in specific or will it be more or less a status quo in the next few years yeah there's um there's different dimensions uh in terms of the cooperation overall definitely yes uh I just want to give you one example uh uh aib is headquartered and based in Beijing China uh we never had an office overseas our first office overseas was open right here in Abu Dhabi uh and we have now about 30 people uh from the from the bank headquartered here just across the street uh in ATM and uh we are exploiting uh this location as a connectivity hub for us and uh for my particular Department I manag the treasury operation in the bank one of my my most senior colleagues in treasury is based here in Abu Dhabi in terms of investment for obvious reasons we are a multilateral we are a Development Bank and uh uh Abu Dhabi is not a natural recipient of financing from a Development Bank of course you know uh highly rated country very stable it's uh uh probably the other way around I am a happy Financial investor in Abu in Abu Dhabi the the the the head of the Abu Dhabi government uh debt office good friend yanis I I beg him to issue more debt all the time I would love to buy to make investments there's not so much need unfortunately but but um I think uh that they could opportunities to uh also um identify Investments here for example the previous panel I heard space port in UAE wow that is something that for aib would really fit in the strategy for Investments that we try to uh pursue uh one the last thing I will say one of the the First Investments we did in this region not in UAE but it was in Oman for example was one of the first projects we did in in the bank and was about financing a Broadband project so there can be opportunities I think yes and we are going to finish this panel uh in one minute so everyone of you please tell us where in the digital transformation and Innovation sector the new economy you see the biggest opportunity in very brief words Leong uh we definitely see it in Mobile payment driven the new Lifestyles and also the so solar based portable um Energy Solutions in the region fantastic masimo uh artificial intelligence uh for sure fintech and e-commerce nice yes and then it will be space port no maybe the Italian connection it has to be AI I I I think definitely definitely so you know everything connected to blockchain and the relative data centers that will have to be built which we are already getting into financing some of those uh so capability for to manage enormous amount of data I think that would be key yeah yeah or e-commerce for Italian fashion or food delivery for pizza right give it to me anytime last but not least is I would say gaming all right okay we have a very diverse panel here different opinions lots of investment opportunities between China and Thee thank you so much cangas San give it up for Leong masimo Domino and Patrick thank you [Music]