China and the UAE signed a raft of financial, business and trade agreements during a visit by President Xi Jinping to the UAE, underscoring Beijing’s rapidly growing interest in the Middle East.

Xi made the first visit by a Chinese leader to the Gulf state in 29 years, meeting two of its most powerful leaders, Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Sheikh Mohammed bin Zayed Al Nahyan, crown prince of Abu Dhabi.

They announced 13 agreements and memoranda of understanding, including approval for the first Chinese state-owned financial services firm to set up in Abu Dhabi Global Market, a financial center, while the Abu Dhabi National Oil Company and the China National Petroleum Corporation agreed to explore joint business opportunities, Reuters said in a report.

As both a major energy exporter and a hub for international trade, the UAE is an important part of Xi’s “Belt and Road” initiative to invest in infrastructure linking China by both sea and land to markets in Asia and Europe.

“We have many areas of political and economic agreement and a solid base of projects in the energy, technology and infrastructure sectors. More importantly (we have) a strong political will to start a greater phase of cooperation and integration,” Sheikh Mohammed bin Rashid wrote in a Twitter post.

“Today, we have exemplary relations with China and a Chinese leadership that sees the UAE as main strategic partner in the region,” he added.

China is the UAE’s second largest trading partner and biggest source of imports. The UAE is the gateway for about 60 per cent of China’s exports to the Middle East, and on its own accounts for around a quarter of total Arab trade with China.

UAE Economy Minister Sultan bin Saeed Al Mansouri said that total bilateral trade between his country and China is expected to reach $58 billion in 2018, up from $53.5 billion in 2017.

In 2013, Xi outlined the Belt and Road initiative which involves billions of dollars of infrastructure investment to reinvigorate the ancient overland silk road trade route and develop a new sea equivalent. The UAE sits close to both routes.

China’s commerce minister Zhong Shan said that his country was ready to cooperate with the UAE to promote globalisation.

“This future of cooperation is broad as both UAE and China are advocates of the economies and multilateralism. On this we have mutual interest and a joint position,” he said.

Silk Road initiative Deal

Among the crucial agreements signed by the two countries was the memorandum of understanding (MoU) concerning joint co-operation on the Silk Road Initiative and the 21st Century Maritime Silk Road Initiative.

The deal was inked by Dr Sultan bin Ahmad Sultan Al Jaber, Minister of State, and He Lifeng, Chairman of the National Development and Reform Commission (NDRC).

It will contribute to facilitating exchange and integration of commodities, technology and capital through mutual education and co-operation, reported Emirates news agency Wam.

Also the agreement will advance concerted development and joint progress in areas of economy, community, environment and other sectors, stated the report.

‘’The MoU is a clear indicator of the strong ties between the UAE and China and underscores the commitment of leaderships in both friendly countries to further consolidate their joint action to serve mutual interests and interests of the region and the world as well,’’ remarked Dr Al Jaber.

‘’The MoU reflects the longstanding friendship between the UAE and China as well as cooperation and ambition of the governments in several fields,’’ said the minister.

The agreement underscores the political will of the Emirati and Chinese leaderships to jointly promote the Belt and Road Initiative with the aim of elevating the spirt of the Silk Road for peace, openness and mutual education and cooperation in a manner that serves mutual interests, he added.

UAE ‘a key Middle East stop for Silk Road project’

The UAE, due to its world-class infrastructure and the top rankings in the world’s quality indices, will be the most important stop on China’s 21st Century Maritime Silk Road Initiative, said a report.

The Industrial and Commercial Bank of China, one of the largest financial establishments in the world with estimated assets of $2.3 trillion, has already set its eyes on expanding in the Middle East, and on contributing to the relations with the UAE, given the latter’s major role in international affairs and its fast-growing business sector, reported Wam.

This will allow for a significant increase in trade between the two countries and cooperation among their business and financial sectors, it said.

Last year, Abu Dhabi Ports signed a 50-year Mustaha (usufruct) agreement with the Jiangsu Provincial Overseas Cooperation and Investment Company, JOCIC, in the free trade zone of Khalifa Industrial Zone of Abu Dhabi (Kizad), it said.

JOCIC signed lease contracts worth Dh1.1 billion ($299.4 million) in total with five Chinese firms, namely; Hanergy Thin Film Power Group, Jiangsu Fantai Mining Development Group Co Ltd, Xuzhou Jianghe Wood Co, Jiangsu Jinzi Environmental Technology Co and Guangzheng Group.

The deal is expected to contribute in providing 1,400 job opportunities and in strengthening the region’s bonds with the Silk Road initiative, it added.

Since the visit made by HH Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to China and the consequent signing of the strategic agreement between the two countries, UAE’s trade with China witnessed a surge to $70 million annually.

The UAE also plays a vital role as a distribution point for 60 per cent of Chinese exports to the region, added the report.