In 2015, the Chinese embassy reported nearly 300,000 Chinese nationals living and working in the United Arab Emirates (UAE). These figures include traders who arrived in Dubai in the 1980s from Fujian and Zhejiang provinces, young professionals working in tourism, retail and finance, as well as employees
in state-owned enterprises involved in energy, construction, telecommunications and finance projects.
China is the UAE’s biggest import origin country and ranks third among export destinations... Dubai is home to Dragon Mart, the world’s biggest Chinese trading hub outside China, which welcomed 120,000 daily visitors and housed 1,700 Chinese retailers as of 2015. According to Dubai Chamber
of Commerce and Industry, Chinese investment in the UAE amounted to USD $2.33 billion in 2016.
Chinese investments in Dubai, however, have declined in recent years as a result of falling oil prices, which have dealt a serious blow to the UAE’s economy. The country’s capital, Abu Dhabi,
is largely dependent on oil and gas exports, and declines in commodity prices have led to a drop in revenue. While Dubai is not as reliant on oil incomes as the other emirates, it has not escaped the effects of falling oil prices due to its role as the primary investment and trade destination for oil-rich countries in the region.
Increased levels of political engagement from Beijing in Saudi Arabia have also affected Chinese investments in the UAE. Since 2016, Chinese president Xi Jinping has met with King Salman of Saudi Arabia twice. In January 206, Jinping visited Egypt, Iran and Saudi Arabia while in March 2017 King Salman of Saudi Arabia visited Beijing. In contrast, no such meetings have taken place between China and UAE leadership since 2016. Moreover, the UAE has not been identified as one of the 63 Belt and Road target countries.
In light of weak economic growth and shifts in the Middle East’s political economy, this report explains current trends in Chinese trade and investment in the UAE, and identifies emerging opportunities for China in the Emirates and the Gulf region.
The content of the following report draws upon data and insights from more than 30 business owners, professionals and officials. Names, titles and company information mentioned in the report are considered sensitive information and may not be re-published without express permission of the Sino-Africa Centre for Excellence at Botho Emerging Markets Group.
These briefs are informal notes for stakeholders on the implications of shifts in development and trade between China and various countries across the Middle East and Africa. They highlight emerging trends or topical issues, and are issued every quarter. Contributions are welcome.