These are transformative times for the global economy and even more so for developing economies, which can count the UAE and China amongst their number. Many investors and experts are increasingly looking towards the east and emerging markets, particularly China.
You may wonder, what was the state visit by His Highness Sheikh Mohamed bin Zayed Al Nahyan to China all about. There is one underlying theme to the current status of strengthened relationship and that is the Belt and Road Initiative (BRI). This much-vaunted initiative, that is both momentous in its nature, yet simply not widely understood by most people, will transform global infrastructure and China is the driving force.
The Belt & Road Initiative offers a unique opportunity to address a significant infrastructure gap in developing countries that is hampering global trade and economic development. We can see that the BRI is an open initiative for a variety of countries, that unifies more than two-thirds of the global population. There are opportunities for nations regardless of status.
The initiative is doing a great deal for global trade at a time of suppressed growth. Over the past six years, the total trade volume between China and the other participating countries has surpassed $6 trillion and 82 industrial parks have been established, creating nearly 300,000 local jobs.
The huge potential in this great country is often underestimated. About 35.2 percent of global GDP growth will come from China over 2018 and 2019. For those who are cynical about the Belt and Road Initiative and think it is overblown – let’s say they are correct. It’s an ambitious programme and even if the initiative achieves a result shy of the full potential, it would still be a tremendous success.
By connecting more than 65 countries across Europe, Asia and Africa – the BRI will cover 63 percent of the world’s population and 29 percent of global GDP, and ultimately make it easier for goods and services to reach the growing middle classes whose disposable income is increasing. A great deal of success has been achieved, as 126 countries and 29 international organizations have signed more than 170 cooperation agreements of various kinds under the framework of the initiative. Over the past six years, the total trade volume between China and the other participating countries has surpassed $6 trillion and 82 industrial parks have been established, creating nearly 300,000 local jobs.
The UAE is one of the leading proponents and advocates of the Belt and Road Initiative and was also one of its first signatories.
The UAE’s commitment to the BRI has been evident from the very start. The UAE was a founding member of the Asia Infrastructure Investment Bank, and we remain fully committed to the central mission of bringing the vision of the BRI to life. Since the AIIB’s foundation Chinese investment into the UAE has grown by 33% from 2015 alone, to USD 2.8 billion. The fourth annual meeting of the China-initiated Asia Infrastructure Investment Bank (AIIB) was recently carried out in Luxembourg in July, with Abu Dhabi, UAE hosting this annual meeting in 2021. The AIIB has now greatly expanded to a milestone 100 approved members worldwide.
There is great benefit in the BRI for the UAE, as China considers our country the lynchpin to the initiative. There is good reason for this – our country is strategically located at the crossroads of a vast market. A collective population of nearly three billion people and a combined GDP of more than $7.4 trillion, all within an eight-hour flight of the UAE.
Due to our strategic position, China’s Silk Road Fund has been financing infrastructure projects in the UAE. For instance, the China-UAE Industrial Capacity Cooperation Demonstration Park in Khalifa Port, in our capital Abu Dhabi, is strengthening international industrial capacity cooperation between our two countries. Here, the Etihad Aviation Group and the Jiangsu Provincial Overseas Cooperation and Investment Company Limited are working together hand in hand.
With our successes, we prove to be a great example to other countries participating in the Belt and Road Initiative. We have advanced and sustainable cooperation, with Shanghai Electric collaborating with the Dubai Electricity and Water Authority (DEWA) and ACWA Power, to support the largest solar power plant in the world, as they undertake the 950 MW solar project in Dubai.
Cross-border investments have increased in a significant way, and Chinese companies and UAE companies are working in tandem to share technology, capital or market access. Financial cooperation is also deepening, as demonstrated by the agreement for China Everbright Group to set up its MENA financial and investment hub in Abu Dhabi General Market.
Experts expect the Belt and Road Initiative to play a pivotal role in transforming the geopolitical landscape of the Asia-Pacific as well as globally. American strategist Parag Khanna argued in his book, Connectography: Mapping the Future of Global Civilization, that the investment in infrastructure in the next 40 years would exceed that of the past 4,000 years. The Belt and Road Initiative is a major part of this change.
It is my view that people considering the BRI need to look a little deeper. This initiative will not only be a great initiative for infrastructure, economy and trade, it will also increase prosperity and connectivity, which will be a great driver for peace and harmony
So, the opportunities are just warming up, and the UAE as a developing economy has a great opportunity here. As our relationship progresses and deepens with China, as the recent visit by His Highness saw evolve still further, the UAE will be well-placed to capitalize on the energetic, booming network of economies along the BRI.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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