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UAE reaps fruit of Belt and Road

Gulf nation hails China-proposed infrastructure program for contributing to economic diversification

By JAN YUMUL in Hong Kong | China Daily Global | Updated: 2023-07-28 10:00
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Common features

Xiong Jun, deputy general manager at the China-UAE Industrial Capacity Cooperation Demonstration Zone, said China and the Arab countries share many common features. And the Gulf countries are located at the crossroad of the Belt and Road.

"Currently, China has signed many cooperation agreements with Gulf countries, such as Saudi Arabia and the UAE. These two countries are major energy-producing and exporting countries and they have many similarities. But they have their own advantages in terms of business environment and industrial development which complement each other," said Xiong.

"Enterprises can choose where to set up their businesses according to their own development needs and industrial characteristics," he added.

Ebrahim Hashem, a former adviser to the chairman of Abu Dhabi Executive Office and former head of the strategy division of Abu Dhabi National Oil, said the UAE's economic vision is aligned with the direction of the BRI.

"China's achievements in technology, innovation, space exploration, nuclear energy, renewables, EVs (electric vehicles), and in many other fields are making China an attractive strategic partner for the UAE," said Hashem, who is also an Asia Global fellow at the Asia Global Institute of the University of Hong Kong.

According to the World Bank, the UAE's economic growth is expected to slow this year compared with 2022 due to a decline in global economic activity, contraction in oil production, and tightening financial conditions.

It said the real GDP is projected to grow by 2.8 percent in 2023, "reflecting a decline in oil activity growth of 2.5 percent", while a strong non-oil sector growth of 4.8 percent will soften the contraction in oil activities, driven by robust domestic demand, particularly in tourism, real estate, construction, transportation, and manufacturing sectors.

Business exchanges

Anis Khayati, an economics professor at the College of Business Administration at the University of Bahrain, told China Daily there has been an impression that economic exchanges between the UAE and China are focused on energy-related deals.

"This scene may be about to change in light of the fluctuations in oil production and UAE's attempts to diversify its economy. This may constitute an opportunity to strengthen economic ties between China and the UAE," said Khayati.

Khayati said China is expected to support the UAE's efforts to reduce dependence on fossil fuels and search for more sustainable sources of energy, by entering into partnerships to build power plants using solar panels, and intensifying research cooperation to create more technological alternatives in renewable energy. This is in addition to cooperation to benefit from Chinese experience in the use of nuclear energy for peaceful purposes.

"However, despite the opportunities for cooperation available to the UAE and China… economic relations between them can encounter long-term challenges related mainly to geopolitical aspects, as Western pressures may lead to opportunities (getting curbed) for developing economic relations below the desired levels on both sides," said Khayati.

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