The addition of the UAE to the BRICS group has extended the Gulf country’s multilateral reach as it joins the group previously made up of Brazil, Russia, India, China and South Africa.
Alongside the UAE, Saudi Arabia, Iran, Ethiopia, Egypt and Argentina were welcomed into the fold.
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For the UAE, this marks an opportunity to deepen further trade and economic ties with China. The move is also expected to see the UAE economy benefit as investment across sectors –including space, medicine, finance and technology – is projected to pick up.
The 40th anniversary of diplomatic ties between the UAE and China in 2024 will mark the deepening of their trade and investment cooperation.
Abu Dhabi, the capital of the UAE, is a favoured destination for Chinese investors due to its geographic position, well-established infrastructure, enabling business environment, strong and stable economy, and skilled talent. More than 6,000 Chinese companies have set up in the UAE, according to global business and legal services provider Intertrust Group.
Bilateral agreements such as the Belt and Road Initiative (BRI) have facilitated growth and positioned Abu Dhabi as a pivotal partner in China’s global trade strategy. The governmental and trade relationships between the two have evolved into a comprehensive partnership that combines economic dynamism with shared values.
To understand more about the history of this relationship and the future of China-UAE bilateral relations, GlobalData spoke to a representative from the China Office of the Abu Dhabi Investment Office (ADIO).
How would you describe the governmental and trade relationships between China and Abu Dhabi?
The strategic alliance between China and Abu Dhabi is a powerhouse of collaboration, fuelled by shared interests. Trade and investment stand as significant pillars of this relationship, with both sides recognising the advantageous complementarity between China’s manufacturing prowess and Abu Dhabi’s investment potential.
China’s primary exports to Abu Dhabi are machinery, high-tech products, textiles and light industrial goods, while major imports include liquefied petroleum gas, crude oil, refined petroleum products, aluminium and aluminium products. Abu Dhabi’s abundant oil and gas resources cater to China’s energy needs, fostering agreements for oil supply and joint investment in energy projects.
China’s finesse in areas such as artificial intelligence (AI), sustainable technology and top-tier manufacturing resonates with Abu Dhabi’s ambition to transition into a knowledge-driven economy. Collaborative efforts in these arenas underscore a shared journey towards technological advancement and sustainable growth.
Cultural exchanges, educational partnerships and tourism ventures have nurtured people-to-people connections. Abu Dhabi’s dedication to fostering cultural diversity harmonises with China’s emphasis on mutual comprehension and cross-cultural interactions.
What is the history of this relationship?
Diplomatic ties were formally established in 1984 and over the years the partnership has strengthened.
Abu Dhabi’s status as a global hub for energy resources aligned with China’s growing demand for energy, leading to oil-supply agreements that solidified their economic partnership.
The launch of the BRI in 2013 marked a significant turning point, enhancing connectivity between China and Abu Dhabi, with the latter’s geographical location and well-developed infrastructure contributing to its emergence as a crucial node in China’s global trade network.
In 2018, a joint statement between China and the UAE elevated their relationship into a comprehensive strategic partnership, signalling a commitment to deeper collaboration. Agreements on renewable energy projects reflected a shared commitment to sustainability.
What are the standout sectors for trade between China and Abu Dhabi?
There are many standout sectors for trade between China and Abu Dhabi, including:
Energy and petrochemicals
Bilateral agreements, investments and joint ventures (JVs) play a vital role in ensuring stable energy supplies and fostering economic growth. In 2022, China imported 42.819 million tonnes (mt) of crude oil from the UAE – a 34.1% year-on-year increase. Chinese companies acquired 10% concession rights for two offshore oilfields in Abu Dhabi in 2018, following a 12% concession rights gain for an onshore oil block in 2017.
Infrastructure and construction
Chinese companies participate in major infrastructure schemes, including roads, bridges and urban developments, in Abu Dhabi.
Technology and innovation
China’s rapid technological advancements, particularly in areas such as AI, telecoms and e-commerce, offer substantial collaboration potential with Abu Dhabi. Partnerships in research and development drive innovation and create new business opportunities.
Financial services and investment
Initiatives include the establishment of investment funds and financial hubs to strengthen financial ties between the two economies.
Renewable energy and sustainability
China’s commitment to green and low-carbon technologies aligns with Abu Dhabi’s sustainability goals. Collaborations in renewable energy projects, clean technologies and environmental solutions contribute to the efforts of both nations to combat climate change.
Healthcare and biotechnology
Healthcare collaborations are gaining traction, with both nations exploring innovative opportunities in medical research, biotechnology and healthcare services.
Tourism and hospitality
Abu Dhabi’s thriving tourism sector appeals to Chinese tourists seeking unique cultural experiences and luxury travel.
What opportunities do Abu Dhabi and ADIO offer Chinese businesses?
Abu Dhabi’s prime geographical location holds immense appeal for Chinese investors, strategically positioning them for local opportunities and to tap into the expansive markets in the Middle East and North Africa (MENA).
Abu Dhabi’s quick access to 80% of the world’s population within an eight-hour flight serves as a catalyst for Chinese businesses eyeing global growth. In addition, the city’s world-class airports and premier ports provide seamless logistics for international trade, transforming the city into a central hub, providing investors with access to diverse markets.
Recent legal reforms enable foreign investors to hold 100% ownership in companies in Abu Dhabi and the city’s dedication to transparent trade and low 5% tariffs offers a competitive advantage. There is the extra benefit of obtaining certificates of origin through local manufacturing or processing, resulting in tariff exemptions.
Known as the ‘Capital of Capital’, Abu Dhabi hosts a substantial sovereign wealth fund, alongside a strong venture-capital network. Collaborations with esteemed European and US educational institutions help set the stage for a knowledge-based economy.
Q. What is the role of ADIO’s China office in helping companies to access these opportunities?
A. Established in 2021, ADIO in Beijing serves as a crucial bridge between the emirate and Chinese investors. It plays a pivotal role in facilitating understanding, collaboration and investment.
The office helps Chinese investors to pinpoint opportunities in the Abu Dhabi market and move quickly, providing insights into key sectors, regulations and investment incentives. It also acts as a resource hub, connecting Chinese enterprises with potential partners, local ecosystems and valuable market intelligence and helps to streamline the investment process.
The office organises events, seminars and networking sessions, fostering meaningful connections that can lead to productive partnerships.
Do you have any examples of company success stories?
In February, WeRide, a Chinese company, announced its strategic establishment in Abu Dhabi, marking a transformative leap in autonomous driving innovation in MENA. In collaboration with Bayanat, a geospatial intelligence and AI company, WeRide introduced the TXAI autonomous taxi service. The successful completion of phase one trials highlights a monumental advancement towards smart mobility.
In December 2020, the UAE endorsed the registration and use of China National Pharmaceutical Group’s Covid-19 vaccine, making the UAE the first batch of countries to approve a Chinese vaccine. In March 2021, a joint effort between China National Pharmaceutical Group’s China National Biotec Group and the UAE’s G42 Group yielded the Hayat-Vax Covid-19 vaccine, which is produced in Abu Dhabi’s Kizad Industrial Zone.
The China-UAE Industrial Capacity Cooperation Demonstration Zone is a major project under the BRI. It is located 60km and 80km away from Abu Dhabi and Dubai, respectively, with a total planned area of 12.2km². The zone is in the Khalifa Economic Zone Abu Dhabi, adjacent to Khalifa Port. As of today, 20 Chinese enterprises have set up within the zone.
What trade deals are in place or planned between China and Abu Dhabi?
The BRI holds significant importance for China and Abu Dhabi in terms of investment and trade opportunities. For China, it serves as a comprehensive framework aimed at enhancing connectivity and cooperation across various regions including Asia, Europe and MENA.
For Abu Dhabi, the BRI enhances the city’s role as a gateway to the MENA region, providing access to diverse markets and facilitating trade flows. The cooperation and investment opportunities within the BRI create avenues for the city to attract foreign direct investment, diversify its economy and strengthen its economic ties with China and other participating countries.
The 2018 Joint Statement Between the People’s Republic of China and the United Arab Emirates on Establishing a Comprehensive Strategic Partnership underscored the pivotal role of cooperation in the oil and gas sector as a cornerstone of pragmatic collaboration between the two nations.
In 2018, the UAE broadened its visa exemptions from diplomatic passport holders to include Chinese ordinary passport holders, as well as UAE official passport holders.
How do you envision the future of the trade relationship between China and Abu Dhabi?
The future of the trade relationship holds exciting opportunities, given China’s expertise in cutting-edge sectors such as AI, green and low-carbon energy and high-end manufacturing. These strengths, combined with Abu Dhabi’s strategic positioning and investment-friendly ecosystem, are poised to infuse the emirate’s economy with fresh dynamism.
Collaborations in AI research, development and implementation could lead to innovative solutions across various industries. JVs in renewable energy projects and technology transfer could pave the way for cleaner, more efficient energy sources. JVs or partnerships could fuel the growth of advanced manufacturing sectors, bringing innovation and boosting local production capabilities. This collaboration would also foster knowledge exchange and talent development.
This partnership is poised to contribute to the growth trajectories of both nations, driving innovation, economic prosperity and sustainable development.
