China's central bank will establish a bank in the United Arab Emirates to clear yuan transactions by  end of 2016. That's according to Fang Min, a senior executive officer with the Agricultural Bank of China.

Fang says a clearing bank in the UAE could have a big impact on trade and investment in the Gulf. That's  because Dubai acts as the region's top business centre and handles flows of money and goods to countries in  the six-nation Gulf Cooperation Council and beyond.

Fang says one of the big four Chinese banks -- ABC, ICBC, Bank of China or China Construction Bank -- would become the UAE's yuan clearing bank. But he did not elaborate.