UAE-China bilateral trade: a growing economic partnership

The UAE and China have a robust and growing bilateral trade corridor and commercial partnership that is strengthening year on year. Despite the impact of the pandemic, the two countries reflect a gaining vitality and booming economic cooperation which has led to record high bilateral trade in 2022. 

Why the UAE is a key economic partner to China 

As the UAE is already the Arab world’s second largest economy, its seeks to double the size of its economy by 2031.

The UAE Central Bank has estimated that the UAE is set to grow by 7.6% this year, marking its highest expansion in 11 years. 

According to Abdullah bin Touq, Minister of Economy, this is greatly due to the array of measures adopted by the government to enhance resilience of its economy such as; granting 100% foreign ownership, attracting talent and skills in all sectors, and tapping foreign direct investment inflows and unprecedented growth in foreign trade.

The UAE and China share a mutually beneficial trade relationship. China is the UAE's largest trading partner, accounting for over 15% of the country's total trade. The UAE is also a significant investor in China, with investments totaling over US$2 billion. In addition to trade and investment, the UAE and China also collaborate on various initiatives, including space exploration, renewable energy, and technology. 

The UAE Ministry of Economy believe that the UAE-China bilateral trade is on track to reach US$200 billion by 2030.

According to the Dubai FDI Monitor, Chinese FDI inflows to the UAE reached $9.1 billion in 2020, representing a significant increase from the $4.3 billion recorded in 2019.

The UAE is a gateway to China's Belt and Road Initiative

As one of the strongest economies in the region, the UAE is a natural partner of the Belt and Road Initiative (BRI). It has risen as a prominent global gateway for Chinese businesses, particularly with its unparalleled logistics infrastructure and position along the New Silk Road. 

The UAE has invested billions in infrastructure projects, from airports to roads, which have established the country as a vital hub for international trade. Over the past decade, the Emirates have been building and upgrading port infrastructure for the BRI, with Abu Dhabi Ports and Dubai DP World cooperating with major Chinese companies. 

Commercial partnership: Chinese businesses hub in the UAE

The UAE has been successful in attracting Chinese business with many companies using the country as a regional headquarters. 

The Emirates is home to more than 6,000 Chinese firms, including some of the world's largest businesses, such as Huawei, China State Construction Engineering Corporation, and China Petroleum Engineering & Construction Corporation. 

The UAE-China Business Committee works to expand partnerships for future economy especially in logistics, transport, tech, energy, and food security in addition to training for small-to-medium-sized businesses. China and the UAE have also been exploring joint ventures in free trade zones through ports, industrial projects and other advance industries. 

Overall, the UAE and China have a strong and growing bilateral trade relationship that is expected to continue to thrive in the coming years. The UAE's strategic partnership with China is a win-win for both nations, as they continue to collaborate on various initiatives and strengthen their trade and investment ties. As the UAE continues to invest in infrastructure projects and establish itself as a gateway to the rest of the world, the country is well-positioned to become an even more critical economic partner for China.