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ABU DHABI/WAM
The United Arab Emirates has emerged as a key player in regional and global development, driven by its visionary leadership, strategic location, and favourable business climate.
This established the country as an influential economic force, particularly in supporting major global initiatives such as China’s Belt and Road Initiative (BRI), launched by President Xi Jinping in 2013.
The UAE’s active participation in the BRI, whose ninth summit will be held in the Hong Kong Special Administrative Region of the People’s Republic of China on 11-12 September under the theme “Building a Connected, Innovative and Green Belt and Road”, along with its strong ties with China in general and Hong Kong in particular, underscores its commitment to economic development and international cooperation.
As a regional economic powerhouse, the UAE continues to make significant contributions to the initiative, with 65 participating countries representing 30 percent of the global gross domestic product (GDP).
The country has invested US$10 billion in the UAE-China Joint Investment Cooperation Fund to support BRI projects in East Africa and signed 13 memorandums of understanding (MoUs) with China in 2018 to invest in multiple areas within the UAE.
Data for the first half of 2023 showed that the value of the UAE’s non-oil trade with the countries within the BRI reached US$305 billion, which contributed 90 percent of the UAE’s non-oil trade during that period and achieved a growth of more than 13 percent compared to the first half of 2022.
Around 88 percent of the UAE’s imports from countries participating in the BRI represent 94 percent of the UAE’s non-oil exports to these countries, and 92 percent of re-exports go to these countries.
The Belt and Road Initiative, a massive infrastructure and investment project, aims to connect Asia, Europe, and Africa through land and maritime routes. The UAE, with its strategic location, has become a critical point in the success of the initiative.
The ninth edition of the summit comes as the UAE and China celebrate 40 years of diplomatic relations in 1984, with China being the UAE’s number one trading partner in the world.
Recent data released by the Chinese Ministry of Foreign Affairs showed that during the first half of 2024, the volume of trade exchange between the two countries reached US$50.108 billion, including US$18.66 billion in UAE exports and US$31.448 billion in imports from China.
A closer examination of economic relations between the UAE and China highlights strong cooperation and coordination at all levels, as evidenced by the 800-fold increase in the volume of trade exchange between the two countries since the establishment of diplomatic relations between them.
The two countries aim to reach US$200 billion in trade volume by 2030.
The two countries signed more than 148 bilateral agreements and MoUs in various fields, and the volume of the UAE’s non-oil foreign trade with China during the past year reached AED296 billion, equivalent to US$81 billion, a growth rate of 4.2 percent compared to 2022, thus maintaining China’s position as the first trading partner of the UAE in its non-oil trade in 2023, accounting for 12 percent of that trade.
UAE investment flows to China totalled US$11.9 billion between 2003 and 2023, covering sectors such as telecommunications, renewable energy, transport and storage, hotels and tourism, and rubber, while Chinese investment flows to the UAE totalled US$7.7 billion during the same period.
While relations between the UAE and China have witnessed great strides of cooperation in all fields, the UAE’s relations with Hong Kong are of particular importance; Hong Kong – as a special administrative region in China – plays a vital role in the Belt and Road Initiative and the UAE has a special relationship with it, especially in the context of trade, finance and logistics.
The UAE’s total non-oil trade with Hong Kong reached US$12 billion in 2022, a growth of nearly 50 percent in 10 years, while Foreign Direct Investment (FDI) from Hong Kong in the UAE reached US$2.1 billion, mainly in retail and automotive (73 percent), manufacturing (19 percent), and transport and storage (5 percent).
Hong Kong acts as a gateway for UAE companies to access the Chinese market and other parts of Asia. Both the UAE and Hong Kong are major financial centres, with significant cooperation in areas such as banking, insurance, and capital markets.
The UAE’s active involvement in the Belt and Road Initiative, supported by its strategic ties with China and Hong Kong, reflects its firm commitment to sustainable economic growth and international cooperation.
As an influential economic powerhouse in the region, the UAE continues to make valuable contributions to various global initiatives, contributing to a more interconnected and prosperous world.