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Home / ANALYSIS / UAE central to Middle East role in China’s Jinping-backed Belt and Road

UAE central to Middle East role in China’s Jinping-backed Belt and Road

by Oscar Rousseau on Aug 4, 2018


The UAE is the gateway to the Middle East for China, which has, with backing from President Xi Jinping, started to roll out its trillion-dollar Belt and Road Initiative.
The UAE is the gateway to the Middle East for China, which has, with backing from President Xi Jinping, started to roll out its trillion-dollar Belt and Road Initiative.

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China’s trillion-dollar Belt and Road Initiative (BRI) is more than just a soft power play – it is an attempt to strengthen China’s geopolitical and business influence around the world.

The multilateral infrastructure programme that spans three continents is already spurring development and investments in Malaysia, Pakistan, Cambodia, Greece, and the UK, and has been described as ‘the project of the century’ by Chinese President Xi Jinping. In the Middle East, Kuwait, Oman, Saudi Arabia, and the UAE have expressed an interest in building developments that will bring Asia and the GCC closer through China’s project, which conservative estimates value at $4tn.

While the numbers underpinning the project are enormous, regional contractors are, in all likelihood, yet to fully grasp the road bumps that they may encounter if they decide to participate in one of the world’s largest construction projects. Launched in 2013 by Jinping, BRI – also known as One Belt, One Road – is the Chinese government’s development strategy to build ties along the overland Silk Road Economic Belt, and a naval trading route known as the 21st Century Maritime Silk Road. Through the development of major infrastructure projects across land and sea, BRI aims to promote the flow of people, goods, and services across Asia, Africa, and Europe. It is a beast of a project, and due to the Middle East’s strategic proximity to all three continents, China has expressed its desire to help the region fund the construction of infrastructure projects that can support BRI.

The pomp and pageantry of Jinping’s state visit to the UAE in July highlighted the UAE’s intent to forge closer trade ties with China. In fact, at least 13 cooperation agreements and memorandums of understanding (MoUs) were signed between the two nations during Jinping’s visit, forming a solid foundation for BRI in the UAE.

During Jinping’s visit to Abu Dhabi, the Chinese head called on countries such as the UAE to join “China’s express train of development” by participating in BRI – and recent project launches suggest the UAE has already boarded the train.

It is important to first understand the deep ties that already exist between China and the UAE. Abdulfattah Sharaf, HSBC Bank Middle East’s group general manager, its chief executive officer of the UAE, and head of international, tells Construction Week that the UAE’s position as a re-exporter of goods means closer collaboration with China on BRI makes financial sense for all stakeholders.

He adds: “The historic ties between the UAE and China are underpinned by compelling economics. Almost 60% of trade between China and the UAE is currently re-exported to Europe and Africa, and HSBC research forecasts that trade in goods between the two countries will grow at around 9-10% per year until at least 2030.

“The potential of China’s BRI adds another dimension to the business relationship, providing opportunities in infrastructure and construction, transport, logistics, tourism, healthcare, education, and many other sectors across the UAE’s increasingly diverse economy.”

With Sharaf’s comment in mind, it is not surprising that the UAE’s notable BRI projects are located close to the country’s ports and trading zones. The latest of these projects is one that was agreed during Jinping’s state visit to the UAE.

Dubai port operator DP World struck a deal with Zhejiang China Commodities City Group to build a 3km² export hub, called Traders Market, at the Jebel Ali Port and Free Zone. This cluster of markets will house international traders, creating a platform to sell fast-moving consumer goods, building materials, cosmetics, pharmaceuticals, and energy and power utilities, as well as engineering and technology goods. At the time of the announcement, Sultan Ahmed Bin Sulayem, DP World’s group chairman and chief executive officer, said: “The new Traders Market will provide an ideal platform for traders to showcase and sell goods in Dubai to local and international businesses. We look forward to working with the Zhejiang China Commodities City Group, we will continue to support China’s BRI and innovate for mutually beneficial development.”

Construction will start on the project after preparatory works have been completed, but a development timeline is yet to be revealed. The agreement increases the level of Chinese influence and investment in the UAE, whilst highlighting the latter’s appetite to work with China on projects related to BRI. It also complements an earlier deal DP World struck with Zhejiang Seaport Investment and Operation Group to build a warehouse in Yiwu, China, for exports heading to Dubai.



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