24EN Editor's Note:China's leading
banks may not be exposed to risks relating to Dubai's financial troubles, but some of the country's entrepreneurs haven't been so fortunate.
Investors from the east coast city of Wenzhou, which has a reputation as the home of China's savviest businessmen, have seen their investments in Dubai backfire following Dubai World's announcement at the end of November that it would seek a six-month extension on debt repayments.
来自中国东部沿海城市温州的投资者发现，在迪拜世界(Dubai World) 11月底宣布把债务偿还延期6个月后，他们在迪拜的投资受到了冲击。温州商人素以精明绝顶而闻名。
Zhou Dewen, the head of the Wenzhou Small and Medium Enterprise Business Development and Promotion Association, told The Wall Street Journal that he estimates the combined losses of Dubai's 20,000 Wenzhou entrepreneurs at more than 1 billion yuan ($146.5 million).
Over the last decade Wenzhou merchants have followed an aggressive 'going-out' strategy, seeking out business opportunities around the world, from traditional import and export businesses to organizing overseas real-estate 'shopping trips.' Dubai soon became one of the favorite destinations for Wenzhou business, thanks to its open market, a huge demand for imported products and duty-free tax policies.
Since Dubai opened its real-estate market in 2002, the tiny desert oasis drew a huge influx of foreigners who came to invest and work. Of Dubai's current 1.4 million residents, the vast majority are expats and migrants. At the same time, housing prices in Dubai skyrocketed, with the average price for a villa rising from only 8,000 yuan per square meter in 2001 to more than 40,000 yuan per square meter before the financial crisis last year, according to Wang Weisheng, a Wenzhou merchant who has been doing business in Dubai for more than 10 years.
Inspired by the quick profits to be made out of speculating in the booming real-estate market, Wenzhou merchants doing business in Dubai began to buy multiple properties for investment.