UAE CHINA SIGN 13 STRATEGIC DEALS TO STIMULATE ECONOMIC GROWTH
Chinese President Xi Jinping met leaders of the United Arab Emirates (UAE) to sign 13 strategic and bilateral cooperation framework agreement to further improve the trade relationship and explore investment opportunities across several industries that were mutually beneficial in boosting respective economies. Chinese President’s visit to UAE is seen a significant step as the two-way trade between the both countries already crossed Dh 128 billion ($35 billion) in 2017. With more than 200,000 Chinese citizens residing and 4,000 Chinese companies active in UAE, the agreement is expected to stimulate economic growth in both countries, especially in UAE.
With China being a global superpower playing an active role in stabilizing the international economy, the visit of the Chinese President Xi Jinping’s to the UAE is expected to further strengthen the ties between UAE and China. A series of high-level meetings were arranged in the three-days visit aiming to strengthen ties between the countries, increase trade and investment opportunities, and expanding cooperation in the field of education, energy, renewable energy, innovation, science, technology and logistics.
UAE & China Enhancing Economic Cooperation
The UAE and China signed a strategic cooperation framework agreement to improve the trade relationship and explore investment opportunities across several industries that are mutually beneficial in boosting their economies. In addition, UAE and China aim to organize conference under the title “Belt and Road” to enhance communication, boost economic cooperation and establish sustainable trade and investment partnerships. Both sides are keen to enhance cooperation in economic and trade and encourage a mechanism of visit exchange between business owners and entrepreneurs of both countries under the Joint UAE-China Economic and Trade Committee.
Over three decades, UAE and China has build strategic relationship which has yielded in a fruitful trade and investment opportunities for both countries. As a result, UAE is currently the second largest trading partner with China in the Arab region, acquiring more than 23 per cent of the volume of Arab trade. Not to forget, UAE also serves China as a re-exporting hub enriching China’s outreach to Middle East and African markets.
Chinese President Xi Jinping’s visit will further boost trade relations between both countries as there is high demand for alternative oil supplies in China to meet its long-term energy needs. Trade between the two countries has primarily been in hydrocarbons and other sectors that include construction, electronics, machinery, clothing, tourism and metals.
Enhancing Cooperation in Private Sectors
UAE and China also agree to enhance the role of private sector in both countries building partnerships in various economic sectors including education, innovation, technology, energy, renewable energy, food and artificial intelligence, logistics and transport. The two sides are keen on sharing knowledge in building special export-oriented economic zones, establish industrial projects and provide training to small and medium sizes enterprises to increase economic activity.
UAE China Energy Partnership
Abu Dhabi National Oil Company (ADNOC) and China National Petroleum Corporation (CNPC) signed a deal that would enable them to explore both upstream and downstream business opportunities that are mutually beneficial. ADNOC and CNPC will explore potential Chinese investment in a number of the planned downstream projects, including an aromatics plant, a mixed feed cracker and a new refinery. ADNOC will also partner with CNPC’s assets in China for international growth.
In the Upstream process, CNPC along with ADNOC will explore and develop six oil reserves located in Abu Dhabi and also establish a technology hub linked to the Al Yasat concession, in which CNPC has a 40 per cent of the shares. These initiatives has a potential to create more value from UAE’s Oil & Gas resources providing greater access to Chinese market, while on the other hand helps meet the expanding energy needs of China.
Chinese Tourists Growth in UAE
The tourists inflow from China has increased significantly in Dubai and UAE over the past few years. Dubai’s Department of Tourism and Commerce Marketing (DTCM) revealed that Dubai witnessed an increase in Chinese tourist by 41 per cent from 2016 to 2017 with the number of overnight Chinese visitors increased by 119 per cent since 2014. During the first two months of 2018, the number of Chinese travellers to UAE was recorded to be around 86,400. This accounted to 86.4 per cent of the overall visitors in 2017.
There are currently around 100 flights per week that connects UAE and China. On arrival visa is provided to Chinese tourists since the fourth quarter of 2016 which has resulted in tourists growth. By the end of 2021, UAE expects to increase the Chinese tourists inflow to 600,000 visitors on an annual basis. Based on the current trends, Chinese visitors are expected to play a huge role in realising Dubai’s Tourism Vision, which aims to welcome 20 million visitors per year by 2020.
Impact of the Partnership on UAE’s Economy
The new strategic agreements that has been signed between UAE and China are expected to open up several opportunities. China has been a large importer of oil and hydrocarbons from the region, with this new treaty signed between the two countries, UAE has also become an investment destination to expand its footprint across trade routes stretching through central Asia into the Middle East and Africa. With potential investments from the Chinese market, the economy of UAE is expected to improve further especially in the field of construction education, energy, renewable energy, innovation, science, technology and tourism.
The initiatives taken by the Dubai tourism authority such as signing a MOU with Huawei, to showcase Dubai’s key tourist attractions on Huawei mobile phones, partnering with WeChat (a Chinese social media platform with an estimated one billion average monthly users) to promote Dubai as a tourism destination and offering on-arrival visa to Chinese passengers will further boost the tourism growth in the country paving way for many investment opportunities in Dubai and UAE. Considering UAE’s distinguished infrastructure and strategic position as a major commerce destination, the visit of Chinese President is likely to stimulate bilateral trade and economic activity between both countries.
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